OCA - Oceania Group - retirement villages

[Balance]

A repeat of Ryman at play?

Sp get shunted up before a CR announcement next week?

https://www.teachthought.com/storage/2014/11/learning-is-an-experience-fi.jpg

[bull....]

A repeat of Ryman at play?

Sp get shunted up before a CR announcement next week?

https://www.teachthought.com/storage/2014/11/learning-is-an-experience-fi.jpg

that wouldnt explain all RV stocks moving up at the same time

[Balance]

that wouldnt explain all RV stocks moving up at the same time

Have a look at the charts of all the RV stocks before the RYM CR announcement - they all moved up in unison with Ryman before they all were hit by the CR announcement.

Learning is an experience!

[Habits]

Have a look at the charts of all the RV stocks before the RYM CR announcement - they all moved up in unison with Ryman before they all were hit by the CR announcement.

Learning is an experience!

That wouldn't be easy to organise and why would you bother when OCA is a minor player

[bottomfeeder]

Have a look at the charts of all the RV stocks before the RYM CR announcement - they all moved up in unison with Ryman before they all were hit by the CR announcement.

Learning is an experience!
Glass half empty again.

[Balance]

Glass half empty again.

Balance, remember?

Or do you prefer to just have one side of the story all the time?

Like the ATM posters who have lost a bundle and are now quiet while they nursed their self-inflicted wounds?

But please ignore my postings as I am as fallible as the next person when I come to a view.

[SailorRob]

Balance, remember?

Or do you prefer to just have one side of the story all the time?

Like the ATM posters who have lost a bundle and are now quiet while they nursed their self-inflicted wounds?

But please ignore my postings as I am as fallible as the next person when I come to a view.

Why is a CR bad again?

[winner69]

Another million shares transacted day

Almost like the old days when it was said you can never have too many Oceania’ or something like that

[SailorRob]

Another million shares transacted day

Almost like the old days when it was said you can never have too many Oceania’ or something like that

Doesn't every buyer have a corresponding seller.

[winner69]

Doesn't every buyer have a corresponding seller.

Yes clever clogs that is true.

But it’s good to see the believers of old taking the opportunity to increase their holdings …….buying off the weak hands as they say.

[Maverick]

This could open up a bottomless rabbit hole but put simply ...

The ROI is acceptable without capital gains due to several reasons.
Firstly , OCA has 2 other income steams : new build margins of around 30% per delivery and care profit - which is where having lots of care suites is vital.
Secondly , as Sailor Rob has strongly and correctly highlighted, is the magic of the ORA. The 30% DMF is profit on the residents capital, not OCA`s.

The ORA means RVs make money on other peoples money so a 4% return on some one else's $800k suddenly looks good.

My own spreadsheet assumptions looking 8 years ahead are 0% capital gain for the next 2 years then 2% after that. The bottom line results are very acceptable.

Hope that helps Habits.
Just had another thought to add on that Habits...
An overlooked feature of OCA is that apartments have a tenure of 5.5 years so sort of in the middle of high churn caresuites(3) and a RV standard villa.(8.5)
Plus the maintenance is lower and sale value higher than the villa.

The downside of the apartment is they are just so bl**dy slow to maturity.

But not to worry about that for now...tonight we eat and drink.

[Baa_Baa]

Yes clever clogs that is true.

But it’s good to see the believers of old taking the opportunity to increase their holdings …….buying off the weak hands as they say.

Happy to have achieved my holdings goal, SP now up 18% from the low of only 5 days ago. ARV started re-rating a while ago, OCA bolted as as we've seen (up through the 50 and 100EMA's already), SUM perked up and even RYM put in a small rise. https://invst.ly/103uz2 ... a comparison chart from about the sector SP high's. Been a long time between drinks, hope you lot got your fill, this might be the sector turnaround happening.

[SailorRob]

Just had another thought to add on that Habits...
An overlooked feature of OCA is that apartments have a tenure of 5.5 years so sort of in the middle of high churn caresuites(3) and a RV standard villa.(8.5)
Plus the maintenance is lower and sale value higher than the villa.

The downside of the apartment is they are just so bl**dy slow to maturity.

But not to worry about that for now...tonight we eat and drink.

I don't celebrate significantly lower forward returns. If I'm confident that the business is worth far more then I prefer lower for longer.

This is a kick in the teeth as I was hoping to get a few years worth of dividends in at ridiculous prices.

50c better than 80c.

And the sooner we get to $2 the worse off I will be.

[nztx]

Which way will the next OCA Reported Revaluations go ? Any bets ? :)

[Baa_Baa]

I don't celebrate significantly lower forward returns. If I'm confident that the business is worth far more then I prefer lower for longer.

This is a kick in the teeth as I was hoping to get a few years worth of dividends in at ridiculous prices.

50c better than 80c.

And the sooner we get to $2 the worse off I will be.

Unless you're into the DRP, it shouldn't matter much what the SP is once you've got your holding set up, as you're not acquiring any more. Besides, if the SP jumped let's say hypothetically to $10, would you still hold for the dividend growth, or just sell for the capital gain?

[Baa_Baa]

Which way will the next OCA Reported Revaluations go ? Any bets ? :)

You're so annoying, asking dumb questions that have such obvious answers, like your questions are rhetorical to suit some dumb agenda you have. I doubt that you even have any OCA, you just like to poke your oar into things like you do on all the other threads, the 'seagull in the bay', ****ting on everything, adding no value, ever. Of course they'll go down like all REIT's have, like the whole property sector has. What difference does it make and why do you ask these inane questions, what's in it for you?

[SailorRob]

Unless you're into the DRP, it shouldn't matter much what the SP is once you've got your holding set up, as you're not acquiring any more. Besides, if the SP jumped let's say hypothetically to $10, would you still hold for the dividend growth, or just sell for the capital gain?

I'd sell.

Your holding set up will change depending on the opportunity.

At 20c with no change in business fundamentals you have 3 to 400% of your net worth invested, more if you can...

You should never have a hard rule of not acquiring more, depends on the opportunity.

Look me in the eye and tell me what better use of cash dividend from OCA you have than buying more at 66c.

You don't have anything better so best to buy more with dividend.

Think hard about this fact, every single OCA holder on sharetrader and anywhere else will be breathing a sigh of relief at this rally, and they're all wrong.

If you back your analysis then a rally in share price should do nothing for you emotionally except make you very sad unless the rally takes you to massive overvalue where you can sell.

I am less attracted to OCA at 77c than 66c and this isn't changed by the fact I already have a bunch.

[SailorRob]

You're so annoying, asking dumb questions that have such obvious answers, like your questions are rhetorical to suit some dumb agenda you have. I doubt that you even have any OCA, you just like to poke your oar into things like you do on all the other threads, the 'seagull in the bay', ****ting on everything, adding no value, ever. Of course they'll go down like all REIT's have, like the whole property sector has. What difference does it make and why do you ask these inane questions, what's in it for you?

And the gormless emoji tops it off.

[SailorRob]

Which way will the next OCA Reported Revaluations go ? Any bets ? :)

Which way has the cost of constructing OCA's incredible assets gone in the last 24 months and by how much?

And at what price did they lock in their construction projects, and when?

[justakiwi]

I 100% agree.


You're so annoying, asking dumb questions that have such obvious answers, like your questions are rhetorical to suit some dumb agenda you have. I doubt that you even have any OCA, you just like to poke your oar into things like you do on all the other threads, the 'seagull in the bay', ****ting on everything, adding no value, ever. Of course they'll go down like all REIT's have, like the whole property sector has. What difference does it make and why do you ask these inane questions, what's in it for you?

[Baa_Baa]

Which way has the cost of constructing OCA's incredible assets gone in the last 24 months and by how much?

And at what price did they lock in their construction projects, and when?

I'm sad that we both entertain this gormless idiot with responses to their idiotic posts, I thought I was beyond his inane vacuous nonsense, but for some reason I bit this time.

Tell me off if I do it again!

[SailorRob]

Notice how some others here have changed their tune a bit based on the rally in price?

They are taking their instruction from the market rather than having their own understanding and estimation of the business fundamentals and intrinsic value.

Price going down, must be bad, awful company etc.. Price turns and rallies, change of tune.

[Greekwatchdog]

For Bars Preview.
OUTPERFORM

Oceania Healthcare (OCA) reports its FY23 result on Wednesday, 24 May. OCA has taken a different path to its three listedpeers, with a high focus on building care suites, transforming profitability within care. OCA generates ~40% of underlyingEBITDA from care, of which the majority comes from care suites. We expect 15–20% growth in care suite annuity earnings,more than offsetting headwinds in traditional care. Despite major headwinds in FY23, including sharply higher financingcosts, we expect flat underlying earnings and ~+10% growth in underlying EBITDA. OCA had a record >500 units underconstruction at the 1H23 result in November, and we expect it to reach peak leverage around now. Its flagship 111 unitdevelopment, The Helier in Auckland, was scheduled for delivery late FY23/early FY24; weather may push this to FY24.

Care profitability: We forecast a slight increase in care EBITDA margins (from 11.7% in FY22 to 12.7% in FY23), a contrast to itspeers weakening care profitability, largely due to the success of its care suite offering.Net debt: As with its peers, the build up of debt is a focus point, however, we think OCA is near its peak net debt. We forecast netdebt increasing by just +NZ$40m in 2H23 and +NZ$10m in FY24, significantly down on the +NZ$122m added in 1H23.Opex: We see the possibility of aged care operators surprising with lower opex with the well flagged general inflationary pressuresbeing partially offset by the removal of COVID related costs (2H23 is the first half since 1H20 with no COVID related costs).Unit sales: Both ARV and SUM have updated the market with 1Q CY23 sales, and both came in slightly short of expectations. Webelieve in-line unit sales would act as a positive catalyst for OCA which has underperformed peers over recent months

[bull....]

For Bars Preview.
OUTPERFORM

Oceania Healthcare (OCA) reports its FY23 result on Wednesday, 24 May. OCA has taken a different path to its three listedpeers, with a high focus on building care suites, transforming profitability within care. OCA generates ~40% of underlyingEBITDA from care, of which the majority comes from care suites. We expect 15–20% growth in care suite annuity earnings,more than offsetting headwinds in traditional care. Despite major headwinds in FY23, including sharply higher financingcosts, we expect flat underlying earnings and ~+10% growth in underlying EBITDA. OCA had a record >500 units underconstruction at the 1H23 result in November, and we expect it to reach peak leverage around now. Its flagship 111 unitdevelopment, The Helier in Auckland, was scheduled for delivery late FY23/early FY24; weather may push this to FY24.

Care profitability: We forecast a slight increase in care EBITDA margins (from 11.7% in FY22 to 12.7% in FY23), a contrast to itspeers weakening care profitability, largely due to the success of its care suite offering.Net debt: As with its peers, the build up of debt is a focus point, however, we think OCA is near its peak net debt. We forecast netdebt increasing by just +NZ$40m in 2H23 and +NZ$10m in FY24, significantly down on the +NZ$122m added in 1H23.Opex: We see the possibility of aged care operators surprising with lower opex with the well flagged general inflationary pressuresbeing partially offset by the removal of COVID related costs (2H23 is the first half since 1H20 with no COVID related costs).Unit sales: Both ARV and SUM have updated the market with 1Q CY23 sales, and both came in slightly short of expectations. Webelieve in-line unit sales would act as a positive catalyst for OCA which has underperformed peers over recent months

lets see if FB clients charge in to buy today on there upgrade , i see they mention nothing about a capital raising

[bull....]

Notice how some others here have changed their tune a bit based on the rally in price?

They are taking their instruction from the market rather than having their own understanding and estimation of the business fundamentals and intrinsic value.

Price going down, must be bad, awful company etc.. Price turns and rallies, change of tune.

yep im playing the price and am long for the short term based on statistcal pattern this time of the yr as for long term my opinion on business ( rv in general ) has not changed. that is they will not make profits like they used to anymore after the latest batch of reports esp if rates stay high

[Greekwatchdog]

lets see if FB clients charge in to buy today on there upgrade , i see they mention nothing about a capital raising

Its not an upgrade Bull, they have always rated "Outperform"

[bull....]

Its not an upgrade Bull, they have always rated "Outperform"

ok thx for clarification

[winner69]

That FB report basically says don’t fret over F23 financials/performance because F24 is going to be a great year

As they say ‘It’s our year, go the mighty Oceania’

[SailorRob]

yep im playing the price and am long for the short term based on statistcal pattern this time of the yr as for long term my opinion on business ( rv in general ) has not changed. that is they will not make profits like they used to anymore after the latest batch of reports esp if rates stay high


How much of their debt, as a percentage, is effected by higher rates?

[bull....]

How much of their debt, as a percentage, is effected by higher rates?

we dont need to play your silly games you know what it is

[ValueNZ]

we dont need to play your silly games you know what it is
It's a perfectly fair question since a majority of their debt is locked in at low interest rates. If anything higher interest rates could play to their advantage if other RV firms have to take on debt at higher interest rates.

[SailorRob]

they will not make profits like they used to anymore after the latest batch of reports esp if rates stay high

I thought I had a fair idea hence my question regarding this comment.

Can you please provide your rough working for this statement?

[Curly]

Would have thought for further upward movement today given the lift in prices for RYM, SUM and ARV. Maybe something might happen at end of trading

[winner69]

Ryman report went down well and helped RV share prices

OCA next ..hope Brent doing his magic and putting a great rave to excite us all.

Ryman started talking about being Free Cash Flow +ve in 2025….mainly because the market per se worried about all the cash burn and increasing debt that’s been going on.

Wonder if Oceania wil talk about this …..been burning cash year after year since they listed …maybe FCF +ve a step too far them.

Wednesday could be a big day …looking forward to it


Share price might be over 80 before the announcement

[Curly]

All RV stocks down apart from OCA, up .02c in anticipation of Wednesdays announcement. Should be .80+ now.

[SailorRob]

Ryman report went down well and helped RV share prices

OCA next ..hope Brent doing his magic and putting a great rave to excite us all.

Ryman started talking about being Free Cash Flow +ve in 2025….mainly because the market per se worried about all the cash burn and increasing debt that’s been going on.

Wonder if Oceania wil talk about this …..been burning cash year after year since they listed …maybe FCF +ve a step too far them.

Wednesday could be a big day …looking forward to it


Share price might be over 80 before the announcement

What benefit to shareholders would it be for him to put on a great rave to pump the stock?

[X-men]

No CR from insider broker..so let's see how reliable the broker info

[Rawz]

What benefit to shareholders would it be for him to put on a great rave to pump the stock?

Stop asking that question

[SailorRob]

No CR from insider broker..so let's see how reliable the broker info

How is the broker an insider X-men?

Do they work as investment bankers for OCA?

Why would they break the Financial Markets Authority Act to supply you with information?

[X-men]

Insider..... secret...lol

Like CIA service....when director bought shares....or sold shares...

[Entrep]

Insider..... secret...lol

Like CIA service....when director bought shares....or sold shares...

Insider broker is Professor Charles Xavier. He entered Brent's mind and discovered no CR.... right X-men?

[X-men]

Spot on....take care people. My 4000shares at .67c is on the high expectations this coming week

[dreamcatcher]

Will boost the NZ economy..............

ASB - There was a net migration gain of 65,400 people in the March year, compared with a net outflow of 19,300 in the previous year. New migrants totalled a

record 88,900 and 23,500 New Zealanders left home. Westpac expects net migration will rise to an annual inflow of 100,000 people by the end of this year.

[ValueNZ]

Does anyone know what time the annual report will be released on Wednesday?

[X-men]

Normally 8.30am on my direct broking ac

Balance and sailormoon will have a priority to see the result after the market closed today. Both
of them are big holders

[bull....]

big day tomorrow .... will balance be right and a capital raising be revealed ?

[Rawz]

big day tomorrow .... will balance be right and a capital raising be revealed ?

Will be interesting.

Balance.. last chance to back out of your call if you like.. No one will judge you

[Filthy]

Will be interesting

my pick is reasonable result; no cap raise, but also no divi

[ValueNZ]

my pick is reasonable result; no cap raise, but also no divi
I'd be happy if Oceania cancelled the dividend, surely it is better to instead buyback shares?

[X-men]

What buy back..OCA could barely pay a dividend...let alone buyback

[thegreatestben]

my pick is reasonable result; no cap raise, but also no divi

I'm in the same boat

[ValueNZ]

What buy back..OCA could barely pay a dividend...let alone buyback
I'll reframe what I said then. If Oceania decides that they are to return cash to shareholders, I'd prefer that to be in the form of buying back shares rather than paying a dividend.

[winner69]

I'll reframe what I said then. If Oceania decides that they are to return cash to shareholders, I'd prefer that to be in the form of buying back shares rather than paying a dividend.

What spare cash ..... cash burn likey to continue

Keep borrowing eh .... to build things as well as pay divies or as some want to do a buy back

Or do a cap raise to pay divies ... whoops already done that trick

[ronaldson]

Only one more sleep and all will be revealed.

This is the most active thread on sharetrader so the excitement will be palpable, with reputations to be made or lost!

[X-men]

I won't be sleeping today..will camp out with open fire.... waiting for result out!!

[bull....]

if balance was right and insto's were selling like he thought and they dont announce a cap raise it should zoom higher shouldnt it ? they be back buying in droves as they all got it wrong lol

[justakiwi]

It's not a competition.

We are all doing our best, making investment decisions for ourselves. We get it right. We get it wrong. All of us, at some point. Anyone who claims otherwise is kidding themselves.




This is the most active thread on sharetrader so the excitement will be palpable, with reputations to be made or lost!

[Louloubell]

Finishing at 80cents today, I say!

[bull....]

Finishing at 80cents today, I say!

no depth to 85 at the moment after 80c so that be the initial move if its good. if it stays that way

[X-men]

My tent is up..the fire is on...see u all at 8.30am

Sailormoon and balance might know the result now...both of them are VIP... biggest holders

[limmy]

A lot of wishful thinking going on :)

[SailorRob]

Maybe people need to get a life. I'm interested in where this company will be in 10 years, not tomorrow.

Very astute comments from ValueNZ, correct in your thinking.

Nobody has explained why a CR would be bad for shareholders.

[X-men]

Cr is not bad but the main goal in share market is to make money not to make husband and wife relationship with a company.

I know my colleague, bought in $1.20....now she is under water almost $ 0.40

If u could sell all then bought in cheap during CR...why not???

Don't be so naive sailormoon, what is the point losing money when u can now put your hard earned money on term deposit at 5.7% per annum

[SailorRob]

Cr is not bad but the main goal in share market is to make money not to make husband and wife relationship with a company.

I know my colleague, bought in $1.20....now she is under water almost $ 0.40

If u could sell all then bought in cheap during CR...why not???

Don't be so naive sailormoon, what is the point losing money when u can now put your hard earned money on term deposit at 5.7% per annum

You wouldn't be losing money at 5.7%?when did rates become positive, I missed that.

How do you sell all and then buy cheap in CR, run me though that.

[X-men]

At least u are not under water...


U sold early or cut loss.....when everyone was hammering the retirement stock ...now seem like the market has button as well as the property market. People will still to re rate the property n retirement stocks

[Rawz]

Maybe people need to get a life. I'm interested in where this company will be in 10 years, not tomorrow.

Very astute comments from ValueNZ, correct in your thinking.

Nobody has explained why a CR would be bad for shareholders.
In general shareholders don’t want to be invested in companies that keep asking them for new capital.

It’s preferred that the company you’re invested in grows earnings and distributes most of it to shareholders while retaining enough to continue to grow earnings.

[SailorRob]

In general shareholders don’t want to be invested in companies that keep asking them for new capital.

It’s preferred that the company you’re invested in grows earnings and distributes most of it to shareholders while retaining enough to continue to grow earnings.

Well they would perhaps be morons then.

If a company can return 15 or 20% on equity capital and have the opportunity to deploy at those rates then they better bloody be asking the sailor for more and more.

Not just using retained earnings.

And if they pay a dividend then we have some real problems.

All depends on the opportunity they have.

[Rawz]

Well they would perhaps be morons then.

If a company can return 15 or 20% on equity capital and have the opportunity to deploy at those rates then they better bloody be asking the sailor for more and more.

Not just using retained earnings.

And if they pay a dividend then we have some real problems.

All depends on the opportunity they have.
Yeah that’s why I said in general.

I’m not sure OCA can do that or have the opportunity.

One could argue MFT shouldn’t pay a dividend. They can do it and have the opportunity.

Anyways I’m a holder in OCA and looking forward to tomorrow

[Louloubell]

Hi SailorRob,
You sound a bit like my wife when you say that I need to get a life.
I just tend to ignore her when she is rude.

[winner69]

Please don’t bring Sailor Moon and Luna into this discussion on Oceania

[X-men]

I love watching Luna changed to sailormoon..off course with her clothes on

[SailorRob]

Hi SailorRob,
You sound a bit like my wife when you say that I need to get a life.
I just tend to ignore her when she is rude.

Listen to the both of us. There's reason behind our words.

[X-men]

Morena tamariki!!! Big day at the kura today...

[bull....]

usuku olukhulu namuhla

[SailorRob]

I'm looking for a great result and a falling share price.

Same thing Warren would want.

Every single other shareholder wants a higher share price.

But isn't it obvious that you want to buy more profit for less money?

Not to 99% of people.

[winner69]

Awesome presentation and rave from Oceania re full year update and future outlook.

Can’t wait for the live show at 11am. It’s going to be so good. I reckon Brent’s rave will be as exciting as a Springsteen concert and he’ll have his backup raver Kathryn supporting him.

Rock on Brent, you are the man …………and doing a great job as well.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/411935/395028.pdf

[X-men]

No CR....my insider tip is indeed reliable....

[justakiwi]

I understand. But you do have to remember that we are all in different places with our investing. Some of us are doing it to (hopefully) get rich. Some of us are just trying to create a little additional financial security for our individual situation. So, for some people, share price may well be important, especially if they wish, or need, to sell a few at some point in the near future - for whatever reason.

If I had money to buy more, I would be singing your song. Sadly, I don't, and am now highly unlikely to ever have the ability to add to my current investments. So, to be honest, share price is now starting to become more important for my personal and individual situation. There is no "one size fits all" in investing.


I'm looking for a great result and a falling share price.

Same thing Warren would want.

Every single other shareholder wants a higher share price.

But isn't it obvious that you want to buy more profit for less money?

Not to 99% of people.

[percy]

Well done OCA holders.
A very solid result.

[Greekwatchdog]

Well done OCA holders.
A very solid result.

Couldn't agree more. Look forward to 12 months time then we will see real delivery. And look no Capital Raise despite many traders on here who managed to convince themselves that OCA needed one. I wonder if we get an apology from these who were pushing this. Probably a Tui's moment.

[X-men]

Should bought 100k shares when it hit 67c....well....don't be greedy...my nana told me once ...only invest the money that u could afford to lose in the share market....

[bull....]

Couldn't agree more. Look forward to 12 months time then we will see real delivery. And look no Capital Raise despite many traders on here who managed to convince themselves that OCA needed one. I wonder if we get an apology from these who were pushing this. Probably a Tui's moment.

i said they would need to raise capital a while back but stated i didnt agree with balance about cap raising and i have been proven correct they have sold 2 sites to raise capital

anyway doesnt look to bad from a quick look have a better look later , presentation looks much better than previous ones like how they display all in cash margins from developments. reducing div slightly good management in this environment one up on rym who are not paying anything

[SailorRob]

I understand. But you do have to remember that we are all in different places with our investing. Some of us are doing it to (hopefully) get rich. Some of us are just trying to create a little additional financial security for our individual situation. So, for some people, share price may well be important, especially if they wish, or need, to sell a few at some point in the near future - for whatever reason.

If I had money to buy more, I would be singing your song. Sadly, I don't, and am now highly unlikely to ever have the ability to add to my current investments. So, to be honest, share price is now starting to become more important for my personal and individual situation. There is no "one size fits all" in investing.

Never put yourself in a position where you need to sell equity Securities in the near future.

Absolute minimum time frame is 5 years. Preferably 10 plus. Otherwise shouldn't have any at all really.

[Sideshow Bob]

Onwards & upwards.....

[Rawz]

Can’t believe there is no cap raise. It was so obvious the big insto’s selling to the dumb retail investors back in the low 70s and high 60s.

[SailorRob]

i said they would need to raise capital a while back but stated i didnt agree with balance about cap raising and i have been proven correct they have sold 2 sites to raise capital

anyway doesnt look to bad from a quick look have a better look later , presentation looks much better than previous ones like how they display all in cash margins from developments. reducing div slightly good management in this environment one up on rym who are not paying anything


Yes bull. You're never wrong.

Good on ya mate.

[SailorRob]

Should bought 100k shares when it hit 67c....well....don't be greedy...my nana told me once ...only invest the money that u could afford to lose in the share market....

Yes but you actually need money to buy shares.

Nana was talking about speculation, only she didn't know it.

[justakiwi]

Yes, I agree, and that is my intention. I was just offering you a valid reason why share price may matter to some people, more than it does to you. I think a lot of experienced investors, with sizeable portfolios, sometimes forget that there are also investors at the other end of the spectrum.

Anyway, back to OCA, and what appears to be pretty positive and encouraging result ;)



Never put yourself in a position where you need to sell equity Securities in the near future.

Absolute minimum time frame is 5 years. Preferably 10 plus. Otherwise shouldn't have any at all really.

[bull....]

Yes bull. You're never wrong.

Good on ya mate.

i be hoping for a big surge in the stock price :t_up: way better than waiting 10yrs for a payday lol

[Lego_Man]

One must now conclude that unless we get a dramatic deterioration from here, OCA have weathered this down cycle with existing shareholder funds. A great outcome.

We might get some further chop if Mr Orr keeps smacking us around, but fundamentally medium term value is still there.

[percy]

Couldn't agree more. Look forward to 12 months time then we will see real delivery. And look no Capital Raise despite many traders on here who managed to convince themselves that OCA needed one. I wonder if we get an apology from these who were pushing this. Probably a Tui's moment.

Think they will be loading up themselves.
Currently trading at a 44% discount to NTA.

[SailorRob]

Where are you


B
A
L
A
N
C
E

Front up sunshine.

[Greekwatchdog]

Think they will be loading up themselves.
Currently trading at a 44% discount to NTA.

Any smart trader that had no bias about CR would have been in at these levels. I certainly have been helping myself even if it pushed up my average a little to $0.631. Happy to take and hold.

[Sideshow Bob]

Look forward to Mav's thoughts in due course.

[SailorRob]

Very nice increase in free money too, looks like a 13% increase.

[SailorRob]

Balance, cat got you tongue old boy?

[winner69]

Underlying Profit 58.6m …eps basically unchanged

FWIW i thought it would be mid 60’s but I’m always optimistic …..Think Mavericks last est was $61.2 (which I think was lower than a previous estimate)

Maverick probably a little disappointed

But as we know next year is gunna to be year …..bit like that sporting team ‘it’s our year’ saying

[X-men]

Balance is too busy making big buck on serko

[SailorRob]

Great to see change in dividend policy, but should have gone further.

Trying to keep everyone happy instead of acting in the best interests of shareholders but happy enough.

No share buy back plans which is a massive disappointment.

[justakiwi]

Sure you are buddy. More like permanently pessimistic and sickeningly sarcastic.


Underlying Profit 58.6m …eps basically unchanged

FWIW i thought it would be mid 60’s but I’m always optimistic …..Think Mavericks last est was $61.2 (which I think was lower than a previous estimate)

Maverick probably a little disappointed

But as we know next year is gunna to be year …..bit like that sporting team ‘it’s our year’ saying

[SailorRob]

Underlying Profit 58.6m …eps basically unchanged

FWIW i thought it would be mid 60’s but I’m always optimistic …..Think Mavericks last est was $61.2 (which I think was lower than a previous estimate)

Maverick probably a little disappointed

But as we know next year is gunna to be year …..bit like that sporting team ‘it’s our year’ saying


As can plainly be seen, it's about the next decade.

If you struggle to understand the model, there are another 50,000 or so public companies in the world you could invest in.

[Curly]

So what’s going to happen tp share price on opening, up or down? IFT had great result and share price dropped .30c. Has market already anticipated this result?

[SailorRob]

Sally Evans 40,000 $1.05 24 May 2022

Elizabeth Coutts Acquisition 50,000 $1.01 27 May 2022
Elizabeth Coutts Acquisition 25,000 $1.04 2 June 2022
Elizabeth Coutts Acquisition 40,053 $0.99 21 June 2022

Alan Isaac 4,709 Acquisition $0.99 21 June 2022

Dame Kerry Prendergast 5,464 Acquisition $0.99 21 June 2022

Sally Evans 2,732 Acquisition $0.99 21 June 2022

Gregory Tomlinson 619,977 Acquisition $0.99 21 June 2022

Peter Dufaur 1,167 Acquisition $0.99 21 June 2022

Elizabeth Coutts 42,762 Acquisition $0.80 14 December 2022

Alan Isaac 4,851 Acquisition $0.80 14 December 2022

Dame Kerry Prendergast 5,630 Acquisition $0.80 14 December 2022

Sally Evans 2,827 Acquisition $0.80 14 December 2022

Gregory Tomlinson 643,618 Acquisition $0.80 14 December 2022

Peter Dufaur 1,202 Acquisition $0.80 14 December 2022

The hell would they know...

Wheres the sales?/

[Sideshow Bob]

So what’s going to happen tp share price on opening, up or down? IFT had great result and share price dropped .30c. Has market already anticipated this result?

79c currently. Only about 65k traded.

[Curly]

79c currently. Only about 65k traded.
That’s their IPO issue price. New beginnings today maybe. Onward and upward.

[ValueNZ]

That’s their IPO issue price. New beginnings today maybe. Onward and upward.
Doesn't that highlight the opportunity that is the current market price? I suggest looking at their earlier annual reports and see the progress that they have made as a business.

[Curly]

79c currently. Only about 65k traded.


Sally Evans 40,000 $1.05 24 May 2022

Elizabeth Coutts Acquisition 50,000 $1.01 27 May 2022
Elizabeth Coutts Acquisition 25,000 $1.04 2 June 2022
Elizabeth Coutts Acquisition 40,053 $0.99 21 June 2022

Alan Isaac 4,709 Acquisition $0.99 21 June 2022

Dame Kerry Prendergast 5,464 Acquisition $0.99 21 June 2022

Sally Evans 2,732 Acquisition $0.99 21 June 2022

Gregory Tomlinson 619,977 Acquisition $0.99 21 June 2022

Peter Dufaur 1,167 Acquisition $0.99 21 June 2022

Elizabeth Coutts 42,762 Acquisition $0.80 14 December 2022

Alan Isaac 4,851 Acquisition $0.80 14 December 2022

Dame Kerry Prendergast 5,630 Acquisition $0.80 14 December 2022

Sally Evans 2,827 Acquisition $0.80 14 December 2022

Gregory Tomlinson 643,618 Acquisition $0.80 14 December 2022

Peter Dufaur 1,202 Acquisition $0.80 14 December 2022

The hell would they know...

Wheres the sales?/
That’s compelling, and it omits the truck load Tomlinson bought at $1.40.

[SailorRob]

That’s compelling, and it omits the truck load Tomlinson bought at $1.40.


As well as the full participation in the raise at $1.30 and as you say the previous years purchases.


But what is most important is still to come.

Balances analysis and public apology.

Bull, as he has told us was correct all along as 12 screens do not lie.

[Bjauck]

Should bought 100k shares when it hit 67c....well....don't be greedy...my nana told me once ...only invest the money that u could afford to lose in the share market....
Hindsight. It is difficult to be the Pilchard that breaks out from the shoal. We see the ones that don’t end up in the belly of a barracuda…

[Muse]

be interesting to see what the two sites were sold for and how that compared to their book value?

[alokdhir]

be interesting to see what the two sites were sold for and how that compared to their book value?

Must have made more sense to do that even at some loss then do CR in current market conditions ...very sensible of management to preserve loyal shareholders wealth ...unlike RYM ...but then they got trapped by their own greed or over exuberance for the benefit of shareholders ...didnt work out well in the end ...bad luck for holders ...nothing succeeds like success and vice versa ...lol

[Lego_Man]

be interesting to see what the two sites were sold for and how that compared to their book value?

If the book value was based on 31 March 2022 figures i would expect a 30% haircut. Development land is off far more than residential housing.

[thegreatestben]

Massive parcel just went through at .80c

[bull....]

institution buying in

[bottomfeeder]

1.9 mill shares bought at 80 cents. Something is afoot. Perhaps a takeover is coming.

It not being bought for the dividend.

[Lego_Man]

institution buying in

Who sold?

...

[ronaldson]

I thought to expand on my post 14077 above which drew attention to the fact that 10 of OCA's sites are now classified as " held for sale".

The first mention of this was in the CEO's commentary on 23 June at the AGM. He said " As the business matures we also have an eye to those sites that may no longer fit the portfolio or meet return thresholds and divestment of a few sites will likely be part of this year's activity."

After a couple of subsequent acquisitions OCA now has 47 sites, 26 of which are described as existing sites with mature operations,21 as existing sites with current or planned development, and 1 undeveloped. I suspect it is only the rules around accounting treatment that have forced the disclosure in the half-year financials that no less than 10 of these sites have been assessed by the Board as appropriate for disposal (no doubt dependent upon price that can be achieved).

The Chair makes clear that " The strategy is to enable less reliance upon Government funding for ongoing operations, with (remaining) sites free to operate outside the restrictions of the current Government funding model." And there is reference to " recycling cash within the business."

This may beg the question how you successfully dispose of operational sites that are not making an adequate return, to whom you might do that, and what sale price might be achieved in such circumstance. But it is still more than 20% of the portfolio and should have Andrew Little on edge as once the listed and unlisted RV operators effectively abandon ship with regard to basic state funded aged care as policy he is in really big trouble. I would say this is yet another dead canary signaling how it is and is going to be in future.

I wonder what will occur so far as the intended divestments are concerned between now and FY23. That may tell a tale what, if anything, can be achieved and as to the extent of any "haircut" to values.


I had to go back to page 1409 for this one, posted after the OCA half year result. And now we know only two sites have been on-sold since November 2022 (and who knows when the decision to market was taken before that), albeit not yet settled. No news which (I guess don't scare the residents!) or what haircut may have been involved. That may not be clear until the next half year result. Can't be much demand for operating facilities being on-sold by an NZX listed entity because not many operators would be better placed to make a go of it. If a decent price has not been obtained the value of the remaining eight properties held on that basis may need to be marked down.

[bull....]

Who sold?

...

traders who supported price just under 70c lol

[SailorRob]

1.9 million shares sold at 80c

[ba9]

1.9 million shares sold at 80c

Looks like they were bought. Not sold :)

[SailorRob]

[QUOTE=Bjauck;1004613]Hindsight. It is difficult to be the Pilchard that breaks out from the shoal. We see the ones that don’t end up in the belly of a barracuda…[/QUOTE

Did it really take hindsight to see the opportunity at 67, or indeed now?

[bottomfeeder]

traders who supported price just under 70c lol

Might have to wait for value to go over a dollar. Unless they bring back the dividend to at least 60% or more, of profits.

It's a longer term hold for now. At least there will be less worry about the SP bottoming out. There are a lot of worse places to park your money during this economic turmoil. Inflation, in any property holding company, is your friend.

The properties up for sale, just can't be built for anywhere near what they used to be. I would guess they are going to go for decent prices, not fire sale prices. Just because they are up for sale doesn't mean they are dead ducks.

[BlackPeter]

Might have to wait for value to go over a dollar. Unless they bring back the dividend to at least 60% or more, of profits.

It's a longer term hold for now. At least there will be less worry about the SP bottoming out. There are a lot of worse places to park your money during this economic turmoil. Inflation, in any property holding company, is your friend.

The properties up for sale, just can't be built for anywhere near what they used to be. I would guess they are going to go for decent prices, not fire sale prices. Just because they are up for sale doesn't mean they are dead ducks.

Well said, and actually in line with what we learned in todays presentation from the CFO. While she couldn't talk about the agreed price (hey, its commercially sensitive and still pending), she indicated that she didn't saw any discounting coming through for investment properties like these.

[Baa_Baa]

The properties up for sale, just can't be built for anywhere near what they used to be. I would guess they are going to go for decent prices, not fire sale prices. Just because they are up for sale doesn't mean they are dead ducks.

They didn't disclose the sale prices of the two sold, but in the analysts questions time, when pressed they did say they "were close to the CBRE numbers". Which I took to mean slightly above or below, not significantly more or discounted.

[bull....]

Might have to wait for value to go over a dollar. Unless they bring back the dividend to at least 60% or more, of profits.

It's a longer term hold for now. At least there will be less worry about the SP bottoming out. There are a lot of worse places to park your money during this economic turmoil. Inflation, in any property holding company, is your friend.

The properties up for sale, just can't be built for anywhere near what they used to be. I would guess they are going to go for decent prices, not fire sale prices. Just because they are up for sale doesn't mean they are dead ducks.

cant see it going to $1 in a hurry.

[Curly]

Come home Balance, all is forgiven.

[ThaiJohn]

Come home Balance, all is forgiven.
:laugh::laugh:

[BlackPeter]

A repeat of Ryman at play?

Sp get shunted up before a CR announcement next week?

https://www.teachthought.com/storage/2014/11/learning-is-an-experience-fi.jpg

Really important not to forget this message. Just wondering whether balance is able to apply Einstein's saying :) ?

[winner69]

In todays environment not a good headline in the NBR

Oceania Healthcare’s net debt up as sales slow
The company has put emphasis on cash flow reporting but it’s not transparent enough for one analyst.

https://www.nbr.co.nz/investment/oceania-healthcares-net-debt-up-as-sales-slow/
Prob paywalled but gist is about continuing cash burn and the company not being that transparent how it’s going to get better

[nztx]

In todays environment not a good headline in the NBR

Oceania Healthcare’s net debt up as sales slow
The company has put emphasis on cash flow reporting but it’s not transparent enough for one analyst.

https://www.nbr.co.nz/investment/oceania-healthcares-net-debt-up-as-sales-slow/
Prob paywalled but gist is about continuing cash burn and the company not being that transparent how it’s going to get better


So the decline towards close wasn't Balance selling down ? :)

[Balance]

Happy to sit back and watch the action unfold today.

No CR so there are a lot of relieved holders and posters here. Happy for you!

But what do the results show?

Massive cash flow deficits (both operational as well as development) plugged by massive borrowings - $173.87m.
Dividends paid from increased borrowings.
Capital commitment going forward of $125m which no doubt will be funded by further increased borrowings.

OCA obviously recognizes the delicate position it is in so has put $101m of assets for sale (book value).

So is OCA out of the woods for a CR?

[X-men]

Talking porky again balance.

Oca ...gearing at 37%....Rym is currently at 33%

Once the sales goes through, the gearing will be around 30-31% which is really good n I don't see any CR required at all.

My insider is more reliable than your porky theory

[Balance]

Talking porky again balance.

Oca ...gearing at 37%....Rym is currently at 33%

Once the sales goes through, the gearing will be around 30-31% which is really good n I don't see any CR required at all.

My insider is more reliable than your porky theory

Yawn.

As the SAS motto goes : "Who dares, wins."

[SailorRob]

Happy to sit back and watch the action unfold today.

No CR so there are a lot of relieved holders and posters here. Happy for you!

But what do the results show?

Massive cash flow deficits (both operational as well as development) plugged by massive borrowings - $173.87m.
Dividends paid from increased borrowings.
Capital commitment going forward of $125m which no doubt will be funded by further increased borrowings.

OCA obviously recognizes the delicate position it is in so has put $101m of assets for sale (book value).

So is OCA out of the woods for a CR?

Get out of town fool.

You're shot here, you're through mate.

You're finished.

[Greekwatchdog]

Happy to sit back and watch the action unfold today.

No CR so there are a lot of relieved holders and posters here. Happy for you!

But what do the results show?

Massive cash flow deficits (both operational as well as development) plugged by massive borrowings - $173.87m.
Dividends paid from increased borrowings.
Capital commitment going forward of $125m which no doubt will be funded by further increased borrowings.

OCA obviously recognizes the delicate position it is in so has put $101m of assets for sale (book value).

So is OCA out of the woods for a CR?

What crap. There is nothing wrong with selling Assets that don't fit where the portfolio is going. Just like there is nothing wrong with buying Assets to compliment the Portfolio.

I will be more interested what they decide to do with money. Pay down some debt or Purchase more Land to add to their Land Bank or buy another village or two.

You were wrong Balance on the CR, dead set wrong and you lack the courage and humility to acknowledge this as your back handed attempt with your post was pathetic at best.

No relieved long term holder here. Just enjoying the egg all over yourself.

Go play your childish games with that other Dog on the other site.

I look forward to this time next year.

[Balance]

What crap. There is nothing wrong with selling Assets that don't fit where the portfolio is going. Just like there is nothing wrong with buying Assets to compliment the Portfolio.

I will be more interested what they decide to do with money. Pay down some debt or Purchase more Land to add to their Land Bank or buy another village or two.

You were wrong Balance on the CR, dead set wrong and you lack the courage and humility to acknowledge this as your back handed attempt with your post was pathetic at best.

No relieved long term holder here. Just enjoying the egg all over yourself.

Go play your childish games with that other Dog on the other site.

I look forward to this time next year.

Yawn.

Yawn.

Yawn.

[Greekwatchdog]

Yawn.

Yawn.

Yawn.

About what we would expect from someone so Ignorant and Arrogant.

[Greekwatchdog]

For Bars review..

Oceania Healthcare (OCA) reported an underwhelming FY23 result, with a few redeeming features. Premium annuity revenues in the form of DMF and resale gains were substantially below our estimates. Underlying earnings was in-line, aided by record high new sales margins as well as lower opex, D&A and financing costs. The weak DMF was likely a consequence of tenure expanding beyond OCA's expected average tenure, leaving an unusually large proportion of occupied units not yielding any DMF. OCA has delivered opaque earnings over the last few years as it has invested heavily in its transition from a traditional care operator to building premium care and retirement villages. We expect that it will re-rate to above book value (currently at ~0.6x) once this transition starts to bear fruit, but the FY23 result is unlikely to act as a catalyst to take it all the way there. We reduce our target price to NZ$1.10, ~0.8x of reported book value per share but retain our OUTPERFORM rating. We see strong valuation support and expect high growth over the next three years.

What's changed?


Earnings: FY24/FY25/FY26 annuity EBITDA down -11%/-14%/-12% driven by lower care fees, lower DMF and lower resales gains slightly offset by lower costs. Underlying EPS down less materially, -5%/-4%/-7% driven by higher new sales gains and lower D&A.
Target price: Decreased to NZ$1.10 from NZ$1.30, driven by lower earnings and dividends estimates.


The good...
There were some bright spots in OCA's FY23 result. OCA delivered new sales margins of ~37% (>40% in 2H23) and apartment prices grew +26% year over year. A phenomenal result, supporting OCA's claimed cash recovery of capex of well over 100%. Costs were another bright spot. OCA reported opex growth of only +7%, despite a sizeable acquisition and organic scope growth; other costs (primarily head office) were down from FY22 which was the core driver.

...the bad...
Both resales and new sales were substantially down versus FY22, with resales particularly disappointing given the strong 1H23. 2H23 resales were down -30% on 1H23. Newsales were down -30% versus FY22, below our forecast but similar to RYM's NZ new sales, also down -30%. OCA now has >NZ$400m of unsold stock. The glass half full view is this is enough to pay off most of its debt.

...and the ugly
Our main disappointment with the result relates to the hard to explain weak care and village DMF. Over the last six years OCA has grown care DMF by a CAGR of +35%, with no year worse than +20%; in FY23 it grew by less than +6%. Village DMF grew a respectable +18%, but it benefitted from a meaningful acquisition. We estimate that sequential organic growth in 2H23 was ~0%.

[SailorRob]

You were wrong Balance on the CR, dead set wrong and you lack the courage and humility to acknowledge this as your back handed attempt with your post was pathetic at best.

No relieved long term holder here. Just enjoying the egg all over yourself.

Very well said.

Lack the courage and humility.

[SailorRob]

For Bars review..

Oceania Healthcare (OCA) reported an underwhelming FY23 result, with a few redeeming features. Premium annuity revenues in the form of DMF and resale gains were substantially below our estimates. Underlying earnings was in-line, aided by record high new sales margins as well as lower opex, D&A and financing costs. The weak DMF was likely a consequence of tenure expanding beyond OCA's expected average tenure, leaving an unusually large proportion of occupied units not yielding any DMF. OCA has delivered opaque earnings over the last few years as it has invested heavily in its transition from a traditional care operator to building premium care and retirement villages. We expect that it will re-rate to above book value (currently at ~0.6x) once this transition starts to bear fruit, but the FY23 result is unlikely to act as a catalyst to take it all the way there. We reduce our target price to NZ$1.10, ~0.8x of reported book value per share but retain our OUTPERFORM rating. We see strong valuation support and expect high growth over the next three years.

What's changed?


Earnings: FY24/FY25/FY26 annuity EBITDA down -11%/-14%/-12% driven by lower care fees, lower DMF and lower resales gains slightly offset by lower costs. Underlying EPS down less materially, -5%/-4%/-7% driven by higher new sales gains and lower D&A.
Target price: Decreased to NZ$1.10 from NZ$1.30, driven by lower earnings and dividends estimates.


The good...
There were some bright spots in OCA's FY23 result. OCA delivered new sales margins of ~37% (>40% in 2H23) and apartment prices grew +26% year over year. A phenomenal result, supporting OCA's claimed cash recovery of capex of well over 100%. Costs were another bright spot. OCA reported opex growth of only +7%, despite a sizeable acquisition and organic scope growth; other costs (primarily head office) were down from FY22 which was the core driver.

...the bad...
Both resales and new sales were substantially down versus FY22, with resales particularly disappointing given the strong 1H23. 2H23 resales were down -30% on 1H23. Newsales were down -30% versus FY22, below our forecast but similar to RYM's NZ new sales, also down -30%. OCA now has >NZ$400m of unsold stock. The glass half full view is this is enough to pay off most of its debt.

...and the ugly
Our main disappointment with the result relates to the hard to explain weak care and village DMF. Over the last six years OCA has grown care DMF by a CAGR of +35%, with no year worse than +20%; in FY23 it grew by less than +6%. Village DMF grew a respectable +18%, but it benefitted from a meaningful acquisition. We estimate that sequential organic growth in 2H23 was ~0%.


35% CAGR over 6 years.

Stunning.

[SailorRob]

Happy to sit back and watch the action unfold today.

No CR so there are a lot of relieved holders and posters here. Happy for you!

But what do the results show?

Massive cash flow deficits (both operational as well as development) plugged by massive borrowings - $173.87m.
Dividends paid from increased borrowings.
Capital commitment going forward of $125m which no doubt will be funded by further increased borrowings.

OCA obviously recognizes the delicate position it is in so has put $101m of assets for sale (book value).

So is OCA out of the woods for a CR?

Zero understanding of how any business model works in build out phase. This post is almost as embarrassing as Balance in general.

Of course there will be cash flow defecits, do we really want them purely using retained earnings?

[bull....]

35% CAGR over 6 years.

Stunning.

lol your like the media ... highlighting only one part of the story.

care to explain why dmf grew only 6% this current yr

did something go wrong with all there free money you talk about ?

[ValueNZ]

Is anyone able to explain to me why the deferred management fee is listed under liabilities on the balance sheet? I thought it would be listed as an asset since I believe it is accrued income. I think I'm missing something here...

Edit: Nevermind I think it's income in advance, sorry!

[SailorRob]

Is anyone able to explain to me why the deferred management fee is listed under liabilities on the balance sheet? I thought it would be listed as an asset since I believe it is accrued income. I think I'm missing something here...

Edit: Nevermind I think it's income in advance, sorry!

Yep, this is the whole point. It's a liability but really it's the highest class of pristine asset you can have.

[SailorRob]

lol your like the media ... highlighting only one part of the story.

care to explain why dmf grew only 6% this current yr

did something go wrong with all there free money you talk about ?

I'll let the long term speak for itself.

[Curly]

To the doubters out there, can you tell me what is wrong with an investment that costs .78c a unit that will be $1.10 per unit in twelve months time and multiples thereafter. Plus they pay you a divie along the way.

[SailorRob]

Yep, this is the whole point. It's a liability but really it's the highest class of pristine asset you can have.

And they have nearly a billion dollars of this.

[alokdhir]

Yep, this is the whole point. It's a liability but really it's the highest class of pristine asset you can have.

So in your opinion this advance payments received for future services has no costs associated with it in providing those services for which they received payments in advance ??

[SailorRob]

So in your opinion this advance payments received for future services has no costs associated with it in providing those services for which they received payments in advance ??

Mate I'm not going to explain it to you if you can't be bothered doing some basic work.

I have posted extensively on this topic and compared it to insurance float (this is better).

It's got nothing to do with my opinion, it's factual how these float generating businesses work.

This is how Berkshire grew to a trillion dollar company.

[alokdhir]

Mate I'm not going to explain it to you if you can't be bothered doing some basic work.

I have posted extensively on this topic and compared it to insurance float (this is better).

It's got nothing to do with my opinion, it's factual how these float generating businesses work.

This is how Berkshire grew to a trillion dollar company.

Thanks for your time ....I will wait for the long term to see the results ...Only time will tell how it goes ...

[SailorRob]

To the doubters out there, can you tell me what is wrong with an investment that costs .78c a unit that will be $1.10 per unit in twelve months time and multiples thereafter. Plus they pay you a divie along the way.

I'm not a doubter but I would be extremely cautious about predicting what prices will be in 12 Months time.

Every single person has been dramatically wrong doing this since the IPO, and in fact there's nobody in the world that can do it with any consistency with any company.

That's 8 billion people, millions of supercomputers and 50 thousand companies.

[SailorRob]

Thanks for your time ....I will wait for the long term to see the results ...Only time will tell how it goes ...

I'm very happy to help, I've posted about it before, people will get sick of me reposting it but I can find it if you like, but to get the general idea just Google 'insurance float'.

What you have said is not wrong, but even with insurance if every dollar gets paid out in claims and expenses in future, you still have that dollar now and can invest it for a period of time.

To understand this company it's critical to understand the liability structure of the funds.

[alokdhir]

I'm very happy to help, I've posted about it before, people will get sick of me reposting it but I can find it if you like, but to get the general idea just Google 'insurance float'.

What you have said is not wrong, but even with insurance if every dollar gets paid out in claims and expenses in future, you still have that dollar now and can invest it for a period of time.

To understand this company it's critical to understand the liability structure of the funds.

As per my understanding or what I think these DMF refers to and what future services are included ...like building maintenance , care provisions etc ...then I as a consumer will be more then happy to pay for them in advance for my rest life time ...it provides customer finality of expenses and covers future inflation and what not ....I maybe wrong in thinking what they refer to ...

[winner69]

Hey Rob ..you should look up Turners and see what they do with their insurance ….cool

[Meister]

To the doubters out there, can you tell me what is wrong with an investment that costs .78c a unit that will be $1.10 per unit in twelve months time and multiples thereafter. Plus they pay you a divie along the way.

This is what I am curious about. I actually appreciate Balance providing some balance to the thread, but even with some potential downsides to the company the discount to asset value is currently very significant. Why is OCA having such a premium discount compared to the other retirement village operators who are operating in the same environment, with the same risks around housing valuations?

[Muse]

Hey Rob ..you should look up Turners and see what they do with their insurance ….cool

Damn you winner lol

[BlackPeter]

This is what I am curious about. I actually appreciate Balance providing some balance to the thread, but even with some potential downsides to the company the discount to asset value is currently very significant. Why is OCA having such a premium discount compared to the other retirement village operators who are operating in the same environment, with the same risks around housing valuations?

Actually - you might find that Arvida features a similarly sized discount (to NTA) ... but yes for Ryman and Summerset the discount is smaller.

I suspect the difference is - hype.

Ryman was always the figurehead of the retirement industry and is as well the oldest and best known. They just demand some premium for name recognition.

Summerset used to be in the same class as OCA and ARV but managed to get out of the dungeon some years ago - and markets still love the perceived cruise experience for healthy and fit residents - never mind the residents who need care at some stage. Who knows, how long this honeymoon will last ...

OCA and Arvida are both still rather new ... and still more in the investment phase (rather than the harvest). Obviously - OCA's focus on care is not sexy either with investors, and many are just focussing on short term gains rather than the bigger picture of which services will be needed in future.

I guess future will show whether OCA is able to charge a premium for its care beds while supply is decreasing (economics) and demand increasing (demographics). As long as free market rules apply and OCA can pick whom they house I would not be too concerned.

[Lego_Man]

Actually - you might find that Arvida features a similarly sized discount (to NTA) ... but yes for Ryman and Summerset the discount is smaller.

I suspect the difference is - hype.

Ryman was always the figurehead of the retirement industry and is as well the oldest and best known. They just demand some premium for name recognition.

Summerset used to be in the same class as OCA and ARV but managed to get out of the dungeon some years ago - and markets still love the perceived cruise experience for healthy and fit residents - never mind the residents who need care at some stage. Who knows, how long this honeymoon will last ...

OCA and Arvida are both still rather new ... and still more in the investment phase (rather than the harvest). Obviously - OCA's focus on care is not sexy either with investors, and many are just focussing on short term gains rather than the bigger picture of which services will be needed in future.

I guess future will show whether OCA is able to charge a premium for its care beds while supply is decreasing (economics) and demand increasing (demographics). As long as free market rules apply and OCA can pick whom they house I would not be too concerned.

What you've just described is why i like a barbell retirement portfolio where i simply hold OCA and RYM.

[SailorRob]

Hey Rob ..you should look up Turners and see what they do with their insurance ….cool

Doubt I need to.

Almost nobody can do it.

Awful business for all but few.

For those it's pure gold.

Wouldn't touch an insurance company apart from Berkshire and Markel.

[t.rexjr]

Ever the teacher but not the student

[Maverick]

Here's my 2 cents worth,
I'm pretty disappointed in this result, in fact , very disappointed. While it was only a little under expectations , it was the reasons it was light that mattered.
To be clear I wholeheartedly commend the OCA team for achieving the result in this environment. My disappointment is not of their making.

There's no point to go into any of my analysis here as the 2 reports I've seen today from Jarden and Craigs have beautifully broken it all down with well thought out commentary alongside. I had already arrived at the same conclusions/opinions in myself and all our workings seem to match well too, so no point doubling up with such good material already out there. ( Craigs is particularly well laid out explaining where OCA is at).

So stepping back a little , what to do now? It seems the market hasn't got a clue on what to do with all this new info judging buy the possum in the headlight amount of non-turnover.
Firstly , to be fair OCA has had the worst luck since listing about which there is nothing they could have done better.
The key issues to date;
A. Covid. Lockdowns and border closures and the raft of unintended consequences.
B. During this time the GOVT has deliberately unmatched care funding costs. In this report where they are now making a loss on care if OCA`s care DMFs and PACs are stripped out- that's a new thing. This surely means a regular rest home without these fancy rooms will be looking at closing up shop about now.
C. The property market slow down ( not pricing, but lead times) is such that selling down apartments is now unsustainably slow with the current model.

Back in the good old days of 2018 , none of these issues existed , the plan then stacked up handsomely. The issues since have been brutal and relentless. OCA has adapted to survive, now cutting their investment in building ( which ensures future growth) in order to shore up cash flow.

At today's SP of 79c there is great value and upside from here to be had but the days of $1.60 will fade to history until there is a paradigm shift in B and/or C above.

While the above is factual, what to do about it as an investor is subjective.
My own opinion.
A. Covid…done and dusted and borders now open.
B. Who knows what the Govt will do . I have no opinion . Luckily OCAs care suites perform well in their modern buildings. Care was never OCAs future source of serious profit anyway. Logical to cull older homes, as they are, that can't be rebuilt economically.
C. SUM was once a laggard stock in 2019 .Sitting then on an ever growing pile of unsold stock. Winner had good graphs of it. A covid property boom happened and whammo…it sold down really well and SUM tripled in price.
OCA now has the same problem. It now has $370m of unsold stock, that's 0.37 billion.. These used to sell well, we know the market used to buy them, and still want to. It's just now the dead property market that has caused this backlog. This has become a burgeoning millstone and is the sole source of grief to both profit and cashflow. We know the market wants these units, all RV companies are reporting “very strong inquiry” . It's just that they can't sell their own house to effect a “sale”. (RYM and SUM echo this, and ARV most likely will next week)
If this goes on too long then OCAs future profit growth (years out from now -not soon) will hurt… but… when the property market normalizes the OCA are sitting on a powder keg of sales, pure cashflow and profit ready to go.

So whether to buy, hold or sell depends on the individual's opinion as to when Property sales will resume to normal turnover. Interestingly , many thought property values falling would be the problem , but that is clearly not a concern to OCAs offerings , it's all about market sales volume. This is the standout factor that will turn the now millstone to a powerful profit driver.
From that point of market change we will see $370m converted to profit rather quickly , cashflow and then the subsequent resumption of high construction numbers again.

To sum up;
With the $370m of unsold stock, the delivery stage of Helier (and others), interest rates peaking, the bottoming - or near-of the property market , high immigration….the odds are stacked for a property turnover turn around not too far away now.

IMO the hard yards for OCA investors are behind and the next stage could well have a touch of FOMO- just like we saw last week.

[bottomfeeder]

Have to agree somewhat Maverick. The Directors have become over exuberant about development and left the cash flow a bit short. Dividend at 30% of profit, means they need to shore up cash flow. External new bank debt at higher interest rates, a little shortsighted that they didnt look forward a bit more 18 months ago. But having said that no CR at this stage or appears in the near future. A CR would have brought the SP down to 55 or 60 cents. So thankful for that.

The directors decisions will stagnate the SP for at least another year. At least they maintained profitability and are addressing the cash flow problems. Better than some companies on the NZX.

If you can afford to hold for a few more years will be rewarded by 20% upside.

[Curly]

Any noise out there on who sold 1.9 mil shares and who bought them?

[RTM]

Have to agree somewhat Maverick. The Directors have become over exuberant about development and left the cash flow a bit short. Dividend at 30% of profit, means they need to shore up cash flow. External new bank debt at higher interest rates, a little shortsighted that they didnt look forward a bit more 18 months ago. But having said that no CR at this stage or appears in the near future. A CR would have brought the SP down to 55 or 60 cents. So thankful for that.

The directors decisions will stagnate the SP for at least another year. At least they maintained profitability and are addressing the cash flow problems. Better than some companies on the NZX.

If you can afford to hold for a few more years will be rewarded by 20% upside.

But why not sell, bet on something else for a year or two, then come back the sector when/ if it recovers?

NZ does not need house prices at say 10 x’s income. Unsustainable. Will the Government, whoever that might be, use the opportunity of lower house prices to instigate a CGT to hold the prices lower? Increasing housing supply will assist as well. The people forced out of houses by high interest rates will not be the ones buying OCA villages for the most part. They seem to be saying interest rates will need to stay high for a while….end of 2024 ? So it might be quite a while. If people are able to, from a health/support perspective, they might just stay put in their own home.

Disc: Holder ( both house and retirement stocks)

[bottomfeeder]

Like I said, better than some companies listed on the NZX. Sounds good, sell up and buy back in a years or so. But just how their 20% upside will factor in, that is the question. Straight line, curved line, no movement and then jump. I cant see much downside with OCA from here. Could invest in something else and when recession hits see my holdings drop 20%. So I think I am fairly safe with OCA, I dont need to have full confidence that all decisions are great but I see them getting there in the next two years.

[SailorRob]

But why not sell, bet on something else for a year or two, then come back the sector when/ if it recovers?

Indeed why not be the richest man in the world!

[SailorRob]

Have to agree somewhat Maverick. The Directors have become over exuberant about development and left the cash flow a bit short. Dividend at 30% of profit, means they need to shore up cash flow. External new bank debt at higher interest rates, a little shortsighted that they didnt look forward a bit more 18 months ago. But having said that no CR at this stage or appears in the near future. A CR would have brought the SP down to 55 or 60 cents. So thankful for that.

The directors decisions will stagnate the SP for at least another year. At least they maintained profitability and are addressing the cash flow problems. Better than some companies on the NZX.

If you can afford to hold for a few more years will be rewarded by 20% upside.


Man you have some incredible ability to see forward stock prices, A CR would have done this, the SP will stagnate for another year, in a few more years you'll be up 20%...

The only thing for certain is that you'll be wrong.

[SailorRob]

Any noise out there on who sold 1.9 mil shares and who bought them?


They were only bought, not sold.

[SailorRob]

They seem to be saying interest rates will need to stay high for a while….end of 2024 ?


What is their track record over the last 30 years been like about what they seem to be saying and then what actually happened.

Given the answer to that question, it there any point in considering what they are saying.

[SailorRob]

Ever the teacher but not the student

If the suggestion is that I am going to learn anything from 'Winner' I can assure you that will not happen, particularly in the manner he/she/it was suggesting for me to look at Turners. I have never even come close to learning anything from Winner.

Always better to be a student but you MUST be very careful who you learn from.

To understand insurance on a basic level will take around 200 hours, or 4 weeks. This is very relevant to the OCA thread as it will teach you all you need to know about how this business model works.

Study the greats of the industry, Lou Simpson, Gayner, Buffett, Ajit jane, Prem Watsa.

If you read all the Berkshire letters through the 70's and 80's while they were struggling to build the insurance business you will learn a lot, study Geico and it's near failure and Berkshires buy out. Study some major insurance companies that went bust and get to know short and long tail, the regulations and how none of that applies to OCA.

Look at how combined ratios are calculated and most importantly understand the attraction (and thus the danger) in being able to hand over pieces of paper that have promises on them about the future, for cash today. This is what causes it to be crap industry for most.

Look at the balance sheets closely and understand what sets Berkshire apart with what they can hold with the float and why.

It's a really interesting industry and a good foundation will help with other financial companies such as banks.

[bull....]

lol your like the media ... highlighting only one part of the story.

care to explain why dmf grew only 6% this current yr

did something go wrong with all there free money you talk about ?

sailor rob [QUOTE] I'll let the long term speak for itself. [QUOTE]

it was a hard question , i thought i would ask you as you are obviously a guru who understand insurance float's so well as you spent a week or two telling us all about them and how OCA has all this free money to make us all rich
but hey its alright to admit that you dont know the answer as to why with all this free float money they only made 6% maybe someone else out there is able to tell us ?

[SailorRob]

sailor rob [QUOTE] I'll let the long term speak for itself. [QUOTE]

it was a hard question , i thought i would ask you as you are obviously a guru who understand insurance float's so well as you spent a week or two telling us all about them and how OCA has all this free money to make us all rich
but hey its alright to admit that you dont know the answer as to why with all this free float money they only made 6% maybe someone else out there is able to tell us ?



Clearly you don't understand your own question.

The 6% is nothing to do with what they made old boy.

[Rawz]

[QUOTE=bull....;1004857]sailor rob [QUOTE] [COLOR=#333333]I'll let the long term speak for itself.

Clearly you don't understand your own question.

The 6% is nothing to do with what they made old boy.

why was it so low thou?

[BlackPeter]

sailor rob [QUOTE] I'll let the long term speak for itself. [QUOTE]

it was a hard question , i thought i would ask you as you are obviously a guru who understand insurance float's so well as you spent a week or two telling us all about them and how OCA has all this free money to make us all rich
but hey its alright to admit that you dont know the answer as to why with all this free float money they only made 6% maybe someone else out there is able to tell us ?



Are you well?

[Maverick]

But why not sell, bet on something else for a year or two, then come back the sector
)

That’s a logical idea but my record of doing “fancy footwork “and also watching others suggests that doesn’t seem to play out well. Plus there’s the tax implications.

As stated yesterday , it all comes down to when the broader property market turnover normalises . My opinion is that is not far away. Plus with the NZX being forward looking by 6 months, then the property turnaround could happen by Christmas which would affect share prices now. Perhaps that’s what drove the recent sector rally.

Im a big fan of Tony Alexander’s work on all this . His work is strongly pointing to the property market bottoming about now. So I thinking the recovery of the Share price has already begun.

Also the Helier starting is starting to be occupied now , even in this depressed property market , next report will still have a very nice lift . The analysts are saying it, my work is clearly saying it too.
Then at some point property will flow again, then we have a very powerfull concoction for things to get really good really fast. IMO stepping out now is the dead wrong thing to do. This is the time to step in.

If I came across a bit negative yesterday , I didn’t mean to. OCA were going to have a doozey 1HY24 which has now been dampened somewhat by a later delivery time of Helier and Bellevue (Chch) and more significantly, by the broad property slow down . But it will still be a VERY good result, and then onwards . It’s just that things won’t really race ahead for OCA untill the overall market normalises activity to unlock that backlog of unsold stock.

IMO that seems highly likely somewhere in the next 6 months.

[SailorRob]

That’s a logical idea but my record of doing “fancy footwork “and also watching others suggests that doesn’t seem to play out well. Plus there’s the tax implications.

As stated yesterday , it all comes down to when the broader property market turnover normalises . My opinion is that is not far away. Plus with the NZX being forward looking by 6 months, then the property turnaround could happen by Christmas which would affect share prices now. Perhaps that’s what drove the recent sector rally.

Im a big fan of Tony Alexander’s work on all this . His work is strongly pointing to the property market bottoming about now. So I thinking the recovery of the Share price has already begun.

Also the Helier starting is starting to be occupied now , even in this depressed property market , next report will still have a very nice lift . The analysts are saying it, my work is clearly saying it too.
Then at some point property will flow again, then we have a very powerfull concoction for things to get really good really fast. IMO stepping out now is the dead wrong thing to do. This is the time to step in.

If I came across a bit negative yesterday , I didn’t mean to. OCA were going to have a doozey 1HY24 which has now been dampened somewhat by a later delivery time of Helier and Bellevue (Chch) and more significantly, by the broad property slow down . But it will still be a VERY good result, and then onwards . It’s just that things won’t really race ahead for OCA untill the overall market normalises activity to unlock that backlog of unsold stock.

IMO that seems highly likely somewhere in the next 6 months.


Hence my comment about the richest man in the world.

Which you would be if you could consistently do 'fancy footwork'

Tony Alexander can't pick his nose. Awful predictive track record and very vested interest.

Agreed though that this is about transaction volumes normalising, not prices recovering.

Lots of moving balls here, no point trying to predict any of it or timeframes.

[SailorRob]

[QUOTE=SailorRob;1004862][QUOTE=bull....;1004857]sailor rob

why was it so low thou?


Low volumes, unsold stock.

Rubber band.

It can even go negative, which is also no problem.

[SailorRob]

Mav posted this 15 Months ago.

Just no point making short term predictions.

Anything can happen, this is why process vs outcome. Study the model and know that it will work in the long term.

"ARV and OCA PE were about 19/20 about 6 months ago when everything was property positive, oil was cheap enough, inflation was transitory and our smug little hermit nation was ticking along fine. See where I'm going with this. So now ARV and OCA have had PE compression all the way down to 12.5-13.Yes, RYM and SUM have too of course but run on different multiples. This is the next clue that the readjustment is now complete as i've never known PEs of ARV or OCA ever to go below this".

[Baa_Baa]

FWIW, Simply Wall St have this to say:



Consensus EPS estimates increase by 49%


The consensus outlook for fiscal year 2024 has been updated.


2024 consensus EPS increased from NZ$0.059 to NZ$0.087.
Revenues were reaffirmed at NZ$296.7m.
Net income forecast to shrink 5.7% next year vs 45% decline forecast for Healthcare industry in New Zealand.
Consensus price target reaffirmed at NZ$1.13.
Share price rose 2.6% to NZ$0.79 over the past week.

[bull....]

[QUOTE=Rawz;1004863][QUOTE=SailorRob;1004862]


Low volumes, unsold stock.

Rubber band.

It can even go negative, which is also no problem.

lol negative .... thats probably your return your talking about.

the cold hard truth is if you brought at ipo or covid low round about and sold out at the end of 2020 roundabout you did very well in OCA
if your still holding from ipo you have earned no cap gain and only div's with no imputations
if you brought after 2020 your losing big time
even if you brought at covid lows your returns are not that good annualised

as i have stated before this stock is a traders delight i would not agree with anything sailor says about your be rich in 20yrs if you just forget about it

timing has been everything in this stock

[Maverick]

Mav posted this 15 Months ago.

Just no point making short term predictions.

Anything can happen, this is why process vs outcome. Study the model and know that it will work in the long term.

"ARV and OCA PE were about 19/20 about 6 months ago when everything was property positive, oil was cheap enough, inflation was transitory and our smug little hermit nation was ticking along fine. See where I'm going with this. So now ARV and OCA have had PE compression all the way down to 12.5-13.Yes, RYM and SUM have too of course but run on different multiples. This is the next clue that the readjustment is now complete as i've never known PEs of ARV or OCA ever to go below this".



yep, you are right. I still can’t believe we are now seeing PEs now of 8 and 9.

I’ve been reading a very difficult book called “irrational exuberance “ . Which really says how crazy things get when people all group think and get into feedback loops. Completely illogical but countless examples through history.

As sure as day follows night things will change again.

To this point , I observe the media in all forms have almost completely ceased daily stories on property price falls and larger expected interest rate hikes. I personally believe this current feedback loop has run its course and the extremely negative RV sentiment will shortly reverse.

OCA doesn’t need house prices to go up , it just needs things to normalise. That is what I think I see starting to happen…but that’s for individuals to assess for themselves.

[SailorRob]

yep, you are right. I still can’t believe we are now seeing PEs now of 8 and 9.

I’ve been reading a very difficult book called “irrational exuberance “ . Which really says how crazy things get when people all group think and get into feedback loops. Completely illogical but countless examples through history.

As sure as day follows night things will change again.

To this point , I observe the media in all forms have almost completely ceased daily stories on property price falls and larger expected interest rate hikes. I personally believe this current feedback loop has run its course and the extremely negative RV sentiment will shortly reverse.

OCA doesn’t need house prices to go up , it just needs things to normalise. That is what I think I see starting to happen…but that’s for individuals to access for themselves.


Irrational Exuberance is a great book.

The property section in that book is a must read for everyone.

Property returns mostly always ZERO over the long term for obvious reason. He highlights that very clearly.

You cannot compound anything non productive more than inflation or else it will consume the world.

[SailorRob]

yep, you are right. I still can’t believe we are now seeing PEs now of 8 and 9.

I’ve been reading a very difficult book called “irrational exuberance “ . Which really says how crazy things get when people all group think and get into feedback loops. Completely illogical but countless examples through history.

As sure as day follows night things will change again.

To this point , I observe the media in all forms have almost completely ceased daily stories on property price falls and larger expected interest rate hikes. I personally believe this current feedback loop has run its course and the extremely negative RV sentiment will shortly reverse.

OCA doesn’t need house prices to go up , it just needs things to normalise. That is what I think I see starting to happen…but that’s for individuals to access for themselves.


Not sure if we should count on things normalising at pretty much the highest rates in recorded history, massive historical anomalies to prices to incomes and debt levels to productive capacity.

Irrational exuberance will explain all this much better than I can.

But turn over is a different story.

Prices are not discovered with low volumes.

Lets see some job losses and a real recession and then forced selling, then we discover the price.

[SailorRob]

yep, you are right. I still can’t believe we are now seeing PEs now of 8 and 9.

I’ve been reading a very difficult book called “irrational exuberance “ . Which really says how crazy things get when people all group think and get into feedback loops. Completely illogical but countless examples through history.

As sure as day follows night things will change again.

To this point , I observe the media in all forms have almost completely ceased daily stories on property price falls and larger expected interest rate hikes. I personally believe this current feedback loop has run its course and the extremely negative RV sentiment will shortly reverse.

OCA doesn’t need house prices to go up , it just needs things to normalise. That is what I think I see starting to happen…but that’s for individuals to access for themselves.



It looks like you're reading that the irrational exuberance is the NZ property market falling and the negative sentiment of today.

But this is the rational reaction to what was irrational exuberance.

Once a $hitbox that has practically fallen down in some gang ridden suburb of Whangarei is back to trading at 2.5-3 times normal income then we have normality.

From normality things can go way way down again of course.

Averages are made by half the time being spent underneath.

The only guy out there doing the real work is;

https://aucklandpropertyrealitycheck.substack.com/



Look at this - https://www.zillow.com/homes/161-Northbridge-Dr-Mooresville,-NC-28115_rb/84128341_zpid/

$700 grand NZD at 70c.

400 SM mansion in great location. with pool.

But New Zealand... it's diffrunt.

[Ricky-bobby]

Yeh business is tough at the moment… the increase interest rates are really squeezing NPAT. Things are def slowing. However who knows what the next 12 months are going to do? I see an article this morning saying stock ownership (US) is at its highest point since 2008… still plenty of money pumping around… anyway high debt/gearing is hurting businesses. The ones with little will be in a much better position to keep the profits rolling.

[winner69]

Hey Rob, I’m beginning to think you are predictably irrational

But keep up the good work

[ValueNZ]

Irrational Exuberance is a great book.

The property section in that book is a must read for everyone.

Property returns mostly always ZERO over the long term for obvious reason. He highlights that very clearly.

You cannot compound anything non productive more than inflation or else it will consume the world.
Im skeptical of the claim that property returns are mostly always zero. Surely property (land in particular as it's a scarce resource) can grow at the same rate as the growth of the economy, but not at a quicker rate for the reason you explained?
Cheers

[Habits]

Yes keep up the good work

Though try and keep it on topic Sailorman

[SailorRob]

Hey Rob, I’m beginning to think you are predictably irrational

But keep up the good work

I didn't write the book but I agree with it.

I belive in maths and long term normals against productive capacity as that's what drives everything.

Everything is related to productive capacity.

[nztx]

Yes keep up the good work

Though try and keep it on topic Sailorman


What was the topic again ? :)

[SailorRob]

Im skeptical of the claim that property returns are mostly always zero. Surely property (land in particular as it's a scarce resource) can grow at the same rate as the growth of the economy, but not at a quicker rate for the reason you explained?
Cheers


Good stuff ValueNZ! Always be skeptical of anything anyone says and do your own work, and where possible, go back to first principles.


My statement is certainly nuanced, and I will explain. It's relevant to OCA as it's all about property, but please, folks, you don't need to read if you don't wish to.


Firstly, and we will discuss this again, but land is in no way a scarce resource, for the most part anyway. NZ is about 1% urbanised, let's say 2% to save any arguments. Jump on Google Maps and study around any NZ provincial town or indeed Auckland, and you will see plentiful amounts of land, even coastal areas. There are some areas of scarcity, but these are few and far between. It always makes me smile when driving around NZ seeing ruddy-faced, beer-swilling, fat-gutted old men (not relevant here, but this is what I picture Bull to be) who have told me to "buy land as they're not making any more." Well, damn, all I see is land everywhere I look.


Now, another little project you can do is study the per-hectare price of the highest-quality pristine NZ farmland. From memory, it's about $28,000 per hectare. Now, figure out how many 500 square meter sections are in a hectare and make adjustments for roading and whatever else, and see what the actual land value is. Obviously, there are a lot of other costs, but four white pegs and some pipes and roads aren't that expensive. The scarcity and costs are all artificial, and your generation may not put up with the political system that enforces it, nor will the country be able to grow and prosper when everyone's productive capacity is going into pumping up values for the benefit of those further up the Ponzi.


So, if you go onto Homes.co.nz and take 10 randomly selected properties from 4 or 5 NZ towns and cities that have a sales history from the 1980s, and then adjust the prices for inflation using the RBNZ figures, and then factor in that those figures are light (strongly encourage going to the library and studying old papers from the 80s and building your own inflation models), you'll quickly see that there has been around a 2% real return CAGR over that 40-year period. Then you need to see that to get that 2% return has required the two biggest property booms that the world has seen back to back, with price-to-income ratios exploding higher and real net rental yields going deeply negative. If you normalise those PE ratios and factor in that the properties have not been maintained or upgraded to new standards, then most of the 2% gain goes away. Yes, it is there now, I will grant you that, and so my claim of zero over that period does not currently hold for most of NZ (unlike most of the world)


But it's very important to understand Shiller's argument and carefully presented figures of zero (or very close), and he uses European data going back 400 years too. And understand why your hypothesis of surely going up with GDP will not and cannot hold true. It can for a while as ratios crank up and political interference makes its mark.


It's also worth thinking through how it's possible for a really smart dude, the smartest poster on ST, Mav, who is currently reading "Irrational Exuberance," could entertain the thought (though it may end up being true) that after a 20-year unprecedented boom in property prices, which grew household debt to GDP to global historical records and blew out debt-to-income ratios and required 5000-year lows in interest rates, led to NET returns going so deeply negative that it's hard to believe and then had a very brief and small downturn that didn't even take prices back to 2020 levels... that this correction is surely nearly done and we'll be back to normal. I mean, WTF, why would this be your base case? Tony Alexander can go to hell. Sure, they may be right, but to expect this is insanity. Situations like this can take decades to play out, not months.

On top of all this, the government is waging a war on the margins of 'investment property' owners. Why are people going to buy property for a 2% NET return (which is actually much less) when they can get double in the bank? Why do people buy businesses where the entire revenue cannot pay the interest on the debt? Why will they continue to do this? Revenue, not income!! Mav, please tell me the answer to this!


I will say that the chances are extremely high that the prices provincial NZ property saw at the peak will never be attained again in real terms.


So why can't a non-productive asset keep up with GDP over time? Well, the biggest thing everyone forgets is that things don't become more expensive over time, they become cheaper, which is how we get a higher standard of living. Sure, in dollar terms, things become more expensive, but not against GDP or wages. So, what I am saying is that you can buy more goods and services for a week's wages than you could 10, 20, 30 years ago. The rare cases where you cannot usually have had heavy state interference, which ultimately we control as we can vote the pricks out and therefore control the legislature.


Now think through the physical process of developing a farm into a subdivision in 1980 versus now. Every part of the process is so much more efficient now, except the interference from the state. Think of the survey methods in the 80s, the manpower required vs satellite tech now, think of the earthmoving equipment and the pipe laying and concreting, think of all the brown manila folders moving around town by post vs the click of a button. Every physical part is so much more efficient. Yes, the Taniwha are bigger now, but again, will your generation stand for it? Will we stand for productive capacity going to placating Taniwha?


So, as can be seen, developing land now is much more efficient than in the past. It takes way less manpower. As the economy has grown, the amount of the economy needed to subdivide has shrunk. Think of it like the percentage of people working on farms in 1800 versus now for an extreme version of the effect I am highlighting.


Now think about building houses: hammers vs nail guns and factory construction, computer design... But what has happened is homes have become far superior, and this is why new build costs could keep closer to GDP, perhaps as they are not the same things as 100 sqm homes from the 80s without garages and ensuites. The house of 1980 could be built in a tiny fraction of the time now, so as the old homes produce nothing, they fall way behind GDP. They are worth less and less as everything else improves unless you upgrade them to new standards, and then there goes any return, as to keep them up with GDP, you have to spend GDP.


This is why, in most places in the world, long-term returns for existing property are zero. Shiller makes the case better than I, but it should be obvious that a non-productive asset like property or gold will do zero over time. Is NZ different?


We will see.

[Habits]

Is that you Robbo? 28k you're talking pine country not well located farmland. Since Govt high quality soils policy was introduced, land cant be converted, not even LS blocks. Now future kiwi homebuyers are facing a rough future.
Don't worry JK protege Luxon will fix it, yeah nah
Off topic, apologies

[SailorRob]

Is that you Robbo? 28k you're talking pine country not well located farmland. Since Govt high quality soils policy was introduced, land cant be converted, not even LS blocks. Now future kiwi homebuyers are facing a rough future.
Don't worry JK protege Luxon will fix it, yeah nah
Off topic, apologies


Wrong.

Not pine country but top quality dairy land. So easy to just check your facts before you post!

https://www.trademe.co.nz/a/property/rural/search?search_string=dairy%20farms%20for%20sale

And that's ASKING prices, Look at actual farms sold, think you can see on interest.co.nz.

What we should be looking at is marginal farmland on the outskirts of NZ towns and cities.

My 28,000 figure is too high.

But let me double it for the sake of the argument. Lets go with $50,000. The point is the same.




Bad Habits.

[Habits]

Wrong.

Not pine country but top quality dairy land. So easy to just check your facts before you post!

https://www.trademe.co.nz/a/property/rural/search?search_string=dairy%20farms%20for%20sale

And that's ASKING prices, Look at actual farms sold, think you can see on interest.co.nz.

What we should be looking at is marginal farmland on the outskirts of NZ towns and cities.

My 28,000 figure is too high.

But let me double it for the sake of the argument. Lets go with $50,000. The point is the same.




Bad Habits.

And what about the other point being the HQ soils. Thats a nice looking dairy farm though it could still be sold for trees in the near future. I dont know if they grow well that far south, but give it a few years.

[SailorRob]

And what about the other point being the HQ soils. Thats a nice looking dairy farm though it could still be sold for trees in the near future. I dont know if they grow well that far south, but give it a few years.

Yes, I wrote about state interference and that ValueNZ generation don't have to put up with it.

Ultimately NZ will keep falling behind the OECD with this type of stuff going on and someone will put a stop to it.

We will only allow our standard of living to fall so far.

The trade me link wasn't a specific property, it was them all.

[bull....]

maybe if OCA presentation talked about AI the stock would haVE jumped

[SailorRob]

maybe if OCA presentation talked about AI the stock would haVE jumped


Haha, damn right about that.

Every grifter is trying to hitch their wagon to AI, reminds me of the NFT craze.

[bull....]

In all seriousness if OCA had said they were investing in AI to improve there productiveness and simplify these repetitive tasks ( ie a lot of tasks are repetitive ) this could be used to free up hrs or even streamline operations reducing costs etc

its all in the data

[justakiwi]

Deleted............nope ...... not going to bite.


In all seriousness if OCA had said they were investing in AI to improve there productiveness and simplify these repetitive tasks ( ie a lot of tasks are repetitive ) this could be used to free up hrs or even streamline operations reducing costs etc

its all in the data

[Valuegrowth]

I agree property and gold are non-productive. We should go away with this mania and time to go with productivity and sustainability business to benefit future generation while protecting environment and society that we live.

Good stuff ValueNZ! Always be skeptical of anything anyone says and do your own work, and where possible, go back to first principles.


My statement is certainly nuanced, and I will explain. It's relevant to OCA as it's all about property, but please, folks, you don't need to read if you don't wish to.


Firstly, and we will discuss this again, but land is in no way a scarce resource, for the most part anyway. NZ is about 1% urbanised, let's say 2% to save any arguments. Jump on Google Maps and study around any NZ provincial town or indeed Auckland, and you will see plentiful amounts of land, even coastal areas. There are some areas of scarcity, but these are few and far between. It always makes me smile when driving around NZ seeing ruddy-faced, beer-swilling, fat-gutted old men (not relevant here, but this is what I picture Bull to be) who have told me to "buy land as they're not making any more." Well, damn, all I see is land everywhere I look.


Now, another little project you can do is study the per-hectare price of the highest-quality pristine NZ farmland. From memory, it's about $28,000 per hectare. Now, figure out how many 500 square meter sections are in a hectare and make adjustments for roading and whatever else, and see what the actual land value is. Obviously, there are a lot of other costs, but four white pegs and some pipes and roads aren't that expensive. The scarcity and costs are all artificial, and your generation may not put up with the political system that enforces it, nor will the country be able to grow and prosper when everyone's productive capacity is going into pumping up values for the benefit of those further up the Ponzi.


So, if you go onto Homes.co.nz and take 10 randomly selected properties from 4 or 5 NZ towns and cities that have a sales history from the 1980s, and then adjust the prices for inflation using the RBNZ figures, and then factor in that those figures are light (strongly encourage going to the library and studying old papers from the 80s and building your own inflation models), you'll quickly see that there has been around a 2% real return CAGR over that 40-year period. Then you need to see that to get that 2% return has required the two biggest property booms that the world has seen back to back, with price-to-income ratios exploding higher and real net rental yields going deeply negative. If you normalise those PE ratios and factor in that the properties have not been maintained or upgraded to new standards, then most of the 2% gain goes away. Yes, it is there now, I will grant you that, and so my claim of zero over that period does not currently hold for most of NZ (unlike most of the world)


But it's very important to understand Shiller's argument and carefully presented figures of zero (or very close), and he uses European data going back 400 years too. And understand why your hypothesis of surely going up with GDP will not and cannot hold true. It can for a while as ratios crank up and political interference makes its mark.


It's also worth thinking through how it's possible for a really smart dude, the smartest poster on ST, Mav, who is currently reading "Irrational Exuberance," could entertain the thought (though it may end up being true) that after a 20-year unprecedented boom in property prices, which grew household debt to GDP to global historical records and blew out debt-to-income ratios and required 5000-year lows in interest rates, led to NET returns going so deeply negative that it's hard to believe and then had a very brief and small downturn that didn't even take prices back to 2020 levels... that this correction is surely nearly done and we'll be back to normal. I mean, WTF, why would this be your base case? Tony Alexander can go to hell. Sure, they may be right, but to expect this is insanity. Situations like this can take decades to play out, not months.

On top of all this, the government is waging a war on the margins of 'investment property' owners. Why are people going to buy property for a 2% NET return (which is actually much less) when they can get double in the bank? Why do people buy businesses where the entire revenue cannot pay the interest on the debt? Why will they continue to do this? Revenue, not income!! Mav, please tell me the answer to this!


I will say that the chances are extremely high that the prices provincial NZ property saw at the peak will never be attained again in real terms.


So why can't a non-productive asset keep up with GDP over time? Well, the biggest thing everyone forgets is that things don't become more expensive over time, they become cheaper, which is how we get a higher standard of living. Sure, in dollar terms, things become more expensive, but not against GDP or wages. So, what I am saying is that you can buy more goods and services for a week's wages than you could 10, 20, 30 years ago. The rare cases where you cannot usually have had heavy state interference, which ultimately we control as we can vote the pricks out and therefore control the legislature.


Now think through the physical process of developing a farm into a subdivision in 1980 versus now. Every part of the process is so much more efficient now, except the interference from the state. Think of the survey methods in the 80s, the manpower required vs satellite tech now, think of the earthmoving equipment and the pipe laying and concreting, think of all the brown manila folders moving around town by post vs the click of a button. Every physical part is so much more efficient. Yes, the Taniwha are bigger now, but again, will your generation stand for it? Will we stand for productive capacity going to placating Taniwha?


So, as can be seen, developing land now is much more efficient than in the past. It takes way less manpower. As the economy has grown, the amount of the economy needed to subdivide has shrunk. Think of it like the percentage of people working on farms in 1800 versus now for an extreme version of the effect I am highlighting.


Now think about building houses: hammers vs nail guns and factory construction, computer design... But what has happened is homes have become far superior, and this is why new build costs could keep closer to GDP, perhaps as they are not the same things as 100 sqm homes from the 80s without garages and ensuites. The house of 1980 could be built in a tiny fraction of the time now, so as the old homes produce nothing, they fall way behind GDP. They are worth less and less as everything else improves unless you upgrade them to new standards, and then there goes any return, as to keep them up with GDP, you have to spend GDP.


This is why, in most places in the world, long-term returns for existing property are zero. Shiller makes the case better than I, but it should be obvious that a non-productive asset like property or gold will do zero over time. Is NZ different?


We will see.

[nizzy]

Can we get this page back to discussing Oceania? There's other sites and even a thread here on ST for general raving. Thanks.

[X-men]

What do u want to talk about? The result out....it is what is it....SP will trade around 80c ish...till the next result

[SailorRob]

Can we get this page back to discussing Oceania? There's other sites and even a thread here on ST for general raving. Thanks.

Hi nizzy, when are you going to contribute to this thread?

Please enlighten us with your analysis.

Thanks in advance.

[SailorRob]

its a bit weird how hard it is for nurses to move, apart from NZ to Australia.
Daughter RN has moved to Canada (BC), but not nursing as takes at least 1 year and $10k to get registration, and can take 2 yrs. And yet they crying out for nurses same as NZ, Aus, UK etc. So she is working in a skifield cafe.

Very interesting, do you have anything else?

You want carless days back??

How about you start yourself.

[RTM]

Can we get this page back to discussing Oceania? There's other sites and even a thread here on ST for general raving. Thanks.

We hold both SUM and OCA. Have always considered them linked closely to the real estate market.
Accordingly, have therefore been interested in the discussions of recent days, be good to come back to them in a year or two.

[SailorRob]

We hold both SUM and OCA. Have always considered them linked closely to the real estate market.
Accordingly, have therefore been interested in the discussions of recent days, be good to come back to them in a year or two.

Certainly no predictions from me about the real estate market.

I have absolutely no clue what will happen to it and neither does anyone else.

Just highlighting that a return to 'normal' so very soon after what we've been through over the last 20 years isn't a clever base case.

Only so much of GDP can go into such things for so long before causing massive structural issues in an economy.

[Balance]

Courtesy of posting by Shareguy on the other forum :

Craigs latest "You can't eat NTA"

OCA delivered a flat FY23 result, with uEBITDA up 5% to $80m (or c.2% organic growth, after backing out acquisitions). OCA's earnings have been broadly flat for five years now as it upgrades its portfolio. Most key metrics deteriorated, with new sales well below our expectations, and the level of unsold inventory almost doubled to $374m over 2H23. Net debt increased to $551m, with gearing up 780bps YoY to 37%, above management's target.
Course correction
OCA's key problems are twofold: i) the existing assets generate negative FCF and ii) its new villages have been slow to sell. Indeed, based on the run rate of sales in 2H23, it is taking OCA around 2 years to sell units. To their credit management have acknowledged the problem and are undertaking correction actions including: i) lowering the build rate to 200-250 units pa ii) lowering the capex intensity of the build rate by pivoting towards broad acre sites iii) selling assets, with over $10m sold to date and c.$50m to go iv) lowering the dividend payout ratio from 50-60% to 30-50% (payout was 38% in FY23). These actions should see net debt start to trend down from 2H24.

You can't eat NTA

Trading at 0.6x NTA, OCA has gained some popularity amongst value investors, but as one seasoned fund manager once told this analyst "you can't eat NTA!". We are cautious on the notion OCA is a "value" stock and caution further that not all NTAs are created equal. We highlight OCA's free cashflow from its existing portfolio (that is, operating cashflows less new sales revenue and growth capex but ignoring interest) was -$11.8m in 2H23 alone. While a slight improvement on pcp, OCA's cash generation is not supportive of the reported book value of its assets in our view. Indeed, as we highlight in the note, OCA's cash generation from its existing assets is significantly worse than RYM and SUM relative to its asset backing. In short, the lower cash generation of OCA's existing assets supports the shares trading at a deeper discount to reported book value than its larger peers.
Upgrade to Neutral, $0.90 TP
OCA is now taking corrective action which should see net debt start to come down from 2H24, at around the same time housing market conditions start to improve post the RBNZ's pause yesterday, while margin from The Helier development should help OCA deliver earnings growth over FY24/FY25 (CIPe +14% FY24/FY25

[winner69]

Craig’s cautious on the notion of OCA being a ‘value’ stock

But I suppose what represents ‘value’ depends on an individuals point of view and no doubt many if not the majority see OCA as a ‘value’ play …..cheap as

[bull....]

Courtesy of posting by Shareguy on the other forum :

Craigs latest "You can't eat NTA"

OCA delivered a flat FY23 result, with uEBITDA up 5% to $80m (or c.2% organic growth, after backing out acquisitions). OCA's earnings have been broadly flat for five years now as it upgrades its portfolio. Most key metrics deteriorated, with new sales well below our expectations, and the level of unsold inventory almost doubled to $374m over 2H23. Net debt increased to $551m, with gearing up 780bps YoY to 37%, above management's target.
Course correction
OCA's key problems are twofold: i) the existing assets generate negative FCF and ii) its new villages have been slow to sell. Indeed, based on the run rate of sales in 2H23, it is taking OCA around 2 years to sell units. To their credit management have acknowledged the problem and are undertaking correction actions including: i) lowering the build rate to 200-250 units pa ii) lowering the capex intensity of the build rate by pivoting towards broad acre sites iii) selling assets, with over $10m sold to date and c.$50m to go iv) lowering the dividend payout ratio from 50-60% to 30-50% (payout was 38% in FY23). These actions should see net debt start to trend down from 2H24.

You can't eat NTA

Trading at 0.6x NTA, OCA has gained some popularity amongst value investors, but as one seasoned fund manager once told this analyst "you can't eat NTA!". We are cautious on the notion OCA is a "value" stock and caution further that not all NTAs are created equal. We highlight OCA's free cashflow from its existing portfolio (that is, operating cashflows less new sales revenue and growth capex but ignoring interest) was -$11.8m in 2H23 alone. While a slight improvement on pcp, OCA's cash generation is not supportive of the reported book value of its assets in our view. Indeed, as we highlight in the note, OCA's cash generation from its existing assets is significantly worse than RYM and SUM relative to its asset backing. In short, the lower cash generation of OCA's existing assets supports the shares trading at a deeper discount to reported book value than its larger peers.
Upgrade to Neutral, $0.90 TP
OCA is now taking corrective action which should see net debt start to come down from 2H24, at around the same time housing market conditions start to improve post the RBNZ's pause yesterday, while margin from The Helier development should help OCA deliver earnings growth over FY24/FY25 (CIPe +14% FY24/FY25

sailor i thought you said OCA was cash cow

[SailorRob]

sailor i thought you said OCA was cash cow


Correct.

This is why Craig's analysts are exactly that and not managing their own private portfolio.

Show me one of their products that has created any value for anyone.

[SailorRob]

I've read their whole report and it seems like they don't get the big picture, the whole notion of NTA is extremely flawed here as is backing out the cash flows from new sales... I mean that's how the whole model works.

It is that revenue up front cost free that drives the bus.

Then the new sales become resales....

[Balance]

Craig’s cautious on the notion of OCA being a ‘value’ stock

But I suppose what represents ‘value’ depends on an individuals point of view and no doubt many if not the majority see OCA as a ‘value’ play …..cheap as

You know the old saying when buying things, W69 ….’cheap things no good, good things not cheap!’

[SailorRob]

You know the old saying when buying things, W69 ….’cheap things no good, good things not cheap!’


What about the saying;

I staked my reputation on stating that OCA would be doing a capital raise and made a public pillock of myself and then didn't have the courage or humility to admit that I was completely and utterly wrong. I viciously attacked anyone with an opposing view and then laid low the day of the announcement like a yellow bellied lizard and then slowly tried to raise my head back up hoping that nobody would notice but I was wrong, everyone remembered and my credibility was shot through like a poster of Jacinda on a power pole in Invercargill.

[Greekwatchdog]

What about the saying;

I staked my reputation on stating that OCA would be doing a capital raise and made a public pillock of myself and then didn't have the courage or humility to admit that I was completely and utterly wrong. I viciously attacked anyone with an opposing view and then laid low the day of the announcement like a yellow bellied lizard and then slowly tried to raise my head back up hoping that nobody would notice but I was wrong, everyone remembered and my credibility was shot through like a poster of Jacinda on a power pole in Invercargill.

Well said Sailor.

Balance, go check post 14987 where you quoted CR at $0.40. I guessing the egg wash over your face has made quite mask on your reputation or is that your EGO? Alternatively go play with that other dog on alternative website and consult you precious EGO in his kennel.

Your full of it and you don't have the courage or humility to off apologies to those you slammed who disagreed with you.

[winner69]

If they don’t sell the held for sale stuff and/or get some real sales momentum going to reduce the huge number of unsold units a capital raise is still on the cards …maybe Balance just got the timing wrong.

[Valuegrowth]

Will they issue new shares like right issues?
If they don’t sell the held for sale stuff and/or get some real sales momentum going to reduce the huge number of unsold units a capital raise is still on the cards …maybe Balance just got the timing wrong.

[Balance]

Well said Sailor.

Balance, go check post 14987 where you quoted CR at $0.40. I guessing the egg wash over your face has made quite mask on your reputation or is that your EGO? Alternatively go play with that other dog on alternative website and consult you precious EGO in his kennel.

Your full of it and you don't have the courage or humility to off apologies to those you slammed who disagreed with you.

Apologise? For what?

For having a view and being prepared to articulate that view?

Get a life, loser.

[Greekwatchdog]

Apologise? For what?

For having a view and being prepared to articulate that view?

Get a life, loser.

I rest my case.

You insult others whilst who oppose your view, you belittle them. Then IF you get it right the world knows that you called it then you go calling those people out.

Loser? Only one loser here Balance, and you lack the class for me to waste any more time on such a person like you who lacks humility.

GO OCA.

[SailorRob]

Apologise? For what?

For having a view and being prepared to articulate that view?

Get a life, loser.


That's the problem unbalanced.

You did not articulate your view.

As you could not.

Your view was oh the share price is falling, that means there is 100% for certain going to be a CR.

But you know what, you're actually better than some who claimed they were in fact right all along as a CR took place by selling some assets.

And I'll tell you another thing, you've got some gall showing your face round here.

[justakiwi]

OMG will you lot just stop! It’s like a bloody kindergarten in here :t_down:

[winner69]

Hey Mav - that cash flow chart you posted not long ago

Hard to read the numbers but what you had for H223 seemed pretty close to what happened. Is that so?

So we can look forward to a +ve number in H124 eh

[Ferg]

I've read their whole report and it seems like they don't get the big picture, the whole notion of NTA is extremely flawed here as is backing out the cash flows from new sales... I mean that's how the whole model works.

It is that revenue up front cost free that drives the bus.

Then the new sales become resales....

I saw that too and it had me scratching my head. As you say new sales "drives the bus". It could be they are trying to get to free cashflow without those sales given such proceeds MUST be paid off the development loan facility. But if that is the case, then they should also back out any such borrowings under that same facility to be consistent in their analysis.....which feels like two adjustments too many. The outstanding balance on the development facility bears some relationship to the value of unsold new stocks so it is still a relevant number, as is the cash flow value of new sales. Unless I am seriously misunderstanding something. Conceptually those CIP adjustments don't sit well with me, but I admit I have not dived deep enough into their report.

[SailorRob]

I saw that too and it had me scratching my head. As you say new sales "drives the bus". It could be they are trying to get to free cashflow without those sales given such proceeds MUST be paid off the development loan facility. But if that is the case, then they should also back out any such borrowings under that same facility to be consistent in their analysis.....which feels like two adjustments too many. The outstanding balance on the development facility bears some relationship to the value of unsold new stocks so it is still a relevant number, as is the cash flow value of new sales. Unless I am seriously misunderstanding something. Conceptually those CIP adjustments don't sit well with me, but I admit I have not dived deep enough into their report.


Yes, I think they are analysing it mechanically like they have been taught without seeing the big picture. Missing the forest for the trees. I will do some more work.

I also read their Agrosy report and I am certain that they are messing that one up, the OCA report they say you cant eat NTA and cash flows are an issue (when clearly they are not, just their definition of cash flows are) And Agrosy where cash flows are a REAL issue, they just look at earnings and all is good.

Then the My food bag analysis is great, conservative and balanced... but then the same analyst has been pumping it since $1.85. So what he was thinking/seeing back then god knows.

[Maverick]

Hey Mav - that cash flow chart you posted not long ago

Hard to read the numbers but what you had for H223 seemed pretty close to what happened. Is that so?

So we can look forward to a +ve number in H124 eh
Hi Winner , my expectations (using my own parameters as laid out previously) for the 2HY23 was -$39m and we got -$43m. So close enough. They undersold unit volumes but offset somewhat by high sale prices and lower cooperate cost increases.

So your question about forward cashflow going positive 1HY24 as per that graph I posted recently. ..Yes they will.

What's has changed though makes any future cashflow projections highly unpredictable and rather pointless.
There's been a raft of changes;
1. Reduced dividend payout.
2. Assets being held for sale. 2 being near sold , who knows about the remaining assets timeline.
3. Future sales of there MASSIVE pantry of unsold stock. We are only guessing when this flood gate of cash and profit opens ( IMO before Christmas ).
4. Capex is now heading to zero from $80m/HY within 2 years. That's how long they need will need to finish all their work in progress.

All of these factors are fully controllable by OCA. The evidence in this report says they have throttled development to suit the current environment . They are being defensive right now as any property developer should but they can turn on a dime and reramp development when they choose to.
You might have noticed they haven't started a single new development this last HY.

So to sum up. They are in complete control of cashflow and there is no issue whatsoever of a problem upstream. They will be cash flow positive 1HY24 if they stay on this course with only further upside should sales pick up to more normal rates of turnover.

BTW Sailor and Ferg, loving your thoughts and commentary.

[SailorRob]

Hi Winner , my expectations (using my own parameters as laid out previously) for the 2HY23 was -$39m and we got -$43m. So close enough. They undersold unit volumes but offset somewhat by high sale prices and lower cooperate cost increases.

So your question about forward cashflow going positive 1HY24. ..Yes they will.

What's has changed though makes any future cashflow projections highly unpredictable and rather pointless.
There's been a raft of changes;
1. Reduced dividend payout.
2. Assets being held for sale. 2 being near sold , who knows about the remaining assets timeline.
3. Future sales of there MASSIVE pantry of unsold stock. We are only guessing when this flood gate of cash and profit opens ( IMO before Christmas ).
4. Capex is now heading to zero from $80m/HY within 2 years. That's how long they need will need to finish all their work in progress.

All of these factors are fully controllable by OCA. The evidence in this report says they have throttled development to suit the current environment . They are being defensive right now as any property developer should but they can turn on a dime and reramp development when they choose to.
You might have noticed they haven't started a single new development this last HY.

So to sum up. They are in complete control of cashflow and there is no issue whatsoever of a problem upstream. They will be cash flow positive 1HY24 if they stay on this course with only further upside should sales pick up to more normal rates of turnover.

BTW Sailor and Ferg, loving your thoughts and commentary.


Appreciated Mav, I thought you had said that the Craigs report summed things up well. Perhaps you just meant the issues they highlighted that have been and are facing OCA of late.

So you do see things playing out from here differently than the Craigs analyst, particularly on their detailed number set going out to 2026?

[Balance]

If they don’t sell the held for sale stuff and/or get some real sales momentum going to reduce the huge number of unsold units a capital raise is still on the cards …maybe Balance just got the timing wrong.

So clear the directors (and the bean counting CEO) decided to go for asset sales rather than a CR in the interim.

So much for the growth strategy but wait, the company continues to pay dividends using debt and while bleeding cash from its operations (refer Craigs).

[winner69]

So clear the directors (and the bean counting CEO) decided to go for asset sales rather than a CR in the interim.

So much for the growth strategy but wait, the company continues to pay dividends using debt and while bleeding cash from its operations (refer Craigs).

Seems to be the way forward Balance …..hope it works out for them.

Headline F22 results headlined ‘Oceania positioned for growth’ …….to their credit they were more subdued in F23 announcement and just headlined “Oceania deliver solid result”

[SailorRob]

Sounds like you fellows should put on a short position.

[Maverick]

Appreciated Mav, I thought you had said that the Craig's report summed things up well. Perhaps you just meant the issues they highlighted that have been and are facing OCA of late.

So you do see things playing out from here differently than the Craig's analyst, particularly on their detailed number set going out to 2026?
I do think Craig's and Forbar have a very good handle on the company's fundamentals now.
The problem with projecting anything currently is that it all hinges on the property market turnover so much. The property market has been, and is, so dynamic that " positioned for growth" is still very true while for now they are only achieving a "solid result".

My workings of the next 6-12 months underlying profit is slightly over Craig's using this current dead property market metrics. Their other Craig's figures are good enough but key metrics will swing wild from here- with NZ property sales- depending on what happens next making it meaningless to fixate on them to much for now.

"Positioned for growth" is very much alive and in the waiting but its realization is solely set by when the property market turnover resumes to more normal times. Then the powder keg of stock will unlock significantly - but when? that's the guess work that matters most that no one knows until afterwards.

OCA have performed "solidly" in awful external circumstances to date. The potential for FY24 underlying profit is in the range of up 15% -45% depending on if this existing market continues as is or returning to normal NZ property turnover ( that's not prices , its just volume that they need). The swings are that large on a factor so seemly small.

Here`s a fun fact for ya to demonstrate that OCA isn't doing as badly as the share price says- based on actual underlying profit.
If OCA was valued on the same PE at its peak of $1.58 it would today be trading at $1.66.

Easy to do some dreaming and consider that when they get FY24 15%- 45% U/profit rise AND the mood of the market even slightly improves to a pathetic PE of 13 ( currently 8.9) just how much upside lays ahead. My analysis sees virtually zero downside EPS risk to the model from here other than a catastrophic external event, but significant upside when property turnover returning to normal. ( IMO that turning is beginning now)

[percy]

I do think Craig's and Forbar have a very good handle on the company's fundamentals now.
The problem with projecting anything currently is that it all hinges on the property market turnover so much. The property market has been, and is, so dynamic that " positioned for growth" is still very true while for now they are only achieving a "solid result".

My workings of the next 6-12 months underlying profit is slightly over Craig's using this current dead property market metrics. Their other Craig's figures are good enough but key metrics will swing wild from here- with NZ property sales- depending on what happens next making it meaningless to fixate on them to much for now.

"Positioned for growth" is very much alive and in the waiting but its realization is solely set by when the property market turnover resumes to more normal times. Then the powder keg of stock will unlock significantly - but when? that's the guess work that matters most that no one knows until afterwards.

OCA have performed "solidly" in awful external circumstances to date. The potential for FY24 underlying profit is in the range of up 15% -45% depending on if this existing market continues as is or returning to normal NZ property turnover ( that's not prices , its just volume that they need). The swings are that large on a factor so seemly small.

Here`s a fun fact for ya to demonstrate that OCA isn't doing as badly as the share price says- based on actual underlying profit.
If OCA was valued on the same PE at its peak of $1.58 it would today be trading at $1.66.

Easy to do some dreaming and consider that when they get FY24 15%- 45% U/profit rise AND the mood of the market even slightly improves to a pathetic PE of 13 ( currently 8.9) just how much upside lays ahead. My analysis sees virtually zero downside EPS risk to the model from here other than a catastrophic external event, but significant upside when property turnover returning to normal. ( IMO that turning is beginning now)

Thanks for sharing.

[SailorRob]

I do think Craig's and Forbar have a very good handle on the company's fundamentals now.
The problem with projecting anything currently is that it all hinges on the property market turnover so much. The property market has been, and is, so dynamic that " positioned for growth" is still very true while for now they are only achieving a "solid result".

My workings of the next 6-12 months underlying profit is slightly over Craig's using this current dead property market metrics. Their other Craig's figures are good enough but key metrics will swing wild from here- with NZ property sales- depending on what happens next making it meaningless to fixate on them to much for now.

"Positioned for growth" is very much alive and in the waiting but its realization is solely set by when the property market turnover resumes to more normal times. Then the powder keg of stock will unlock significantly - but when? that's the guess work that matters most that no one knows until afterwards.

OCA have performed "solidly" in awful external circumstances to date. The potential for FY24 underlying profit is in the range of up 15% -45% depending on if this existing market continues as is or returning to normal NZ property turnover ( that's not prices , its just volume that they need). The swings are that large on a factor so seemly small.

Here`s a fun fact for ya to demonstrate that OCA isn't doing as badly as the share price says- based on actual underlying profit.
If OCA was valued on the same PE at its peak of $1.58 it would today be trading at $1.66.

Easy to do some dreaming and consider that when they get FY24 15%- 45% U/profit rise AND the mood of the market even slightly improves to a pathetic PE of 13 ( currently 8.9) just how much upside lays ahead. My analysis sees virtually zero downside EPS risk to the model from here other than a catastrophic external event, but significant upside when property turnover returning to normal. ( IMO that turning is beginning now)

Thanks. Exactly how I see it, including the higher property turnover. Everyone is at the 'wait and see' stage.

[Balance]

I rest my case.

You insult others whilst who oppose your view, you belittle them. Then IF you get it right the world knows that you called it then you go calling those people out.

Loser? Only one loser here Balance, and you lack the class for me to waste any more time on such a person like you who lacks humility.

GO OCA.

Yup - Go OCA - down 23% in 1 year.

You want to see Real GO - try SPY, up 115% in the same period.

You savvy and getting the picture now, LOSER?

[Greekwatchdog]

Yup - Go OCA - down 23% in 1 year.

You want to see Real GO - try SPY, up 115% in the same period.

You savvy and getting the picture now, LOSER?

Wow, another one of your shallow attack's. Says a lot about you as a person Balance when you resort to such attacks on people despite being so wrong on CR.

Congrats on SPY, Great to see a win in a tough environment. Are they in the Retirement Village industry? NO. So poor example on your part you desperate fool.

[SailorRob]

Thanks. Exactly how I see it, including the higher property turnover. Everyone is at the 'wait and see' stage.

Actually one pushback Mav, a PE of 13 isn't so pathetic these days. That's a 7.7% yield with 60% reinvested at the ROE.

When you can buy Berkshire for the same price it really puts it into perspective.

Perhaps all things considered, 13 is about right?

[SailorRob]

Yup - Go OCA - down 23% in 1 year.

You want to see Real GO - try SPY, up 115% in the same period.

You savvy and getting the picture now, LOSER?

There is really no point in retrospectively comparing any two companies share price over a 12 month period.

[Entrep]

Balance, the school yard bully. Absolutely pathetic.

Take a good hard look at yourself. Imagine calling people names on some anonymous internet forums to make yourself feel better.

Seriously, take a sabbatical from the internet, go outside, and touch some grass.

[winner69]

Some rough numbers of what’s available for sale in F24

Unsold units they say $374m ……let’s say 500 units

They building flat out …….should deliver say 225 new units

No idea what the ‘departure’ rate is let’s say 275 ‘departures’ and become available for sale

Jeez that means 1,000 units up for sale

Last year they had 408 sales

So if property market picks up they could could easily double annual sales in F24 ….no shortage of available stock

No wonder likes of Mav excited

[winner69]

Anybody know what the ‘departure’ rate is ……like what %age units come up for resale each year

[Rawz]

Geez Balance what's happened to you.. you've changed bro

[Muse]

Yup - Go OCA - down 23% in 1 year.

You want to see Real GO - try SPY, up 115% in the same period.

You savvy and getting the picture now, LOSER?

Don't take it there Balance.

When SPY was trading at 65c last year, the market was wrong.

With OCA trading at whatever it is now, the market could also be wrong (I don't know and don't have a view).

Investing rewards those who persevere & take the time to do their fundamental analysis, looking for opportunities not recognised.

I've had investments that fell by 50% after I invested and still managed to double my money. I've had investments that were up 50% and still managed to sell for a loss (I hate that). And numerous other combinations.

The only things that matter in the end are the day & price you buy something, the yield you get on the way, and the price you sell it for.

Everything else is just noise.

[justakiwi]

100% correct.



The only things that matter in the end are the day & price you buy something, the yield you get on the way, and the price you sell it for.

Everything else is just noise.

[bull....]

Some rough numbers of what’s available for sale in F24

Unsold units they say $374m ……let’s say 500 units

They building flat out …….should deliver say 225 new units

No idea what the ‘departure’ rate is let’s say 275 ‘departures’ and become available for sale

Jeez that means 1,000 units up for sale

Last year they had 408 sales

So if property market picks up they could could easily double annual sales in F24 ….no shortage of available stock

No wonder likes of Mav excited

also there is the risk of all that inventory ( applies to all RVs ) sitting there unsold.
bit like a retailer with to much inventory ... does that mean they do a briscoe's sale ? to move it

[JeffW]

Anybody know what the ‘departure’ rate is ……like what %age units come up for resale each year

On page 22 of the results presentation the dollar value of resales is 178.8m (214.2m previous year) so probably your guesstimate of 275 is not too far away

[winner69]

All the recent marketing to ‘raise brand awareness’ might come in handy now

Maybe they need to change tack and do more of a hard sell

[Ferg]

On page 22 of the results presentation the dollar value of resales is 178.8m (214.2m previous year) so probably your guesstimate of 275 is not too far away
Hi Jeff

That figure of $178.8 incudes new sales. I believe the correct figure for the dollar value of resales is $131m - but we need to be looking at the expiring ORA's to get the $ value of departures. Not the value paid by incoming residents. But the good news is the guesstimate of 275 is close.

$131m for resales is made up of $27m for resale gains plus $104m for the original value for outgoing residents ORAs. (Note 27/131 is close to the disclosed resale margin of 21%). $104m for outgoing residents ORAs is made up of cash outflows of $79m plus $25m DMF retained. All from page 22.

Sense checking the $131m we know we have 182 care suite sales @ $324k each gives $59m. And we have 98 units sold at a guessed average value of $736k to give the remaining $72m. Add $72m and $59m gives $131m for total resales value. $736k is around half way between the resales prices for villas and apartments.


Anybody know what the ‘departure’ rate is ……like what %age units come up for resale each year

Winner

FY23: average resale price in FY23 was $468k (being $131m/280). Deduct resale gains of 21% and I'm guessing average price for departed residents was $387k. This is assuming the same sales mix of units and care suites.

Using the departed value above of $104m divided into $387k original price, I estimate there were around 270 departures in FY23. Very close to the 275 guesstimate. These numbers exclude departures who did not have an ORA (e.g. care suites clients who pay weekly).

Average tenure for care suites is about 2 years. But a number of those are sold without an ORA. Average tenure for units is 5-7 years. But you can't divide those figures into the opening or closing stocks given the trajectory of stock growth over the last 5-7 years, the confusion surrounding unsold vs unoccupied care suites and there is a certain percentage unsold.

[JeffW]

Thanks Ferg, much appreciated.

[bull....]

looks like breaking out from post results digestion ... not uncommom for oca to have a wee run post results if market likes them

also national flip flopping on building density etc just creates uncertainty thus tightening the market more providing a bottom quicker to the market as everybodty will wait till after election now to build

[thegreatestben]

everybodty will wait till after election now to build

Or to head to Australia, definitely factoring this in before we buy/build again

[SailorRob]

So even is the profit estimates as provided by Craigs are accurate out to 2026 and we apply what Mav has suggested is a paltry PE of 13 (I have no strong feeling on that) but 13 may indeed be low considering the runway for growth and the by then pristine balance sheet...

We get to a near billion in market cap.

Which is a compounded 20% return from here plus dividends.

Not too shabby and that's on very conservative estimates.

[thegreatestben]

Oooh I'm back in positive this afternoon :)