OCA - Oceania Group - retirement villages

[bottomfeeder]

Just show me where it is stated that anybody selling after three years must be an investor? Anybody who intends to make money with buying and selling is a trader. Ask IRD l;) ; No bright line on shares :);

But again - we deviate. If you want to continue this discussion, please put it into the relevant forum.
This is particularly relevant to OCA. Trading in OCA has its own peculiarities.

[Azz]

Maybe one day ;)

But until then (buying companies outright), you're at mercy to the share price. Not what you think it should be, but what it actually is.

[bull....]

Just show me where it is stated that anybody selling after three years must be an investor? Anybody who intends to make money with buying and selling is a trader. Ask IRD l;) ; No bright line on shares :);

But again - we deviate. If you want to continue this discussion, please put it into the relevant forum.

think your deflecting from the fact that any value investor that did there homework correctly would have sold in 21 knowing that future cashflows would be less in the future.

changing your mind on a stock is allowed

[mike2020]

I may be repeating myself but the run up to 1.61 in 2021 was from my personal perspective entirely based on the drop in interest rates and the corresponding rise in property values, almost a no brainer ftom about September 2020. You can see the inverse effect over the last 18 months. I can see the cycle repeating again, maybe not as fast or dramatic but who knows.

[ValueNZ]

But until then (buying companies outright), you're at mercy to the share price. Not what you think it should be, but what it actually is.
"Mercy" to the share price lol. Having an irrational drunk on the other side of the transaction is of benefit to me. When private transactions occur, they happen at reasonable prices since the seller is almost always fully aware of what their business is worth.

It's the nature of these auction markets to often have irrationally low prices like OCA, JXN. Similarly, often prices are irrationally high like NVDA.

[Azz]

"Mercy" to the share price lol. Having an irrational drunk on the other side of the transaction is of benefit to me. When private transactions occur, they happen at reasonable prices since the seller is almost always fully aware of what their business is worth.

It's the nature of these auction markets to often have irrationally low prices like OCA, JXN. Similarly, often prices are irrationally high like NVDA.

"irrationally low" "irrationally high": you're living in a fantasy world; a world where your SUBJECTIVE share price differs from the actual share price. You're gonna go broke.

[bull....]

wow big dumps going on .......... run for the hills :scared: sailor rob is capitulating

[ValueNZ]

"irrationally low" "irrationally high": you're living in a fantasy world; a world where your SUBJECTIVE share price differs from the actual share price. You're gonna go broke.
I think you ought to study the history of the stock market. There are endless examples of absurdly priced companies that fool many people into buying due to hype and ignoring fundamentals. Personally I believe (so does Bloomstran - you'd be wise to follow his advice) that Nvidia draws parallels to Microsoft in 1999 with its high P/E ratio, hype, and absurd growth assumptions built into the price. I think Nvidia will go down in the history books as one of these absurdly priced companies where countless people lost a sh1t ton of money.

[jagger]

I may be repeating myself but the run up to 1.61 in 2021 was from my personal perspective entirely based on the drop in interest rates and the corresponding rise in property values, almost a no brainer ftom about September 2020. You can see the inverse effect over the last 18 months. I can see the cycle repeating again, maybe not as fast or dramatic but who knows.

It's well known that NZ equities are highly (negatively) correlated to bond yields, specifically the 10 year government bond rate.

I remember a couple of years ago UBS saying the r-squared was something like 60%.
Reason why a lot of the hand-wringing on pages like this about share price movements is total nonsense.

[Azz]

I think you ought to study the history of the stock market. There are endless examples of absurdly priced companies that fool many people into buying due to hype and ignoring fundamentals. Personally I believe (so does Bloomstran - you'd be wise to follow his advice) that Nvidia draws parallels to Microsoft in 1999 with its high P/E ratio, hype, and absurd growth assumptions built into the price. I think Nvidia will go down in the history books as one of these absurdly priced companies where countless people lost a sh1t ton of money.

Here's some history: Idiots said that ("absurdly priced" "hype") about Apple.

Let's see what happens with Nvidia. Let's see what happens to the short sellers. Let's wait and see, shall we. Pretty simple.

[BlackPeter]

wow big dumps going on .......... run for the hills :scared: sailor rob is capitulating

But capitulation would be a reason to buy in, wouldn't it?

[bull....]

But capitulation would be a reason to buy in, wouldn't it?

if your a real value investor you would be buying when you think the cycle of rate rises , inflation and falling house prices are over , neither is certain in this environment. in the mean time all RV companies have stated there margins are under pressure until i imagine the above has well and truely changed direction.

so whats the best time who knows but the more capital you lose and time lost hopeing to value pick a bottom or guess the future is wasted time in my opinion. ill stick to 6% in a bank than guess on these stocks at the moment

[mike2020]

Fair comment. Arv sum rym and even the dreaded kfl up. Oca crapitulates

[ronaldson]

Breakout is definitely to the downside today. Close at $0.71 and virtually no buyers under, with the usual wall of sellers still on hand.

At least the half year to 30 September is now effectively done and dusted, and soon they will have to fess up as to how it was with a meaningful announcement. And could any facilities sales have actually settled at month end for us to know next week? Or is this share on life support like RAD?

[Balance]

From Beagle :

"My view is management were quite positive on sales in the 2022 meeting but both half year and full year sales turned out to be extremely disappointing. At their most recent annual meeting as we all know, there was no mention of sales so reading between the lines they are really struggling this year. It seems the market simply doesn't want their small boutique style village units and prefers the larger full facility village units provided by their competitors. Holding costs for their several years' worth of care suites are really now starting to bite and with 10 year Govt treasuries now at 16 year high's this is only going to get worse in the years ahead.

They must be very close to breeching their debt servicing covenants in terms of cash flow and with the highest gearing in the sector (and probably the weakest sales), I think the chances of a deeply discounted capital raise in the year ahead is looking ominous.

The silence in regard to any announcement on sales success with their 10+ old loss-making care villages that have been on the market for ages now is deafening. Never mind... they are really kicking goals with their carbon reduction so all is forgiven. (sarcasm).

Just as well they have been able to maintain their dividends at 4-5 cents per annum....oh hang on a minute....
I think the chances of there being no dividend at the half year announcement in late November is getting higher...not that anyone in their right mind is holding this for the yield."

[bull....]

From Beagle :

"My view is management were quite positive on sales in the 2022 meeting but both half year and full year sales turned out to be extremely disappointing. At their most recent annual meeting as we all know, there was no mention of sales so reading between the lines they are really struggling this year. It seems the market simply doesn't want their small boutique style village units and prefers the larger full facility village units provided by their competitors. Holding costs for their several years' worth of care suites are really now starting to bite and with 10 year Govt treasuries now at 16 year high's this is only going to get worse in the years ahead.

They must be very close to breeching their debt servicing covenants in terms of cash flow and with the highest gearing in the sector (and probably the weakest sales), I think the chances of a deeply discounted capital raise in the year ahead is looking ominous.

The silence in regard to any announcement on sales success with their 10+ old loss-making care villages that have been on the market for ages now is deafening. Never mind... they are really kicking goals with their carbon reduction so all is forgiven. (sarcasm).

Just as well they have been able to maintain their dividends at 4-5 cents per annum....oh hang on a minute....
I think the chances of there being no dividend at the half year announcement in late November is getting higher...not that anyone in their right mind is holding this for the yield."

is that the same beagle who said the stock was going to $2 lol

anyway got the breakout from the 2 mth old range of 74 - 79 does that imply 69 based on range theory ? test the lows ?

[mike2020]

So who is actually buying? That is pretty reasonable volume.

[winner69]

Share price was in mid 60’s in March so today not too bad

Let’s blame end of quarter rebalancing eh

[winner69]

Hey Ronaldson, seeing Brent silent on sales update we can always draw a line through SUM Q3 sales ( to be announced very soon) to get an idea how Oceania are going.

Mind you SUM Q2 new sales weren’t too flash but resales were pretty robust.

ARV gave a sales update in their Investor News first week October last year ……maybe we’ll hear from them as well

[Greekwatchdog]

Hey Ronaldson, seeing Brent silent on sales update we can always draw a line through SUM Q3 sales ( to be announced very soon) to get an idea how Oceania are going.

Mind you SUM Q2 new sales weren’t too flash but resales were pretty robust.

ARV gave a sales update in their Investor News first week October last year ……maybe we’ll hear from them as well

Hey W69, Brent might surprise us and give us an update. Need Tui's me thinks.

[winner69]

Hey W69, Brent might surprise us and give us an update. Need Tui's me thinks.


Jeez could be busy week digesting all the upcoming news

[ValueNZ]

From Beagle :

"My view is management were quite positive on sales in the 2022 meeting but both half year and full year sales turned out to be extremely disappointing. At their most recent annual meeting as we all know, there was no mention of sales so reading between the lines they are really struggling this year. It seems the market simply doesn't want their small boutique style village units and prefers the larger full facility village units provided by their competitors. Holding costs for their several years' worth of care suites are really now starting to bite and with 10 year Govt treasuries now at 16 year high's this is only going to get worse in the years ahead.

They must be very close to breeching their debt servicing covenants in terms of cash flow and with the highest gearing in the sector (and probably the weakest sales), I think the chances of a deeply discounted capital raise in the year ahead is looking ominous.

The silence in regard to any announcement on sales success with their 10+ old loss-making care villages that have been on the market for ages now is deafening. Never mind... they are really kicking goals with their carbon reduction so all is forgiven. (sarcasm).

Just as well they have been able to maintain their dividends at 4-5 cents per annum....oh hang on a minute....
I think the chances of there being no dividend at the half year announcement in late November is getting higher...not that anyone in their right mind is holding this for the yield."
These are the debt servicing covenants found in the annual report which Beagle mentions

The financial covenants in the Group’s senior debt facilities, with which the Group mustcomply include:
a) Interest Cover Ratio - the ratio of Adjusted EBITDA to Net Interest Charges, where interestcharges relates to the interest and commitment fees in relation to the General CorporateFacility and retail bonds, is not less than 2.0x;
b) Loan to Value Ratio – the ratio of total bank and retail bonds indebtedness shall not exceed50% of the total property value of all Group’s properties (including the “as-complete” valuationsfor projects funded under the Development Facility); and
c) Guarantor Group Coverage – at all times the Adjusted EBITDA of the Guaranteeing Groupmust be at least 90% of the Adjusted EBITDA of the total tangible assets of the Group; and
d) Development – at all times the outstanding principal amount under the Development Facilityshall not exceed the Development Value. Development Value (per the most recent valuationexcluding any settled stock) is the aggregate value of all Residential Facilities in all Developmentsthat are being funded by the Development Facility less their cost to complete.

I think Beagle is referring to A) here. As of the last annual report the interest cover stands at 80,000 / (13,680 + 6,175) = 4.02 so double the requirement, with bank debt and bonds being fixed. So what Beagle is talking about is essentially halving of EBITDA over the next year which doesn't seem all that likely to me.

I seriously doubt Oceania would choose to capital raise at these prices considering management own significant amounts of shares, as opposed to selling down assets. If they were to CR at these low prices that would put the competency of management into question in my mind.

So overall I see a capital raise in the next year to be very unlikely, to back this up this is what management had to say about a capital raise in their AGM shareholders questions document (https://images.oceaniahealthcare.co.nz/wp-content/uploads/2023/08/19090256/Annual-Shareholders-Meeting-QA.pdf).

Question 11: Is Oceania planning to do a capital raise to improve its capital structure?
We recognise that balance sheet management is important. Oceania undertook a capital raise in 2021 to fund the acquisition of Waterford and Franklin and subsequent acquisitions have been funded by debt. Oceania has no immediate plans for a capital raise and has sufficient headroom in its banking facilities for growth.

[Maverick]

Wow, go away for a month and look what's happened, Sailor Rob banned, OCA 71c and Winston Peters back from the dead…..not sure which one of those to be more surprised at.

On the plus side, I had plenty of time to revisit things away from the noise of the market and am happy to share my OCA thoughts if anyone is interested.

Despite the depressing SP once again in the toilet I can find no reason to reduce my expectations of November UNPAT being up around +25% . This is not only because Helier is selling down , in fact the Helier HY contribution isn't going to be that much now due to its delayed delivery.

These are the current key drivers of growth that are going to support a good result of many more to come;


Govt care fees increased meaningfully half way through HY1 ( detailed on ST in a series of posts a month ago)

DMFs both care and villas just keep rising.

Staffing issues frustrating care occupancy and efficiencies have improved.

Helier started selling down (but that's more important for 2HY and FY25)

Covid costs are done.

Volumes of NZ housing sales are up 20% on last year and lead times are reducing.

Resale volumes are about to get a sizable boost. This is important and takes some explanation so I’ll cover it below.


Less the bad stuff,
1 Helier being delivered 3 months late.(2 months ago)
2 Bellevue Chch being delivered 6 months late (about now)
3 Interest costs up but not too bad due to the prescient bond issue a few years back.

These are all facts that are taken from mainstream sources, other RV reports and OCAs own reports. When I run these adjustments through the spreadsheets I get a really decent 1HY rise to about 10.5cps ( annualized) . Then it just gets better looking ahead.
FYI, I have allowed for no Bellevue sales in this 1HY and only 5 from Helier.

Now to explain point no 6 above , this is important and deserves specific attention just to OCA that resale volumes are about to grow quite strongly and suddenly. This is something I've had a good think about and no one seems to have picked up on. Apartments (OCAs real source of profit growth) churn every 5.5 years. So apartments sold 6 years ago should be reselling now. For example Sands and Meadowbank should now be starting to experience resales. Obviously in reality some stays are shorter and others longer but let's just work with the average. So today's apartment sales should equal new sales 2018 + resales made in 2018. This back tests well, albeit on very limited data. as we can see the start of the uptick in the last result.

This is specific to OCA because 2018 is when they really cranked up and started delivering and selling in large volumes . About 50 extra apartments P/a. This will have the net result of an extra ramping up of apartment resale profit. Due to OCAs sudden start of its new apartment sales in large volumes 6 years ago there will be an equal volume boost ( although a little smoother ) in re-sales profit starting about now. Other RV companies wont have experienced this jump as their deliveries/ new sales have been annually more linear. We can see this effect starting its ascent already in the last result after years of flat volumes. Even though FY 23 sales were tough , the resales still had a meaningful jump for the first time.

Back to the collapsing share price. By my workings it is in complete contrast to the solid fundamentals of the company in play now. I'm confident as you can be in this game that the numbers coming in November will finally at last shine through and do the talking.
While I expect profits up 25% to be well received it isn't likely to set the world on fire in itself. The importance of this result is that it should finally show clearly that the model is working and now well underway.
The market has got this one really wrong.

[winner69]

NZ First going to look after / fix Aged Care Funding

Can’t cost it though because who knows how many will need caring for

[justakiwi]

To be fair, NZF is literally the only party who even mentioned Aged Care. So, while I will not be voting for them, I give them credit for actually recognising our elderly folk, and the crises we are facing.

Is your second sentence based on what NZF has actually "stated" publicly, or is that purely your own commentary?



NZ First going to look after / fix Aged Care Funding

Can’t cost it though because who knows how will need caring for

[winner69]

To be fair, NZF is literally the only party who even mentioned Aged Care. So, while I will not be voting for them, I give them credit for actually recognising our elderly folk, and the crises we are facing.

Is your second sentence based on what NZF has actually "stated" publicly, or is that purely your own commentary?

It’s what Winston said on TV this morning

[justakiwi]

OK, well at least he is being honest.

I emailed both ACT and National a while back and asked them what their policy was on Aged Care. I got nothing. Both responded with general brushing off, of how they need to "fix the economy" first, along with some trite comments to pretend to show they "care." I have zero confidence that either that a NAT/ACT government will do anything whatsoever to address the issues.




It’s what Winston said on TV this morning

[Valuegrowth]

Whoever come to power there are some challenges. Central banks cannot print money continuously. Governments cannot borrow continuously as well. Global debt has reached over 300 trillion. No country can sustain in the long run without having sustainable income. In many countries expenditure is higher than income. So, they cannot reduce income tax. Only option left is borrowing more and more if they don’t have large export market or high-income industries. On top of that inflation and high cost of doing business could slow down growth. Government don’t have better options to control inflation and high cost of doing business, as they are beyond their control. Market forces decide price of everything. Controlling interest rates is also not the best option. Only hope is what goes up beyond their true value (Price) must come down. When that happens, more money will come to consuemer's hand and cost of doing business also will come down. Until then low-income earners and companies with mountain of debt will struggle.


OK, well at least he is being honest.

I emailed both ACT and National a while back and asked them what their policy was on Aged Care. I got nothing. Both responded with general brushing off, of how they need to "fix the economy" first, along with some trite comments to pretend to show they "care." I have zero confidence that either that a NAT/ACT government will do anything whatsoever to address the issues.

[justakiwi]

I get what you are saying, but both Labour and National are to blame for the current Aged Care crisis. They have both buried their heads in the sand, and ignored the warnings from providers, and those working on the ground floor, for at least a decade. God only knows why because anyone with half a brain could see it would come back and bite them on the bum.

Regardless of who wins the election, this is an issue that must be addressed urgently. If they don't have the insight to see that, they will reap what they sow. You think the public health system is overloaded now? Just wait for the pending influx of hospital and dementia level elderly folk, who will turn up on hospital's doorsteps because there is nowhere for them to go.

It is absolutely reprehensible that the situation has been allowed to get to this point. It is not a Labour issue - it is a government​ issue, and both parties are equally to blame.



Whoever come to power there are some challenges. Central banks cannot print money continuously. Governments cannot borrow continuously as well. Global debt has reached over 300 trillion. No country can sustain in the long run without having sustainable income. In many countries expenditure is higher than income. So, they cannot reduce income tax. Only option left is borrowing more and more if they don’t have large export market or high-income industries. On top of that inflation and high cost of doing business could slow down growth. Government don’t have better options to control inflation and high cost of doing business, as they are beyond their control. Market forces decide price of everything. Controlling interest rates is also not the best option. Only hope is what goes up beyond their true value (Price) must come down. When that happens, more money will come to consuemer's hand and cost of doing business also will come down. Until then low-income earners and companies with mountain of debt will struggle.

[Valuegrowth]

I am in the baby boomer group. I can see issues that they are going to face in the coming decades worldwide. Sooner they (Policy makers) make some good viable decisions it will be better for baby boomers.Will global governments have better plan for reducing healthcare cost? It has become unaffordable for many worldwide.

https://www.scripps.org/news_items/5475-top-health-concerns-of-baby-boomers

QUOTE=justakiwi;1023913]I get what you are saying, but both Labour and National are to blame for the current Aged Care crisis. They have both buried their heads in the sand, and ignored the warnings from providers, and those working on the ground floor, for at least a decade. God only knows why because anyone with half a brain could see it would come back and bite them on the bum.

Regardless of who wins the election, this is an issue that must be addressed urgently. If they don't have the insight to see that, they will reap what they sow. You think the public health system is overloaded now? Just wait for the pending influx of hospital and dementia level elderly folk, who will turn up on hospital's doorsteps because there is nowhere for them to go.

It is absolutely reprehensible that the situation has been allowed to get to this point. It is not a Labour issue - it is a government​ issue, and both parties are equally to blame.[/QUOTE]

[Valuegrowth]

Well managed companies in this sector will have some great opportunties.

https://www.miragenews.com/new-zealand-model-could-reform-australias-aged-854982/
https://www.caremanagementmatters.co.uk/aged-care-on-a-global-stage/
https://www.uts.edu.au/news/health-science/fixing-aged-care-crisis-wont-be-easy
https://www.newstalkzb.co.nz/news/national/the-front-page-how-bad-is-the-aged-care-crisis-in-new-zealand/

[ValueNZ]

Wow, go away for a month and look what's happened, Sailor Rob banned, OCA 71c and Winston Peters back from the dead…..not sure which one of those to be more surprised at.

On the plus side, I had plenty of time to revisit things away from the noise of the market and am happy to share my OCA thoughts if anyone is interested.

Despite the depressing SP once again in the toilet I can find no reason to reduce my expectations of November UNPAT being up around +25% . This is not only because Helier is selling down , in fact the Helier HY contribution isn't going to be that much now due to its delayed delivery.

These are the current key drivers of growth that are going to support a good result of many more to come;


Govt care fees increased meaningfully half way through HY1 ( detailed on ST in a series of posts a month ago)
DMFs both care and villas just keep rising.
Staffing issues frustrating care occupancy and efficiencies have improved.
Helier started selling down (but that's more important for 2HY and FY25)
Covid costs are done.
Volumes of NZ housing sales are up 20% on last year and lead times are reducing.
Resale volumes are about to get a sizable boost. This is important and takes some explanation so I’ll cover it below.


Less the bad stuff,
1 Helier being delivered 3 months late.(2 months ago)
2 Bellevue Chch being delivered 6 months late (about now)
3 Interest costs up but not too bad due to the prescient bond issue a few years back.

These are all facts that are taken from mainstream sources, other RV reports and OCAs own reports. When I run these adjustments through the spreadsheets I get a really decent 1HY rise to about 10.5cps ( annualized) . Then it just gets better looking ahead.
FYI, I have allowed for no Bellevue sales in this 1HY and only 5 from Helier.

Now to explain point no 6 above , this is important and deserves specific attention just to OCA that resale volumes are about to grow quite strongly and suddenly. This is something I've had a good think about and no one seems to have picked up on. Apartments (OCAs real source of profit growth) churn every 5.5 years. So apartments sold 6 years ago should be reselling now. For example Sands and Meadowbank should now be starting to experience resales. Obviously in reality some stays are shorter and others longer but let's just work with the average. So today's apartment sales should equal new sales 2018 + resales made in 2018. This back tests well, albeit on very limited data. as we can see the start of the uptick in the last result.

This is specific to OCA because 2018 is when they really cranked up and started delivering and selling in large volumes . About 50 extra apartments P/a. This will have the net result of an extra ramping up of apartment resale profit. Due to OCAs sudden start of its new apartment sales in large volumes 6 years ago there will be an equal volume boost ( although a little smoother ) in re-sales profit starting about now. Other RV companies wont have experienced this jump as their deliveries/ new sales have been annually more linear. We can see this effect starting its ascent already in the last result after years of flat volumes. Even though FY 23 sales were tough , the resales still had a meaningful jump for the first time.

Back to the collapsing share price. By my workings it is in complete contrast to the solid fundamentals of the company in play now. I'm confident as you can be in this game that the numbers coming in November will finally at last shine through and do the talking.
While I expect profits up 25% to be well received it isn't likely to set the world on fire in itself. The importance of this result is that it should finally show clearly that the model is working and now well underway.
The market has got this one really wrong.



Great post Maverick, it'll be interesting to see if you're correct about the resales. Seems plausible to me!

[SailorRob]

Wow, go away for a month and look what's happened, Sailor Rob banned, OCA 71c and Winston Peters back from the dead…..not sure which one of those to be more surprised at.

On the plus side, I had plenty of time to revisit things away from the noise of the market and am happy to share my OCA thoughts if anyone is interested.

Despite the depressing SP once again in the toilet I can find no reason to reduce my expectations of November UNPAT being up around +25% . This is not only because Helier is selling down , in fact the Helier HY contribution isn't going to be that much now due to its delayed delivery.

These are the current key drivers of growth that are going to support a good result of many more to come;


Govt care fees increased meaningfully half way through HY1 ( detailed on ST in a series of posts a month ago)
DMFs both care and villas just keep rising.
Staffing issues frustrating care occupancy and efficiencies have improved.
Helier started selling down (but that's more important for 2HY and FY25)
Covid costs are done.
Volumes of NZ housing sales are up 20% on last year and lead times are reducing.
Resale volumes are about to get a sizable boost. This is important and takes some explanation so I’ll cover it below.


Less the bad stuff,
1 Helier being delivered 3 months late.(2 months ago)
2 Bellevue Chch being delivered 6 months late (about now)
3 Interest costs up but not too bad due to the prescient bond issue a few years back.

These are all facts that are taken from mainstream sources, other RV reports and OCAs own reports. When I run these adjustments through the spreadsheets I get a really decent 1HY rise to about 10.5cps ( annualized) . Then it just gets better looking ahead.
FYI, I have allowed for no Bellevue sales in this 1HY and only 5 from Helier.

Now to explain point no 6 above , this is important and deserves specific attention just to OCA that resale volumes are about to grow quite strongly and suddenly. This is something I've had a good think about and no one seems to have picked up on. Apartments (OCAs real source of profit growth) churn every 5.5 years. So apartments sold 6 years ago should be reselling now. For example Sands and Meadowbank should now be starting to experience resales. Obviously in reality some stays are shorter and others longer but let's just work with the average. So today's apartment sales should equal new sales 2018 + resales made in 2018. This back tests well, albeit on very limited data. as we can see the start of the uptick in the last result.

This is specific to OCA because 2018 is when they really cranked up and started delivering and selling in large volumes . About 50 extra apartments P/a. This will have the net result of an extra ramping up of apartment resale profit. Due to OCAs sudden start of its new apartment sales in large volumes 6 years ago there will be an equal volume boost ( although a little smoother ) in re-sales profit starting about now. Other RV companies wont have experienced this jump as their deliveries/ new sales have been annually more linear. We can see this effect starting its ascent already in the last result after years of flat volumes. Even though FY 23 sales were tough , the resales still had a meaningful jump for the first time.

Back to the collapsing share price. By my workings it is in complete contrast to the solid fundamentals of the company in play now. I'm confident as you can be in this game that the numbers coming in November will finally at last shine through and do the talking.
While I expect profits up 25% to be well received it isn't likely to set the world on fire in itself. The importance of this result is that it should finally show clearly that the model is working and now well underway.
The market has got this one really wrong.





Winnie ain't the only one back from the dead Mav, in saying that... Watch his Jack Tame interview.

Have to again disagree with you with the description of the share price being depressing. The words I would use would be comforting, delighting and encouraging.

Your message highlights two things.

1. Improving fundamentals.

2. Decreasing share price.

This is the most opposite thing to depressing that I am capable of imagining. If the share price had risen over $1 with the things you have highlighted, that would be depressing.

The only way that the decreasing share price could be depressing is if you don't actually believe in what you wrote and are seeing and needing other market participants to prove to you that you are correct by their own actions lifting the price.

There are companies I own where this is the case for me, but all it proves is that I am not confident in my own views on the businesses.

If you are truly confident in a business and your ability to analyse it's future then the depths of the toilet is the place you want to be.

[kiora]

Others agree
https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/finances/

[bull....]

Wow, go away for a month and look what's happened, Sailor Rob banned, OCA 71c and Winston Peters back from the dead…..not sure which one of those to be more surprised at.

On the plus side, I had plenty of time to revisit things away from the noise of the market and am happy to share my OCA thoughts if anyone is interested.

Despite the depressing SP once again in the toilet I can find no reason to reduce my expectations of November UNPAT being up around +25% . This is not only because Helier is selling down , in fact the Helier HY contribution isn't going to be that much now due to its delayed delivery.

These are the current key drivers of growth that are going to support a good result of many more to come;


Govt care fees increased meaningfully half way through HY1 ( detailed on ST in a series of posts a month ago)
DMFs both care and villas just keep rising.
Staffing issues frustrating care occupancy and efficiencies have improved.
Helier started selling down (but that's more important for 2HY and FY25)
Covid costs are done.
Volumes of NZ housing sales are up 20% on last year and lead times are reducing.
Resale volumes are about to get a sizable boost. This is important and takes some explanation so I’ll cover it below.


Less the bad stuff,
1 Helier being delivered 3 months late.(2 months ago)
2 Bellevue Chch being delivered 6 months late (about now)
3 Interest costs up but not too bad due to the prescient bond issue a few years back.

These are all facts that are taken from mainstream sources, other RV reports and OCAs own reports. When I run these adjustments through the spreadsheets I get a really decent 1HY rise to about 10.5cps ( annualized) . Then it just gets better looking ahead.
FYI, I have allowed for no Bellevue sales in this 1HY and only 5 from Helier.

Now to explain point no 6 above , this is important and deserves specific attention just to OCA that resale volumes are about to grow quite strongly and suddenly. This is something I've had a good think about and no one seems to have picked up on. Apartments (OCAs real source of profit growth) churn every 5.5 years. So apartments sold 6 years ago should be reselling now. For example Sands and Meadowbank should now be starting to experience resales. Obviously in reality some stays are shorter and others longer but let's just work with the average. So today's apartment sales should equal new sales 2018 + resales made in 2018. This back tests well, albeit on very limited data. as we can see the start of the uptick in the last result.

This is specific to OCA because 2018 is when they really cranked up and started delivering and selling in large volumes . About 50 extra apartments P/a. This will have the net result of an extra ramping up of apartment resale profit. Due to OCAs sudden start of its new apartment sales in large volumes 6 years ago there will be an equal volume boost ( although a little smoother ) in re-sales profit starting about now. Other RV companies wont have experienced this jump as their deliveries/ new sales have been annually more linear. We can see this effect starting its ascent already in the last result after years of flat volumes. Even though FY 23 sales were tough , the resales still had a meaningful jump for the first time.

Back to the collapsing share price. By my workings it is in complete contrast to the solid fundamentals of the company in play now. I'm confident as you can be in this game that the numbers coming in November will finally at last shine through and do the talking.
While I expect profits up 25% to be well received it isn't likely to set the world on fire in itself. The importance of this result is that it should finally show clearly that the model is working and now well underway.
The market has got this one really wrong.




does your analysis take into account new sales declining ? re-sales are keeping these RV companies above water and agree re-sales will continue strong
house market bottoming is not confirmed , just today

NZ housing: Average asking price drops, record low new listings in nine regions
https://www.newshub.co.nz/home/money/2023/10/nz-housing-average-asking-price-drops-record-low-new-listings-in-nine-regions.html

interest rates are most likely to continue up in november putting further pressure on the housing market
kiainga roa has run out of money to give to first home buyers in one of there schemes
inflationary cost increases are still likely to continue due to deisel prices being up 30% in last couple mths so all the care fees increases are still likely to be all swallowed up by this as everyone keeps raising prices some

at the end of the day re-sales are keeping these outfit's going during these tough times

[Lego_Man]

High volume 2 day idiosyncratic decline - unfortunately price is telling us something, this is heading back to the lows.

[mike2020]

High volume 2 day idiosyncratic decline - unfortunately price is telling us something, this is heading back to the lows.
Looks like support forming at 71

[justakiwi]

Winston has provided some more detail today:

​It would take steps to increase the number of residential care beds. New Zealand would need about 78,000 such beds by 2040, but on current progress just 33,000 would be available, NZ First said. If nothing was done, it would place impossible strain on the public health system.

The party's policy included funding 2000 new standard residential care bedsover the next term of Parliament. It would also begin to address standard bed residential care support to providers by indexing it to inflation.

[SailorRob]

High volume 2 day idiosyncratic decline - unfortunately price is telling us something, this is heading back to the lows.

The ability to forecast future prices based on volume idiosyncratic metrics is certainly a powerful ability.

Using these skills you will power on up the NZ rich list.

Unfortunately for me I have no idea whether this is heading back to new lows or not.

[winner69]

Looks like support forming at 71

I think bull said price might now range trade between 69 and 74 for a while (v the 74 to 79 that lasted a while)

Why, that’s how TA often works out

[SailorRob]

I think bull said price might now range trade between 69 and 74 for a while (v the 74 to 79 that lasted a while)

Why, that’s how TA often works out

Thanks Winner.

[bull....]

of course the term premium must affect stock like these

[Maverick]

does your analysis take into account new sales declining ? re-sales are keeping these RV companies above water and agree re-sales will continue strong
house market bottoming is not confirmed , just today........


Hi Bull , sorry for my late reply,
NO …I definitely expect new sales to be up , if they weren't I'd be very concerned.

National house sales are up 20% so no reason to think retirees moving around isn't part of that.

Couple of things in OCA`s favour this time;
They have plenty of unsold stock and their regional spread is pretty good. Julian Cook from SUM once said "it takes a long time for a community to digest a new delivery" so having multiple sites around being absorbed into suburbs is better than having only 1 or 2 large blocks.

They also have these deliveries now being sold down at various stages. So while Hellier starts its slow grind up in sales ( they are always slow at the beginning as the community vibe hasn't yet developed ) while others are starting to hum along now such as Awatere which had a very disappointing start.

As you would expect, I've accumulated good data and learnings now to draw on and have come up with sales of 36 this HY.
Without doing any work yourself and only using your personal vibe of the NZ market and the graph below, let me know if 35-40 new sales doesn't seem reasonable to you.

Graph . red = deliveries , Blue =new sales 1hy24 and 2hy24 are my forecasts.
https://lh4.googleusercontent.com/saSUbSilglTrWYi2-xPz5mz1ZKm3FNhvQg6u-6IvdCkBv2jPOTHChcQG8Ua_D21MCw65-iCTWRuKSS6WZIEZgehpMJCb8xfp3J3U-tJlEgjcKfOPWQB2v9R9-YT6BhYeqtupTcog8K7K0OHdv3A9mDk

[winner69]

Mav .. my numbers from REINZ sales volumes data have total sales for Apr/July period only up 2% v last year …your 20% seems pretty high to me. Maybe some localised data?

Apr/Jun sales were basically flat and Summerset new sales in that quarter weren’t too flash ..like up a few

Current quarter looking stronger with July/August volumes up 5% on last year ….be interesting to see whether this indicates Summerset reporting better numbers for Q3 (coming any day)


Whatever things looking better than earlier in year

Probably have to wait until late next month to see how Oceania have gone but Summerset report could be a good indicator

[Valuegrowth]

5 year average earnings give better picture than quartely earnings. Future earnings are more important than past earnings and current earnings. Can we expect growing earnings for the next five years at least. High inflation situation and high rates are not going to change anytime soon. Cost of doing business is also not going to go down in the near future.

[BlackPeter]

5 year average earnings give better picture than quartely earnings. Future earnings are more important than past earnings and current earnings. Can we expect growing earnings for the next five years at least. High inflation situation and high rates are not going to change anytime soon. Cost of doing business is also not going to go down in the near future.

Yes and no. House prices seem to be on the rise again (though so far only moderate). As we all know - rising real estate prices are good for retirement villages (for all of them, not just OCA). Interest rates might hang around for another couple of years, but inflation appears to drop already now here as well as in other parts of the globe, so - not quite sure about your concerns in a 5 years scenario?

[Maverick]

Mav .. my numbers from NZIER sales volumes data have total sales for Apr/July period only up 2% v last year …your 20% seems pretty high to me. Maybe some localised data?

Apr/Jun sales were basically flat and Summerset new sales in that quarter weren’t too flash ..like up a few

Current quarter looking stronger with July/August volumes up 5% on last year ….be interesting to see whether this indicates Summerset reporting better numbers for Q3 (coming any day)


Whatever things looking better than earlier in year

Probably have to wait until late next month to see how Oceania have gone but Summerset report could be a good indicator
Hey Winner, you`re really are good at this stuff and I appreciate the feedback,

I recalled from memory somewhere amongst the sea of property statistics the 20% rise so after your post I double checked.
Stats NZ have the Q2 up 23% from Q1 as per chart below but otherwise it looks in line with last year as you rightly point out. I guess the good news is that the cratering of sales Q1 has recovered. The terrible Q1 sales clearly had a huge effect on OCAs sales FY23 ( and other operators ).
Q3 isn't out yet but I expect from general media that it will be similar or slightly better than Q2.( Also as per your figures of July August being up 5% )

You're bang on the money that SUMs next update will be telling, looking forward to that. Last result for them was slow but that was due to stock levels and delivery timings.

None of this alters my 36 sales forecast though as it is calculated on more specific things. I've developed a whole lot of rules and applied them to each specific village to get the total. It works out good enough anyway.

Cheers for your comments.

https://lh3.googleusercontent.com/LXdlv2FwYX05yNTn6lpBYl9Z4QcqK2r1F_iMSNNBLDeoKWxThX _rBuO8J5zE82PlXJ4Irc0iRBGfiBZyT6ohBNFcu5Ji95-tp-cXKwbWGISolWADBD94bUvwx_DvmdnRVoaXT75CdSZxUEVFewU4 ZKk

[Daytr]

Hey Winner, you`re really are good at this stuff and I appreciate the feedback,

I recalled from memory somewhere amongst the sea of property statistics the 20% rise so after your post I double checked.
Stats NZ have the Q2 up 23% from Q1 as per chart below but otherwise it looks in line with last year as you rightly point out. I guess the good news is that the cratering of sales Q1 has recovered. The terrible Q1 sales clearly had a huge effect on OCAs sales FY23 ( and other operators ).
Q3 isn't out yet but I expect from general media that it will be similar or slightly better than Q2.( Also as per your figures of July August being up 5% )

You're bang on the money that SUMs next update will be telling, looking forward to that. Last result for them was slow but that was due to stock levels and delivery timings.

None of this alters my 36 sales forecast though as it is calculated on more specific things. I've developed a whole lot of rules and applied them to each specific village to get the total. It works out good enough anyway.

Cheers for your comments.

https://lh3.googleusercontent.com/LXdlv2FwYX05yNTn6lpBYl9Z4QcqK2r1F_iMSNNBLDeoKWxThX _rBuO8J5zE82PlXJ4Irc0iRBGfiBZyT6ohBNFcu5Ji95-tp-cXKwbWGISolWADBD94bUvwx_DvmdnRVoaXT75CdSZxUEVFewU4 ZKk


Guys these are the figures from REINZ's August report. The September report should be out in the next week.

"Compared to August 2022, August 2023 saw an increase in the total number of properties sold across New Zealand, up 9.2% to 5,509, from 5,047, and up 9.2% month-on-month. For New Zealand excluding Auckland, sales counts also increased by 5.2% year-on-year from 3,508 to 3,690.At the end of August, the total number of properties for sale across New Zealand was 22,750, down 10.6% (2,691 properties) from 25,441 year-on-year, and down 1.5% month-on-month. New Zealand excluding Auckland inventory was down year-on-year from 15,196 to 14,099, a decrease of 1,097 properties or 7.5% annually."

[winner69]

Yes Mav 35 new apartment sales in H1 good compared to 28 last year ….but wouldn’t it be cool if they did 44 like 2 years ago

[Maverick]

Ok Winner, just for fun I did some more math's on new apartment sales. Blending the NZ statistic housing data with sales and stock levels over the last 5 years...

These are my simplified observations;

OCA used to sell 40% of available stock (HY) in a medium to red hot property market. Full delivery sell down takes 1.25 yrs
OCA used to sell 30% of available stock (HY) in a cooling and reversing property market. Full delivery sell down takes 1.6 yrs
OCA just sold 20% of available stock (HY) in the worst property market in 15 yrs. Full delivery sell down takes 2.5 yrs

I would call this market a slowly warming property market which to me suggest sales of 25% ( that's 42 sales compared to my expected 36)

Should they achieve 25% sales of empty stock this HY then that's an extra Unpat 0.6c cps (annualized) to my hopes of 10.5c eps
Your dreamy 44 sales would require them to sell 26% so your tongue and check comment is not at all far fetched. That's an extra 0.9cps.

So whatever November may bring, while my predictions certainly wont be perfect , it is very very hard to see how OCA will disappoint.

Anyway , today has all got far too technical, I've enjoyed digging around the sales stats but I really do have to get the vege garden sorted now.

[Snow Leopard]

....it is very very hard to see how OCA will disappoint...

Yes, they usually disappoint in unexpected ways :p

Disc: Still hold, but I don't know why.

[Rawz]

Disc: Still hold, but I don't know why.

Me too lol. Maybe a few like that

[ValueNZ]

Yes, they usually disappoint in unexpected ways :p

Disc: Still hold, but I don't know why.
I'll give you a hint as to why I hold OCA. It has to do with their billion dollars in interest free non callable loan (increasing at ~20% CAGR), another half billion in low interest loans which average well below inflation, and billion dollars in equity all currently being traded on the market for $520 million.

But feel free to sell this $2.5 billion investment vehicle for $520 million, I certainly wont object.

[winner69]

Me too lol. Maybe a few like that

The loyalty of long term Oceania fans match the loyalty of the Warriors fans …….next year ‘its our year’

[Bjauck]

BP provides useful information and analysis. Perhaps reflected in his reputation. If you have disagreements, beware of throwing the baby out with the bathwater!

[winner69]

The number of resales is key to how good or bad the the half year result is going to be …good margins on resales these days as most would have been last bought when prices were a lot lower than now

[mike2020]

Can't someone just email and ask? All this speculation is killing me.

[Maverick]

Can't someone just email and ask? All this speculation is killing me.
Wouldn’t that be nice…but alas they don’t give out stuff like that .
Something to do with not letting out info unless everybody gets a fair suck of the sav.

Thats something I think we all really like about SUM and ARV . Their public updates. It is adequate however these days, to overlay their experiences onto OCA.

[mike2020]

Yeah I know. I do appreciate the insight given. Thanks.

[winner69]

Yeah I know. I do appreciate the insight given. Thanks.

Don’t fret Mike ….no news is good news …it’ll all be fine on the day

[ronaldson]

Just a reminder to everyone that OCA's Annual Report for FY23 contains the following :-

"On 9 May 2023 the Group entered into a sale and purchase agreement with a third party in respect of two sites held for sale, conditional upon Te Whatu Ora approval. The carrying amount of these sites as at 31 March 2023 is $10.2m and the transaction is expected to settle in August 2023."

The implication is that the transaction was an unconditional one, except for approval of the incoming operator as suitable to own and manage the facilities. This would appear to be a straightforward issue so it is surprising that holders continue to await an update outcome for the transaction, and to learn whether the transaction is at a gain or a loss to the carry value in OCA's books which in my view has implications for the underpinning or not of the carry value attributed to other like facilities held by OCA and other listed operators given the dearth of current transactional evidence available to valuers in this context.

These transactions are always announced upon completion even if not truly material, given the public nature of transitioning residents/occupiers (and usually staff) to another operator.

So no news at present is an unusual circumstance just now. Whereas some form of market update as to sales/resales for the half year just expired could not really be anticipated for a while and perhaps only accompanying the November announcement.

[BlackPeter]

Wouldn’t that be nice…but alas they don’t give out stuff like that .
Something to do with not letting out info unless everybody gets a fair suck of the sav.

Thats something I think we all really like about SUM and ARV . Their public updates. It is adequate however these days, to overlay their experiences onto OCA.

Agree - but still wondering whether we should gang together and tell the board at some stage what we think about their attitude to keep shareholders in the dark. Maybe we need as well to start raising that at AGM's and only confirm directors who acknowledged the problems and promised to do something about it.

Admittedly - I should have thought about that earlier, but hey - next year is another AGM :) ;

[winner69]

Generally need to keep things close to one’s chest when sorting out details of an impending capital raise

[winner69]

Here's my version of sales trends .....Mav's showed half yearly numbers amd mine shows annual numbers (rolling 2 half years) ..... I think it is less 'lumpy' and shows trends more clearly

Come next report we do really need to see the lines going up again eh

[winner69]

For those interested here's how the number of property sales are trending

Numbers still way below last year ..... annual sales to August 17% less than a year ago ..... but trend is starting to look better

Be good when we get back to pre-pandemic levels eh

[BlackPeter]

For those interested here's how the number of property sales are trending

Numbers still way below last year ..... annual sales to August 17% less than a year ago ..... but trend is starting to look better

Be good when we get back to pre-pandemic levels eh

... and there even seems to be a correlation between OCA new sales (2 posts above) and REINZ number of property sales (directly above).

Given that latter is already rising - hey, this sounds promising for OCA, doesn't it? No need anymore to worry about all these unsold appartments ;) ;

[winner69]

... and there even seems to be a correlation between OCA new sales (2 posts above) and REINZ number of property sales (directly above).

Given that latter is already rising - hey, this sounds promising for OCA, doesn't it? No need anymore to worry about all these unsold appartments ;) ;

Looking good for 2024 ……might be that ‘it’s our year’ after all ….but destiny suggests otherwise

[BlackPeter]

Looking good for 2024 ……might be that ‘it’s our year’ after all ….but destiny suggests otherwise

Destiny suggests? I couldn't care less what the self appointed bishop suggests. Do you ? ;)

[winner69]

As at March 31 2023 -

Debt $554m
Equity $962m
Gearing / Debt Ratio 36.6%

That gearing of 36.6% was a lot higher than the 28.6% reported year prior. It is now the highest in the sector.

No doubt debt has increased in H124 …probably at a greater rate than what equity has so expect gearing to be higher as at September ….hope it’s not above 40% …that would be pretty bad.

I’ve assumed the touted disposal sales haven’t bought in much if anything …at least not $100m but then they need to repay a lot of that to residents ( think accounts said assets held for sale ~$100m / residents loans on assets held for sale ~$50m)

Interesting half year results coming up

[Rawz]

One of my rules of investing is to not have money in a company with over 40% gearing.

[Muse]

One of my rules of investing is to not have money in a company with over 40% gearing.

Dont look at your HMY investments gearing then lol

[SailorRob]

One of my rules of investing is to not have money in a company with over 40% gearing.


ValueNZ, as a learning exercise for you or a teaching exercise for others, point out for me 3 or 4 of the major flaws in this statement.

[BlackPeter]

One of my rules of investing is to not have money in a company with over 40% gearing.

Let me guess - you never owned a bank ;) ;

I think you would need to put some more rules around this rule (dependent on industry, cashflow and similar) to make it useful, but for most industries 40% gearing is nothing.

And hey - OCA doesn't even have to pay interests for some of their debts.

[Muse]

ValueNZ, as a learning exercise for you or a teaching exercise for others, point out for me 3 or 4 of the major flaws in this statement.

I think Rawz was being tongue in cheek

[Baa_Baa]

The new stage of village living at The Bellevue in Christchurch opened today.

[Valuegrowth]

Yes and no. I agree it's highly risky to invest in high leverage companies. After my bad experience I prefer to go with strong balance sheets. However, it depends on the management and type of business. Those who make use of leverage wisely could generate above average income in the long run.

[QUOTE=Rawz;1025107]One of my rules of investing is to not have money in a company w]
ith over 40% gearing.[/QUOTE

[Rawz]

The thing with the 40% rule, aside from the extra risk, is it limits the returns you can get.

For example look at RBD…they have used crap loads of debt to buy earnings per share in the USA and Aus via taking over restaurants. they can’t do this again for a very long time. They need to pay down debt and grow out of it. This often puts dividends at risk or kills them.

Or NZL.. since listing they highlight the CAGR of their AFFO which is impressive but they won’t be able to maintain it because the land purchase needs to slow as they have already loaded the balance sheet up.

In the tough times the SP gets punished and if earnings slip you are up for a cap raise at the wrong time devastating shareholder value aka RYM.

Exclude financials and possibly less risk for utilities but still they can’t grow as fast if they have already used all the leverage available.

Some exceptions to the rule but it’s a red flag for me always and something I look at

[Baa_Baa]

The thing with the 40% rule, aside from the extra risk, is it limits the returns you can get.

For example look at RBD…they have used crap loads of debt to buy earnings per share in the USA and Aus via taking over restaurants. they can’t do this again for a very long time. They need to pay down debt and grow out of it. This often puts dividends at risk or kills them.

Or NZL.. since listing they highlight the CAGR of their AFFO which is impressive but they won’t be able to maintain it because the land purchase needs to slow as they have already loaded the balance sheet up.

In the tough times the SP gets punished and if earnings slip you are up for a cap raise at the wrong time devastating shareholder value aka RYM.

Exclude financials and possibly less risk for utilities but still they can’t grow as fast if they have already used all the leverage available.

Some exceptions to the rule but it’s a red flag for me always and something I look at

Generically that's probably true, but as per a couple of questions earlier, how does that relate to OCA's debt? All the RV's are within a few %debt of each other (aside from the no-interest debt to residents). They are all property development companies, they all leverage debt to fund that. OCA's interest rates on bank debt is very low compared to new debt at current market rates and will be for some time to come.

I don't think your blanket rule of thumb, >40% debt = bad, is particularly relevant to RV's or OCA. We might find out for example that the assets sales are/have happened and returns applied to reducing debt. Or plowed into development (growth), as the interest rates are still very low for quite some time. We won't know until reporting, which is close by.

IMO there's more important things to be concerned about than a debt ceiling, for example as others have said, what we're really looking for is an uptick in sales, particularly new sales. These generate revenue which can also be applied to reducing debt, if that is the priority of the company.

I have zero concern for OCA's bank debt at the moment.

[Rawz]

Generically that's probably true, but as per a couple of questions earlier, how does that relate to OCA's debt? All the RV's are within a few %debt of each other (aside from the no-interest debt to residents). They are all property development companies, they all leverage debt to fund that. OCA's interest rates on bank debt is very low compared to new debt at current market rates and will be for some time to come.

I don't think your blanket rule of thumb, >40% debt = bad, is particularly relevant to RV's or OCA. We might find out for example that the assets sales are/have happened and returns applied to reducing debt. Or plowed into development (growth), as the interest rates are still very low for quite some time. We won't know until reporting, which is close by.

IMO there's more important things to be concerned about than a debt ceiling, for example as others have said, what we're really looking for is an uptick in sales, particularly new sales. These generate revenue which can also be applied to reducing debt, if that is the priority of the company.

I have zero concern for OCA's bank debt at the moment.

How much more growth can OCA get via increased leverage right now?

None

[SailorRob]

How much more growth can OCA get via increased leverage right now?

None


Incorrect.

It all will be.

The response you posted regarding the 40% rule wasn't at all what I was getting at.

[Rawz]

Incorrect.

It all will be.

The response you posted regarding the 40% rule wasn't at all what I was getting at.
Not sure what your post means? It all will be??

Imagine how much prime real estate OCA could buy right now at dirt cheap prices if their balance sheet could handle it. It’s a missed opportunity.

Anyways, you can get great returns via P/E expansion and leverage expansion. Like 2CC has moved from a forward PE multiple of 3 to 8. And now can grow using debt and pay fat dividends along the way. It’s perfect.

[SailorRob]

Not sure what your post means? It all will be??

Imagine how much prime real estate OCA could buy right now at dirt cheap prices if their balance sheet could handle it. It’s a missed opportunity.

Anyways, you can get great returns via P/E expansion and leverage expansion. Like 2CC has moved from a forward PE multiple of 3 to 8. And now can grow using debt and pay fat dividends along the way. It’s perfect.

Sorry, I see what you're saying, 'right now'. Yes you're right. I meant over time their growth will be all funded with other peoples money.

[winner69]

Solid Q3 sales numbers from Summerset reported today

APR/Sept (OCA first half) sales up 18% …..if Oceania do this as well it’ll blow all forecasts out of the water

[Daytr]

The thing with the 40% rule, aside from the extra risk, is it limits the returns you can get.

For example look at RBD…they have used crap loads of debt to buy earnings per share in the USA and Aus via taking over restaurants. they can’t do this again for a very long time. They need to pay down debt and grow out of it. This often puts dividends at risk or kills them.

Or NZL.. since listing they highlight the CAGR of their AFFO which is impressive but they won’t be able to maintain it because the land purchase needs to slow as they have already loaded the balance sheet up.

In the tough times the SP gets punished and if earnings slip you are up for a cap raise at the wrong time devastating shareholder value aka RYM.

Exclude financials and possibly less risk for utilities but still they can’t grow as fast if they have already used all the leverage available.

Some exceptions to the rule but it’s a red flag for me always and something I look at

Hey Rawz, a lot will depend on how OCAs debt is structured. Are interest rates fixed and maturities spread out over time etc.

During the GFC many companies had so called manageable debt but went broke as they had all or a high proportion of their debt rolling short term as they were playing the yield curve to sane in interest costs.
The problem came when the banks refused to roll their debt during the short term credit crunch.

I don't follow OCA, so a question.
Have they written down their property assets in the last 18 months or so as property prices were in decline?
And if so, is there likely to be a write back?

[mike2020]

They were disappointingly slow to follow asset prices up last time we had a rise and any write downs were probably from an already conservative starting point. I only see it as undervalued asset wise.

[Antipodean]

Oceania healthcare limited annual shareholders meeting – 25 august 2023 - responses to shareholder questions [Question 14]


over 90% of total assets at 31 march 2023 are property assets carried at fair value as assessed by cbre limited and colliers limited as independent valuers. Colliers limited was also engaged to perform a review of the cbre limited valuation of certain sites in the portfolio comprising 38.1% of the total value of property assets. The review supported the cbre limited valuation.

[ValueNZ]

If anything Oceania Healthcare should have taken on more debt whilst terms were so favourable. I think the gearing ratio is a bit irrelevant in this case because it doesn't take into consideration the occupational rights agreements which is just as good as equity.

A fairer representation would be net bank debt/net bank debt+equity+occupational rights agreements+deferred management fees, which is 555/(555+962+880+45) = 23%

23% is very conservative.

[ValueNZ]

The thing with the 40% rule, aside from the extra risk, is it limits the returns you can get.

For example look at RBD…they have used crap loads of debt to buy earnings per share in the USA and Aus via taking over restaurants. they can’t do this again for a very long time. They need to pay down debt and grow out of it. This often puts dividends at risk or kills them.

Or NZL.. since listing they highlight the CAGR of their AFFO which is impressive but they won’t be able to maintain it because the land purchase needs to slow as they have already loaded the balance sheet up.

In the tough times the SP gets punished and if earnings slip you are up for a cap raise at the wrong time devastating shareholder value aka RYM.

Exclude financials and possibly less risk for utilities but still they can’t grow as fast if they have already used all the leverage available.

Some exceptions to the rule but it’s a red flag for me always and something I look at
Time to rethink risk. Taking on more debt doesn't automatically mean extra risk, it is highly dependent on the terms of the debt. A blanket 40% rule makes no sense.

Here is an extract from the Q3 Vltava Fund letter which discusses risk.
"Suppose your investment objective is to beat inflation over the long term. This is a perfectly realistic and reasonable goal in practice – to strive to increase the real value of your investments. What will be the source of risk for you in this case? The risk will be something that will threaten or even prevent you from achieving this goal. If you base your investments on holding cash, you will achieve the lowest possible volatility. According to standard financial theory, your portfolio will therefore have minimal risk. In practice, however, this will ensure that you will never achieve your investment goal of real appreciation, because the real value of money declines over time. Cash therefore represents the greatest risk in terms of the probability of achieving your investment goal. As Warren Buffett says, stocks are more volatile than cash or bonds, but they are safer in the long run."

My investment goal is to produce a return that beats the SP500 over a long period of time. I believe that OCA taking on more debt decreases risk in my opinion, as the likelihood that I make a return that outperforms the SP500 over the long term increases. For example, OCA being able to significantly grow it's occupational rights agreements in the future, say 20% CAGR, then OCA will be able to leverage this debt which is interest-free, non-callable, and shouldn't ever decrease significantly over any short timeframe.

The same goes for Oceania's bank/bond debt which is ultra cheap, and the bank debt is set to refinance 5 years from now. More of this debt would be a good thing.

[Rawz]

Time to rethink risk. Taking on more debt doesn't automatically mean extra risk, it is highly dependent on the terms of the debt. A blanket 40% rule makes no sense.

Here is an extract from the Q3 Vltava Fund letter which discusses risk.
"Suppose your investment objective is to beat inflation over the long term. This is a perfectly realistic and reasonable goal in practice – to strive to increase the real value of your investments. What will be the source of risk for you in this case? The risk will be something that will threaten or even prevent you from achieving this goal. If you base your investments on holding cash, you will achieve the lowest possible volatility. According to standard financial theory, your portfolio will therefore have minimal risk. In practice, however, this will ensure that you will never achieve your investment goal of real appreciation, because the real value of money declines over time. Cash therefore represents the greatest risk in terms of the probability of achieving your investment goal. As Warren Buffett says, stocks are more volatile than cash or bonds, but they are safer in the long run."

My investment goal is to produce a return that beats the SP500 over a long period of time. I believe that OCA taking on more debt decreases risk in my opinion, as the likelihood that I make a return that outperforms the SP500 over the long term increases. For example, OCA being able to significantly grow it's occupational rights agreements in the future, say 20% CAGR, then OCA will be able to leverage this debt which is interest-free, non-callable, and shouldn't ever decrease significantly over any short timeframe.

The same goes for Oceania's bank/bond debt which is ultra cheap, and the bank debt is set to refinance 5 years from now. More of this debt would be a good thing.

wish you all the best

[Fortunecookie]

Debt can make you rich or destroy you. You got to know when to load up on it. Unfortunately I am not person lol.

[winner69]

Arvida update not that flash ….looks like underlying profit going to be down on last year

Some say Oceania perform more like Arvida than Summerset

Let’s hope that not the case this year ….know more late next month

[Bjauck]

Time to rethink risk. Taking on more debt doesn't automatically mean extra risk, it is highly dependent on the terms of the debt. A blanket 40% rule makes no sense.

Here is an extract from the Q3 Vltava Fund letter which discusses risk.
"Suppose your investment objective is to beat inflation over the long term. This is a perfectly realistic and reasonable goal in practice – to strive to increase the real value of your investments. What will be the source of risk for you in this case? The risk will be something that will threaten or even prevent you from achieving this goal. If you base your investments on holding cash, you will achieve the lowest possible volatility. According to standard financial theory, your portfolio will therefore have minimal risk. In practice, however, this will ensure that you will never achieve your investment goal of real appreciation, because the real value of money declines over time. Cash therefore represents the greatest risk in terms of the probability of achieving your investment goal. As Warren Buffett says, stocks are more volatile than cash or bonds, but they are safer in the long run."

My investment goal is to produce a return that beats the SP500 over a long period of time. I believe that OCA taking on more debt decreases risk in my opinion, as the likelihood that I make a return that outperforms the SP500 over the long term increases. For example, OCA being able to significantly grow it's occupational rights agreements in the future, say 20% CAGR, then OCA will be able to leverage this debt which is interest-free, non-callable, and shouldn't ever decrease significantly over any short timeframe.

The same goes for Oceania's bank/bond debt which is ultra cheap, and the bank debt is set to refinance 5 years from now. More of this debt would be a good thing.
As you are in Hamilton NZ and your benchmark is American, do you take into account the change in the USD/NZD exchange rate on the American index?

[thegreatestben]

Debt can make you rich or destroy you. You got to know when to load up on it. Unfortunately I am not person lol.

I am loaded up, just under $2m - we can afford it, there is risk in terms of possible impacts but we manage the likelihood of problems happening.
I checked what my servicing is like compared to an average household with a mortgage of 650k and our monthly payments are comparable - about $500 a week currently but 7% interest rate will put us around $1000 a week.

Main thing is we haven't got all our eggs in one basket either.

[Fortunecookie]

I am loaded up, just under $2m - we can afford it, there is risk in terms of possible impacts but we manage the likelihood of problems happening.
I checked what my servicing is like compared to an average household with a mortgage of 650k and our monthly payments are comparable - about $500 a week currently but 7% interest rate will put us around $1000 a week.

Main thing is we haven't got all our eggs in one basket either.

Generally speaking I guess the more leveraged a company or a person is. They need to be on point where they think the direction of the market is going and/or cashflow easily covers debt repayment. Otherwise why leverage up/ the return on equity may turn negative.

By the sounds of it you done your DD and you have got a exit strategy if required. Everyones case is different. I think debt is fluid and it pays to actively monitor it.

[SailorRob]

One of my rules of investing is to not have money in a company with over 40% gearing.


The whole point I was trying to encourage others to take up, is that this is totally meaningless.

The amount of debt a business has to its equity really doesn't mean a lot and is a very lazy method of analysis.

Many of the best businesses in the world require no equity at all as Buffett often reminds us, others that are absolute piles of rubbish are loaded with 'equity' like the refineries billion dollars plus of property plant and equipment.

All that matters is the amount of cash the business can produce in relation to their capital employed and how sustainable it is. Equity cannot be used to service debt unless you try and liquidate it and I can tell you that if you are liquidating equity to pay off a debt you cannot pay any other way then your equity wont be worth much.

So taking the Raws rule, Apple Inc is uninvestable due to solvency risk. Now perhaps it's expensive and one would not want to invest on that basis, but because of solvency risk??????????? With their 60 billion in equity against their massive comparable liabilities including nearly double their equity in interest bearing debt... Wow I am scared. Better I invest in a refinery that has lots of solid equity assets.

This is just one example, there are many other issues that I don't have time to go into, but what of insurance float?

So over 40% gearing could be the best thing in the world or it could mean imminent solvency risk, but some stupid rule is not going to tell you that.

If Apple was bought by another company for cash suddenly it would have TRILLIONS of dollars in equity, where as now it has basically none.

Remember in most of the great businesses... the equity is invisible and in most of the worst businesses, the equity is easily identifiable.

I would also suggest that ValueNZ need not anyone's wishes or luck. He is going the other route and putting in massive amounts of work and beginning the compounding journey at such an age that it's very unlikely that he will not do extremely well even if he falls short of the goal of outperforming the SP500.

Regarding the currency offset with that as your index, it matters not. The NZD will never continually appreciate against the USD, it will go up and down range bound, thus all come out in the wash over many years, however there is every chance that the USD will compound against us thus improving local returns over the long term, and if that's the case then well deserved and I would count it. If the USD weakens against NZD over the long term, what I'd do is get your eyes checked.

[Rawz]

SRob calm down.. we were talking about using leverage for growth.

[SailorRob]

SRob calm down.. we were talking about using leverage for growth.


Looking back at the original comment and those preceding it, it doesn't look like that was the case. However, same applies in that context as well.

Those who borrowed at 5000 year lows to fund productive assets are looking good right now.

[SailorRob]

I'm on the rums again and difficult to contain myself.

[Rawz]

I'm on the rums again and difficult to contain myself.
Just remember, never drink more than 40% of a bottle of rum. Very risky after that ;)

[davflaws]

Just remember, never drink more than 40% of a bottle of rum. Very risky after that ;)

Its OK. Rum is around 40% alcohol.

[winner69]

REINZ property sales data for September out.

Main point for retirement sector is ‘ Sales counts across New Zealand were 5.1% higher in September compared to this time last year from 5,174 to 5,439, year-on-year’. Even so the 5,439 was less than August numbers.

The guy at interest.co.nz says maybe it’s a case of ‘ Does this show green shoots, or perhaps a market that's bouncing along the bottom?’

Be interesting what Brett says next month.

Prices up fractionally ….that’s good

https://www.interest.co.nz/property/124722/do-latest-reinz-sales-figures-show-green-shoots-appearing-or-market-thats-bouncing

[Mrbuyit]

I am loaded up, just under $2m - we can afford it, there is risk in terms of possible impacts but we manage the likelihood of problems happening.
I checked what my servicing is like compared to an average household with a mortgage of 650k and our monthly payments are comparable - about $500 a week currently but 7% interest rate will put us around $1000 a week.

Main thing is we haven't got all our eggs in one basket either.

This is probably a dumb question but it reads like you have borrowed significantly to buy OCA shares is this the case, showing high conviction for some form of uptick, or are you talking about general debt on property, or perhaps a nice yacht etc..

Apologies if my question is inappropriate, just keen to understand if you have decided to leverage into a fat wedge of OCA that's all.

[thegreatestben]

It's fine, at that point it was a general discussion about leverage.
I borrowed to subdivide and develop my personal home.

I am not leveraged for my OCA holding.

edit - After doing the development/property investing I am not convinced it's a winning formula but as most would know, the bank would never entertain the idea of giving me any significant amount of money to buy shares.

[Mrbuyit]

I figured that was the likely scenario, I was at a party a while ago and a bank manager had suggested leveraging into some shares, he was hassling me about how I had not closed out my mortgage even though it was paid off ~10 years ago.. I see it as easily obtainable funds if needed for something, might save having to sell some OCA shares when the wife wants a new pair of shoes.

I'm not convinced I'm brave enough to be borrowing large sums to drop in the sharemarket.. or even a property development!

[mike2020]

SR must be typing a long response its been 25 minutes already

[SailorRob]

SR must be typing a long response its been 25 minutes already


Haha good call. Yeah I have a few comments but massive opportunity overnight with the stupid obesity drug news creating some exceptional situations. One hint. Weschler.

Ultimately money is fungible and debt is against all assets unless legally separated and even then it's about collateral so not really relevant. If you have a mortgage and you have shares then are you borrowing for the pad or the shares. Fungible.

[thegreatestben]

I tend to agree, the houses aren’t a bad investment, we’re committed. I’ve learnt a lot from the experience, I am pleased with our contribution to quality housing. Doing pretty well but always aiming for better,
I have shares, the houses, investment funds, cash buffer etc.

I’ve got a plan to be looking at having atleast $6m - $8m by the time I’m 65. I only really learnt about how I can use money/assets/debt from age 30 and I’m 35 now.

I’m into OCA at a similar level to SR unless he was busy buying during his ban. His point of view and advice has been helpful in adding to my understanding and personal approach to investing.

[Mrbuyit]

Fair call, it's all a bucket of debt whichever way you slice it.. I guess the question was more about the intent of extending debt for the sole purpose of owning more of OCA. As earlier on in the thread I think TGB had posted about picking up what sounded like a sizable parcel..

I'm a bit on the fence at the moment, do I accumulate more , or just hold on to what I have... OCA is roughly half my portfolio, having owned since 2018 I guess, sold off about 20% in the mid 140's as I had a project to build a deck. Then it turned out the deck ended up being a lot cheaper so had some funds left over to sink back into OCA. I have been just building cash and TD's for the past ~12 months rather than adding anything much in the way of shares...and if SR's hope of a 5c share price doesn't come through ( and we all partake in the DRP)then does this just wobble along doing nothing or head back towards NTA. The warriors didn't make the grand final, is this a setback for OCA.

MAV says there might be an uptick in sales, and resales soon to follow, others say running costs too high, and housing market still dead .. SR likes the neverending IOU that OCA has on the books.. no wonder this thread is so active..

[Baa_Baa]

His point of view and advice has been helpful in adding to my understanding and personal approach to investing.

I agree, it was a very helpful perspective to understand how current accounting methods don't recognise a perpetual line of credit (masquerading as debt) that will only grow, that can be used for anything, like development growth, with no interest and the only obligation of paying back a lesser percentage of it, when the customer departs.

Credit to the RYM founder who figured out this unbelievably successful business model that not only meets the needs of retirees, but will sustain profitably for operators and investors , regardless of how much the government pitches in funding, which only changes the balance of the type of properties RV's choose to invest in.

[ValueNZ]

Other than insurance and the retirement village operators, does anyone know of any sectors which benefit from interest free loans created by the collect now and pay later model?

[Joshuatree]

Haha good call. Yeah I have a few comments but massive opportunity overnight with the stupid obesity drug news creating some exceptional situations. One hint. Weschler.
Weschler? Buffet? Berkshire? CSL ?

[Fortunecookie]

Other than insurance and the retirement village operators, does anyone know of any sectors which benefit from interest free loans created by the collect now and pay later model?

Hey ValueNZ

There are few

Airlines
Funeral homes
Starbucks(membership card they load up with credit)

I think there's more but my mind has gone blank. Essentially any form of prepayment that allows them to earn interest, offset borrowing cost or invest.

[SailorRob]

Weschler? Buffet? Berkshire? CSL ?

Very close. Ted Weschler of Berkshire. Look at his personal portfolio. Basically 100% in one company. 200 million dollars. Study that company.

[Rawz]

Very close. Ted Weschler of Berkshire. Look at his personal portfolio. Basically 100% in one company. 200 million dollars. Study that company.

Would be handy if you said what the company was…

[Leemsip]

Would be handy if you said what the company was…

Refering to DVA on the NYSE, Davita Inc. Kidney care company getting smashed by overblown Ozempic news....
30% down this month...... ouch

Classic case of huge reactionary selling. Hard to know when it will stop though...

[Rawz]

Other than insurance and the retirement village operators, does anyone know of any sectors which benefit from interest free loans created by the collect now and pay later model?

PYS.nzx have a big float. Its ever growing. Dont tell SRob

[SailorRob]

Refering to DVA on the NYSE, Davita Inc. Kidney care company getting smashed by overblown Ozempic news....
30% down this month...... ouch

Classic case of huge reactionary selling. Hard to know when it will stop though...

Doesn't matter when it will stop. Once you've bought, the lower it drops the more money you'll make.

Their business model is repurchases.

[SailorRob]

Yes thanks, I know this is the OCA thread. I'm done!

[Perky]

Removed not relevant to oca

[Bjauck]

A poster mentioned that they used the SP500 as their long term benchmark for investments.

OCA 1/1/2020 (pre-Covid) $1.32
OCA today $0.72 (-45%)

SP500 1/1/2020. 3234
SP500 today 4327. (+34%)
Movement USD/NZD 1.50/1.70 (+13%)

NZX50c up just 2% in the same period!!!

Disc. Figures are approximate.

[SailorRob]

A poster mentioned that they used the SP500 as their long term benchmark for investments.

OCA 1/1/2020 (pre-Covid) $1.32
OCA today $0.72 (-45%)

SP500 1/1/2020. 3234
SP500 today 4327. (+34%)
Movement USD/NZD 1.50/1.70 (+13%)

NZX50c up just 2% in the same period!!!

Disc. Figures are approximate.


It's every serious investors benchmark, anyone using anything else is like comparing your reading skills to the IHC, just trying to make yourself look better. The exception to this would be the elderly who need to access a lot of their net worth and cannot risk the volatility. They could benchmark to a local currency fixed income of some sort.

Yes the good old NZ50C... I read a post by someone recently saying something like the NZ50C is one standard deviation below trend. Gobsmacked I was that someone would type this out! The NZ50C only regained 1987 highs in 2017 for gods sake, does this person thing the trend they were referring to is natural reality of NZ capital markets? The 'trend' was created by massive historical anomalous multiple expansion brought on by a decline to 5000 year lows in rates... the one standard deviation below trend is the beginnings of what could be 15 to 20 years sideways chop as things regain normality. Maybe it won't who knows, but it could.

The point I am making is the trend they were on about is not from rising EPS or success from NZ listed companies, so of course at some point it will mean revert, could be down the escalator or sideways for years while inflation takes a bite out, but this person is probably buying thinking that it's so far off the trend it was on that surely it will have to pop back... Bulls over brought I guess.

[SailorRob]

I am loaded up, just under $2m - we can afford it, there is risk in terms of possible impacts but we manage the likelihood of problems happening.
I checked what my servicing is like compared to an average household with a mortgage of 650k and our monthly payments are comparable - about $500 a week currently but 7% interest rate will put us around $1000 a week.

Main thing is we haven't got all our eggs in one basket either.


Thanks a lot to yourself and BaaBaa for the feedback regarding anything I have added to the OCA balance sheet discussion.

Regarding your OCA position, you certainly have some biscuits. As you've said you plan on having 6-8 mil by 65 and you're 35 now, I assume that this investment is a massive part of your current net worth. Now doing what you have done is how you get rich and fairly quickly (and a lot of people do) BUT it also carries risk of getting taken out of the game, or really seriously damaged (I don't think you will). Your position is far bigger than mine as a % of net worth.

I try and play a game where I cannot be taken out of the game no matter what. I can survive any one position going to zero though BRK would hurt but the chances of it going to zero are zero in my opinion.

With OCA permanent impairment is certainly possible but unlikely, think law changes, or - one of the best comments ever posted on this thread - someone asking about all this free leverage I rant on about being miss allocated or losing money. Free money isn't a good thing if you invest it at a loss.

You really do have a pair and I think it will pay off big time, the point I am making though is that good investing should not require sacks the size of king kong, it shouldn't require any at all. Don't take this as criticism, It seems like you understand all this well. I just can't play that game.

I think this investment will really pay off for you.

[Bjauck]

It's every serious investors benchmark, anyone using anything else is like comparing your reading skills to the IHC, just trying to make yourself look better. The exception to this would be the elderly who need to access a lot of their net worth and cannot risk the volatility. They could benchmark to a local currency fixed income of some sort.

Yes the good old NZ50C... I read a post by someone recently saying something like the NZ50C is one standard deviation below trend. Gobsmacked I was that someone would type this out! The NZ50C only regained 1987 highs in 2017 for gods sake, does this person thing the trend they were referring to is natural reality of NZ capital markets? The 'trend' was created by massive historical anomalous multiple expansion brought on by a decline to 5000 year lows in rates... the one standard deviation below trend is the beginnings of what could be 15 to 20 years sideways chop as things regain normality. Maybe it won't who knows, but it could.

The point I am making is the trend they were on about is not from rising EPS or success from NZ listed companies, so of course at some point it will mean revert, could be down the escalator or sideways for years while inflation takes a bite out, but this person is probably buying thinking that it's so far off the trend it was on that surely it will have to pop back... Bulls over brought I guess.
I take note of your Damascene conversion to the American index sp500, and your condescending pity for those who do not share your belief. Not just the elderly kiwis need their funds to be translated to NZD for their life in NZ.

[SailorRob]

I take note of your Damascene conversion to the American index sp500, and your condescending pity for those who do not share your belief. Not just the elderly kiwis need their funds to be translated to NZD for their life in NZ.

Anyone with USD will have a far better life in NZ.... I certainly do.

[SailorRob]

I take note of your Damascene conversion to the American index sp500, and your condescending pity for those who do not share your belief. Not just the elderly kiwis need their funds to be translated to NZD for their life in NZ.

The NZD will never compound against the USD. We will never in aggregate produce more goods and services that are internationally desired more efficiently than the US. But there is a chance the NZD becomes worth very little.

[Meister]

So what is with OCA's huge discount to NTA? No trust in the values after the last few years, or no trust in the assets ability to earn?

[SailorRob]

So what is with OCA's huge discount to NTA? No trust in the values after the last few years, or no trust in the assets ability to earn?


You have asked a very interesting question.

OCA's discount to NAV is far far higher than it looks, probably about 75% discount to NAV.

The trust in values you ask about is exactly the same thing as trust in assets ability to earn, one defines the other. If the asset has no ability to earn then it has no value, or its value is speculative and impossible to measure.

OCA only has to have a very small earning from their asset base in order for equity holders to do well.

[winner69]

Hey bull …..OCA tested that 74 resistance (the one you mentioned) a few times today but closed at 73

Suppose confirmation that 69/74 is new trading range?

[bull....]

Hey bull …..OCA tested that 74 resistance (the one you mentioned) a few times today but closed at 73

Suppose confirmation that 69/74 is new trading range?

plenty of sellers at 74c , i dont think there is a new range at this stage

[bull....]

wonder if this true for oca

Aged residential care providers are losing up to $15 per resident per day

https://www.stuff.co.nz/national/health/133141476/aged-care-providers-losing-up-to-15-per-resident-a-day

results wont look good ?

[SailorRob]

wonder if this true for oca

Aged residential care providers are losing up to $15 per resident per day

https://www.stuff.co.nz/national/health/133141476/aged-care-providers-losing-up-to-15-per-resident-a-day

results wont look good ?

Solid analysis, one step ahead of the herd.

[Bjauck]

wonder if this true for oca

Aged residential care providers are losing up to $15 per resident per day

https://www.stuff.co.nz/national/health/133141476/aged-care-providers-losing-up-to-15-per-resident-a-day

results wont look good ?I doubt that a National Party govt will increase funding as they will be struggling to support their tax cuts. Will we end up with multiple bed dormitories for those who rely on government subsidies?

[bull....]

I doubt that a National Party govt will increase funding as they will be struggling to support their tax cuts. Will we end up with multiple bed dormitories for those who rely on government subsidies?

one suggestion was too pay people the subsidy to use there homes instead of going to a bed care facilty


:scared: lower revenue for RV stocks

[Bjauck]

one suggestion was too pay people the subsidy to use there homes instead of going to a bed care facilty


:scared: lower revenue for RV stocks
Lower revenue, yet higher profit as the provision of rest home care has often been loss making.

Over the years the age on admission to a rest home has been creeping up. There are already quite a few supports in place for those who stay in their own homes. The leeway for increasing those supports must already be slim before it is neither cost effective nor safe for people to remain at home.

[ronaldson]

Just a reminder to everyone that OCA's Annual Report for FY23 contains the following :-

"On 9 May 2023 the Group entered into a sale and purchase agreement with a third party in respect of two sites held for sale, conditional upon Te Whatu Ora approval. The carrying amount of these sites as at 31 March 2023 is $10.2m and the transaction is expected to settle in August 2023."

The implication is that the transaction was an unconditional one, except for approval of the incoming operator as suitable to own and manage the facilities. This would appear to be a straightforward issue so it is surprising that holders continue to await an update outcome for the transaction, and to learn whether the transaction is at a gain or a loss to the carry value in OCA's books which in my view has implications for the underpinning or not of the carry value attributed to other like facilities held by OCA and other listed operators given the dearth of current transactional evidence available to valuers in this context.

These transactions are always announced upon completion even if not truly material, given the public nature of transitioning residents/occupiers (and usually staff) to another operator.

So no news at present is an unusual circumstance just now. Whereas some form of market update as to sales/resales for the half year just expired could not really be anticipated for a while and perhaps only accompanying the November announcement.

Another fortnight has passed and we are no better informed. This is perhaps the clearest indication of all that basic aged care facilities are virtually unsaleable. I know RAD recently announced the (conditional) sale of Arran Court in Auckland to (hopefully) settle in January but it has not confirmed settlement of another small facility sale previously announced, which was to be at a loss of over $1m to book value.

And remember OCA has ten facilities recorded as "held for sale" under the accounting rules. On a wider perspective this is not pretty, and the situation doesn't seem to have changed despite the increase in care/bed subsidy from 1 July 2023.

I might keep reposting the above message every fortnight in the hope Brent gets motivated to at least keep shareholders in the picture.

[Valiant]

Another fortnight has passed and we are no better informed. This is perhaps the clearest indication of all that basic aged care facilities are virtually unsaleable. I know RAD recently announced the (conditional) sale of Arran Court in Auckland to (hopefully) settle in January but it has not confirmed settlement of another small facility sale previously announced, which was to be at a loss of over $1m to book value.

And remember OCA has ten facilities recorded as "held for sale" under the accounting rules. On a wider perspective this is not pretty, and the situation doesn't seem to have changed despite the increase in care/bed subsidy from 1 July 2023.

I might keep reposting the above message every fortnight in the hope Brent gets motivated to at least keep shareholders in the picture.


Is anyone informed as to what 'approval' is required of Te Whatu Ora to complete the sale?

[BlackPeter]

Another fortnight has passed and we are no better informed. This is perhaps the clearest indication of all that basic aged care facilities are virtually unsaleable. I know RAD recently announced the (conditional) sale of Arran Court in Auckland to (hopefully) settle in January but it has not confirmed settlement of another small facility sale previously announced, which was to be at a loss of over $1m to book value.

And remember OCA has ten facilities recorded as "held for sale" under the accounting rules. On a wider perspective this is not pretty, and the situation doesn't seem to have changed despite the increase in care/bed subsidy from 1 July 2023.

I might keep reposting the above message every fortnight in the hope Brent gets motivated to at least keep shareholders in the picture.

Cheers for keeping this in our minds. And you are right - Oceanias information policy sucks.

I used this opportunity and contacted them today (as share holder) directly by email and inquired about the status of the deal you referred to. Will report back in case I get any substantial response (but - I don't hold my breath :) ;.

Anyway - maybe we share holders just need to educate them about our needs .. and maybe ask (starting with the next AGM) any director up for renewal, whether (s)he realises that Oceanias information policy is lacking ... and what they plan to do to improve it - and obviously only confirm directors with a satisfactory response.

Sort of annoyed I missed this opportunity this year. My excuse? - well - sorry, was too distracted by personal stuff, but I really think we need to do in future more to change Oceanias lacking communication strategy then just complain in an anonymous forum about them.

If anybody else wants to express now their dissatisfaction (in a polite but firm message) directly to them - you could start using this email address: enquiry@oceaniahealthcare.co.nz

Next time I intend to escalate :) ;

[winner69]

BP …if she is still there ask Anna anna.thorburn@oceaniahealthcare.co.nz

You will get ‘thanks for your enquiry Peter but unfortunately but we cannot share this information with you at this time’

[Baa_Baa]

If you're a shareholder and want to contact them, this is a better email than the general 'enquires' ... investor@oceaniahealthcare.co.nz "you can contact Computershare with any shareholder queries."​

[winner69]

Instead of enquiry@ email use investor@oceaniahealthcare.co.nz

Least shows you are an ‘investor’ and not looking to move in

But bear in mind Oceania treat shareholders like a pain in the proverbial and show them little respect ….a bloody nuisance they are …until the begging bowl comes out

[ronaldson]

Good work BP. But it would be a foolish CEO and Chair who did not proactively monitor this thread from time to time, so I believe they are aware. Looking forward to a repost in due course of the response you receive.

[BlackPeter]

BP …if she is still there ask Anna anna.thorburn@oceaniahealthcare.co.nz

You will get ‘thanks for your enquiry Peter but unfortunately but we cannot share this information with you at this time’


If you're a shareholder and want to contact them, this is a better email than the general 'enquires' ... investor@oceaniahealthcare.co.nz "you can contact Computershare with any shareholder queries."​

cheers, I guess I will see whether I get anything on my original request back, but will use these to slowly escalate :) ;

[Entrep]

But it would be a foolish CEO and Chair who did not proactively monitor this thread from time to time

how so?

10 characters

[bull....]

might hit the 60s soon

[SailorRob]

might hit the 60s soon

Let's hope.

[winner69]

If bond yields are anything to go by Synlait, Oceania and Fletchers are the ‘riskiest’ companies on the NZDX

Oceania in good company

[mike2020]

If bond yields are anything to go by Synlait, Oceania and Fletchers are the ‘riskiest’ companies on the NZDX

Oceania in good company
How do you get this? Those two have actual issues on the table while oca is subject to some speculation its just following a trend. Plus it has tangible assets. We don't need another Met life scenario.

[winner69]

How do you get this? Those two have actual issues on the table while oca is subject to some speculation its just following a trend. Plus it has tangible assets. We don't need another Met life scenario.

Just that they are highest yielding bonds on nzdx ….some see this as a measure of “risk”

As a matter of interest MET bonds are yielding less.

[Baa_Baa]

You stirring again, OCA (has more than one bond) is half SML bonds and within cooee of all the RVs, REIT’s and other big names like IFT etc. What exactly did you want to say by making that post? Disingenuous it seems.

[winner69]

You stirring again, OCA (has more than one bond) is half SML bonds and within cooee of all the RVs, REIT’s and other big names like IFT etc. What exactly did you want to say by making that post? Disingenuous it seems.

Looking at the order/ranking of bond yields and the differences between each of the RV companies I think the market is trying to tell us something about they think of the relative merits of these four companies…..and how ‘risky’ they are as an investment

From NZDX -

OCA 8.2%/8.33%
ARV 8.05%
MET.7.82%
RYM 7.43%
SUM 6.99%/7.00%/7.29%

The 5 year Govt rate is 5.4% …..so spread/premium SUM has is 1.4% points v OCA of 2.8% points …….that’s quite significant and not within cooee of each other as you say

[Bjauck]

Looking at the order/ranking of bond yields and the differences between each of the RV companies I think the market is trying to tell us something about they think of the relative merits of these four companies…..and how ‘risky’ they are as an investment

From NZDX -

OCA 8.2%/8.33%
ARV 8.05%
MET.7.82%
RYM 7.43%
SUM 6.99%/7.00%/7.29%

The 5 year Govt rate is 5.4% …..so spread/premium SUM has is 1.4% points v OCA of 2.8% points …….that’s quite significant and not within cooee of each other as you say
It is so sad, very sad that the bond market seems to rate riskiness in order of the amount of care provided by the retirement company, SUM being substantially a property development company. I think it partly reflects the fact that government policy provides more of a guarantee for real estate values rather than funding to at least cover the cost of care. It is unlikely that priority will change under a National Party led govt. Policy has certainly ensured NZ real estate investments have a substantial element of risk-free return.

[SailorRob]

It is so sad, very sad that the bond market seems to rate riskiness in order of the amount of care provided by the retirement company, SUM being substantially a property development company. I think it partly reflects the fact that government policy provides more of a guarantee for real estate values rather than funding to at least cover the cost of care. It is unlikely that priority will change under a National Party led govt. Policy has certainly ensured NZ real estate investments have a substantial element of risk-free return.


Not sad at all.

That's a disfunctional market and opportunity is there to take advantage of others ignorance.

[Bjauck]

Not sad at all.

That's a disfunctional market and opportunity is there to take advantage of others ignorance. It is not dysfunctional. It is the result of government policy. Governments are formed as the result of elections. I think it is sad that the return for the providers of care services is given such a low priority in NZ.

[SailorRob]

It is not dysfunctional. It is the result of government policy. Governments are formed as the result of elections. I think it is sad that the return for the providers of care services is given such a low priority in NZ.

No. It's a mispricing by the bond market.

[BlackPeter]

It is not dysfunctional. It is the result of government policy. Governments are formed as the result of elections. I think it is sad that the return for the providers of care services is given such a low priority in NZ.


No. It's a mispricing by the bond market.

Unusual, but in this case I think you are both right ... and this is not even mutually exclusive :) ;

[bull....]

Looking at the order/ranking of bond yields and the differences between each of the RV companies I think the market is trying to tell us something about they think of the relative merits of these four companies…..and how ‘risky’ they are as an investment

From NZDX -

OCA 8.2%/8.33%
ARV 8.05%
MET.7.82%
RYM 7.43%
SUM 6.99%/7.00%/7.29%

The 5 year Govt rate is 5.4% …..so spread/premium SUM has is 1.4% points v OCA of 2.8% points …….that’s quite significant and not within cooee of each other as you say

So true winner OCA priced like this for a reason

[bull....]

No. It's a mispricing by the bond market.

lol
thats what a under water OCA share holder would say isnt it

[BlackPeter]

So true winner OCA priced like this for a reason


lol
thats what a under water OCA share holder would say isnt it


Not quite sure I understand your argumentation, unless you are saying the market is rational and always right?

Lets face it, if it would be, then there would be no point for traders like you to be hanging around, wouldn't it?

Remember - if the market is always right and always rational, than it does not matter what you buy or sell, given that the market always correctly prices it. No chance to make money above the standard interest rate - i.e. better put your money into the savings account.

In this case - better go fishing (or whatever else you fancy) - no money to be made with buying and selling stuff.

I remember however most of the people in this forum talking about good buying opportunities (when something looks cheap) and (admittedly to a lesser extend) good selling opportunities (when a share looks to dear). Whihc means the majority (maybe even you) fully understand that markets tend to be wrong.

Which means - market view of a companies value is quite irrelevant, because markets only sometimes get it right (and often wrong).

Both investors as well as traders make money if they get it right when the market got it wrong ... assuming they have enough patience for markets to realise and correct its mistake.

One of your problems seems to be that your patience appears to be wanting :) - or is it just that you enjoy winding people up?;

[bull....]

Not quite sure I understand your argumentation, unless you are saying the market is rational and always right?

Lets face it, if it would be, then there would be no point for traders like you to be hanging around, wouldn't it?

Remember - if the market is always right and always rational, than it does not matter what you buy or sell, given that the market always correctly prices it. No chance to make money above the standard interest rate - i.e. better put your money into the savings account.

In this case - better go fishing (or whatever else you fancy) - no money to be made with buying and selling stuff.

I remember however most of the people in this forum talking about good buying opportunities (when something looks cheap) and (admittedly to a lesser extend) good selling opportunities (when a share looks to dear). Whihc means the majority (maybe even you) fully understand that markets tend to be wrong.

Which means - market view of a companies value is quite irrelevant, because markets only sometimes get it right (and often wrong).

Both investors as well as traders make money if they get it right when the market got it wrong ... assuming they have enough patience for markets to realise and correct its mistake.

One of your problems seems to be that your patience appears to be wanting :) - or is it just that you enjoy winding people up?;

lol

market right

as winner was implying OCA is the dog of the lot that's why its bond risk is higher than the other's and rising rates make it even more of a dog.

market not wrong again that's why the price has fallen from 1.60 odd to 70c because the market is pricing it accordingly
in the time it takes for the price to get there , there is always going to be up's and down's that's how markets work. they very rarely go in a straight line to correct valuations as you get people like yourself and sailor rob who think the company is a bargain and these type of people cause the blip ups etc but over time the market keeps the price chugging along to the trend of fundamentals at the time
in the long run market is usually right unless some sudden change in circumstances changes the outlook etc.
guess thats what sailor boy keep's praying for that one day in the future he will be proved right by a change in fundamental circumstances

[bull....]

we have hit the 60s :scared:

[bull....]

oh my test the lows today :scared: how are the bonds doing ? :scared: must be to do with no buyers of there property for sale ?

[BlackPeter]

oh my test the lows today :scared: how are the bonds doing ? :scared: must be to do with no buyers of there property for sale ?

Just the usual Bull droppings, isn't it?

We all know obviously that other retirement villages are doing worse. Here is a one year comparison with the once gold standard Ryman:

(Ryman - blue line, OCA - fat red line).

14810

Just wondering whether your genius can explain why Ryman dropped by more than 34% in a year and OCA not even by 18%?

Must be lots of properties RYM can't sell, isn't it?

[winner69]

Just the usual Bull droppings, isn't it?

We all know obviously that other retirement villages are doing worse. Here is a one year comparison with the once gold standard Ryman:

(Ryman - blue line, OCA - fat red line).

14810

Just wondering whether your genius can explain why Ryman dropped by more than 34% in a year and OCA not even by 18%?

Must be lots of properties RYM can't sell, isn't it?

Be interesting to see what that chart will look like in a years time …….after OCA cap raise ;)

[SHKWAV]

Hi all! I’m a new poster here but have followed this thread for several years now with interest and have enjoyed the comments and many varied view points concerning the rises and falls in share price. I am at the moment firmly of the opinion that the current falls in OCA and indeed many other shares has very little to do with the company at all and far more to do with the present war occurring in the Middle East! Seems to me there is a whole lot of scared investors out there dumping their shares on the market to before there is a fearful crash! Just the sort of times long term investors love! As Buffet famously said “ When the market gets fearful get greedy! When the market gets greedy be fearful!” Today the market is not right concerning the company it is just fearful! Cheers All!

[Entrep]

And OCA vs SUM which is the current blue chip standard.

14812

[Antipodean]

Cap raise calls again already? Not happy with being wrong the last several times?



Question 11: Is Oceania planning to do a capital raise to improve its capital structure?
We recognise that balance sheet management is important. Oceania undertook a capital raise in 2021 to
fund the acquisition of Waterford and Franklin and subsequent acquisitions have been funded by debt.
Oceania has no immediate plans for a capital raise and has sufficient headroom in its banking facilities for
growth.

[bull....]

Just the usual Bull droppings, isn't it?

We all know obviously that other retirement villages are doing worse. Here is a one year comparison with the once gold standard Ryman:

(Ryman - blue line, OCA - fat red line).

14810

Just wondering whether your genius can explain why Ryman dropped by more than 34% in a year and OCA not even by 18%?

Must be lots of properties RYM can't sell, isn't it?

guess you could argue OCA got some catching up to do on the downside then

[Leemsip]

Its interesting that some of the the worst investments are the most discussed companies on sharetrader and have strong support here. A2M, PEB Im looking at you.

OCA is also a constant source of discussion (just saying).

[Rawz]

Its interesting that some of the the worst investments are the most discussed companies on sharetrader and have strong support here. A2M, PEB Im looking at you.

OCA is also a constant source of discussion (just saying).

Yes, funny isnt it.

[winner69]

Entrep posted a OCA v SUM. Here’s my updated OCA v SUM chart since OCA listed

All it says to me is that SUM share price outperforms OCA weather market going up or going down …..and has done so listing.

Spooky trend ….. can’t keep going down to zero can it …..but unless something ‘dramatic’ happens to either it’ll possibly continue for a while longer as the trend is so entrenched.

Sorry for posting.

[Rawz]

Dont be sorry W69.. I hold OCA and if its a dog i want to know

[X-men]

Would be funny eh....the management toned out...no capital raise....then suddenly announce capital raise.

They would lose thier credibility.....

[winner69]

Hey bull. ..the 74/79 trading range went to 69/74 and that 69 didn’t hold today and a close at 68

Does that suggest a new trading range of 64/69

Weekly close of 68 isn’t good ….some say that punters like to settle up at the end of the week and leave things in obeyance and as such is a pretty strong reflection of market price.

New week ….wonder what’ll it bring?

[Blue Skies]

Does anyone have Directors OCA shareholdings & buy/sell dates /prices?
Very interested to know how much skin in the game they have.

[Sideshow Bob]

Does anyone have Directors OCA shareholdings & buy/sell dates /prices?
Very interested to know how much skin in the game they have.

Holdings here, page 79 - https://images.oceaniahealthcare.co.nz/wp-content/uploads/2023/05/24143744/OCA-Annual-Report-31-March-2023-1.pdf

[winner69]

Does anyone have Directors OCA shareholdings & buy/sell dates /prices?
Very interested to know how much skin in the game they have.


Chair Liz has forked out about $2m for her shares at an average of just over $1

A few months ago was $634k under water

Probably worse now.

[Blue Skies]

Holdings here, page 79 - https://images.oceaniahealthcare.co.nz/wp-content/uploads/2023/05/24143744/OCA-Annual-Report-31-March-2023-1.pdf


Thanks, got it, page 79, had briefly checked Annual report but just hadn't waded that far through it.

[Blue Skies]

Chair Liz has forked out about $2m for her shares at an average of just over $1

A few months ago was $634k under water

Probably worse now.



Thanks, that's exactly the sort of info I wanted to know.

[Antipodean]

Quite a lot of insider holding, wonder if long term they have priced it better or the market has?

[Rawz]

Thanks, that's exactly the sort of info I wanted to know.

Makes one feel better aye, knowing insiders are in the red along with everyone else

[X-men]

Oca should just sell all the assets and pay the shareholders with the sales... after all... shareholders will get more than this pathetic 68c...lol

[Rawz]

Oca should just sell all the assets and pay the shareholders with the sales... after all... shareholders will get more than this pathetic 68c...lol

Haven’t you heard? Impossible to sell retirement homes in todays market

[Ggcc]

How low can this share go? I really feel for people who bought for $1.50+

[Entrep]

Technically if this loses 66c it can go into freefall.

14816

[Blue Skies]

Here's some reassuring thoughts,

The population 85+ years was about 84,400 in 2018 (1.8% of the population )
This age group projected to more than TRIPLE to 260,000 people by 2043 (4.3% of the population)

And 65+ to almost double to 1.37 million by 2043.

So hang in there folks, the fundamentals look sound, solid assets, a product you can sell over & over again but you still own, & a rapidly expanding customer base.

[X-men]

What hard to sell?

Sell all assets to the Government, social housing.... shareholders will get more that this pathetic 67c n not to mention dealing with the poor management

[Balance]

What hard to sell?

Sell all assets to the Government, social housing.... shareholders will get more that this pathetic 67c n not to mention dealing with the poor management

Not going to happen as Kainga Ora has overspent its budget by billions of dollars (most of it wastefully and on staff) so the clamps have been applied by Megan Woods even before the election.

[bull....]

from forbarr and greek

Oceania Healthcare (OCA)
Interest costs, debt, and cash flow
OCA's flagship ~NZ$150m development The Helier will likely be in focus. Large scale launch of the apartment sell down was not until late August. We are unlikely to see many if any sales in the 1H24 period, but OCA should have seen at least a handful after period end. The delay of The Helier will result in yet another period with increasing debt, we estimate ~+NZ$40m (to NZ$585m). For the full year we expect largely flat net debt and positive free cash flow. A first for many years for any of the listed aged care operators.

Earnings changes
We lower our forecasts on the back of lower resale gains (lower prices), lower new sale gains (prices and units in FY24), lower DMF and slightly higher interest costs (OCA has the lowest effective interest rate in the sector given its high portion of fixed debt, notably its retail bonds). Our net debt forecasts increase and we no longer forecast a fall in FY24 due to higher capex and lower cash flow from new sales.

[BlackPeter]

from forbarr and greek

Oceania Healthcare (OCA)
Interest costs, debt, and cash flow
OCA's flagship ~NZ$150m development The Helier will likely be in focus. Large scale launch of the apartment sell down was not until late August. We are unlikely to see many if any sales in the 1H24 period, but OCA should have seen at least a handful after period end. The delay of The Helier will result in yet another period with increasing debt, we estimate ~+NZ$40m (to NZ$585m). For the full year we expect largely flat net debt and positive free cash flow. A first for many years for any of the listed aged care operators.

Earnings changes
We lower our forecasts on the back of lower resale gains (lower prices), lower new sale gains (prices and units in FY24), lower DMF and slightly higher interest costs (OCA has the lowest effective interest rate in the sector given its high portion of fixed debt, notably its retail bonds). Our net debt forecasts increase and we no longer forecast a fall in FY24 due to higher capex and lower cash flow from new sales.

The master of selective reporting :) ...

you just missed this bit from the same report:


RYM has an established presence in Australia with decades of unencumbered growth ahead. This is offset by SUM's superior cash recovery of capex, more capital light development model and therefore ability to grow faster. We value both companies on the same multiple. We make minor downgrades to our estimates and reiterate our OUTPERFORM ratings on RYM, ARV and OCA.

[bull....]

The master of selective reporting :) ...

you just missed this bit from the same report:

im glad you added that bit BP :) as you have highlighted they have made some downgrades but they believe they will outperform those down grades

[peat]

im glad you added that bit BP :) as you have highlighted they have made some downgrades but they believe they will outperform those down grades

I would have thought the commentary meant they will outperform the market. That what is usually meant when brokers say 'outperform'. Not 'out perform those downgrades', coz that would be contradictory.

[X-men]

Outperform: Also known as "moderate buy," "accumulate," and "overweight." Outperform is an analyst recommendation meaning a stock is expected to do slightly better than the market return.


https://www.nzherald.co.nz/nz/new-zealand-and-auckland-house-prices-analyst-corelogic-says-downturn-is-officially-over/HDDXRPITOFC4XGDFDG627DMMZM/

[bull....]

I would have thought the commentary meant they will outperform the market. That what is usually meant when brokers say 'outperform'. Not 'out perform those downgrades', coz that would be contradictory.

lets hope the market is not down 20% next yr

[SailorRob]

lets hope the market is not down 20% next yr

Why on earth would we hope that??

We want to hope prices are not 20% cheaper next year??

Surely for someone like yourself with a chat gtp guru trading system that would scream opportunity.

[bull....]

Why on earth would we hope that??

We want to hope prices are not 20% cheaper next year??

Surely for someone like yourself with a chat gtp guru trading system that would scream opportunity.

you must be the only OCA stock holder ive ever heard off that wants the stock price to keep getting lower lol

[SailorRob]

you must be the only OCA stock holder ive ever heard off that wants the stock price to keep getting lower lol

Lol lol lol

You know any OCA stock holders who would want all other stock holders to give them their shares for free?

I'd say 100% of OCA stock holders would want that to happen.

So what are you on about lolllll.

[winner69]

Ha ha ……Forbar selling more shares than buying

Good story …but inconsequential at end of day ..bit of housekeeping ..but CEASING TO BE A SSH is big news


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/420907/406276.pdf

[X-men]

That why I called the broker a crook...for thier credibility

[thebusinessman]

Ha ha ……Forbar selling more shares than buying

Good story …but inconsequential at end of day ..bit of housekeeping ..but CEASING TO BE A SSH is big news


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/420907/406276.pdf

Is there an advantage to them remaining under the 5% threshold?

[Lego_Man]

Ha ha ……Forbar selling more shares than buying

Good story …but inconsequential at end of day ..bit of housekeeping ..but CEASING TO BE A SSH is big news


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/420907/406276.pdf

I wouldn't read too much into it. I believe this is more to do with managed portfolio liquidations as clients across the country grow sceptical of NZ equities and withdraw money to sit on the sidelines and get a decent passive interest rate. Explains some of the odd price action in a lot of stocks. Noone is buying right now.

[winner69]

Is there an advantage to them remaining under the 5% threshold?

No

They will no doubt have to file a Beginning to have a SSH soon

Paperwork when you hold about 5%

I said ha ha because Rob asked who’d be selling …only idiots

[SailorRob]

No

They will no doubt have to file a Beginning to have a SSH soon

Paperwork when you hold about 5%

I said ha ha because Rob asked who’d be selling …only idiots

For bar, the smartest of the smart.

Only an index fund would be cleverer.

[ronaldson]

A move from 5.015% holding to 4.963% is hardly BIG NEWS. More interesting is that the sell trades were at an average of $0.74.07c and the buy trades were $0.69.6c all in the span of 6 Sept to 31 Oct.

Good trading in my view.

[winner69]

A move from 5.015% holding to 4.963% is hardly BIG NEWS. More interesting is that the sell trades were at an average of $0.74.07c and the buy trades were $0.69.6c all in the span of 6 Sept to 31 Oct.

Good trading in my view.

Headline is DRAMATIC though isn’t it

Be exciting when they become a SSH (again) ….always a good sign

[winner69]

Wonder how a rights issue at say 1 for 1 at 50 cents would go down

[Leemsip]

Wonder how a rights issue at say 1 for 1 at 50 cents would go down

Glad you brought that up again Winner.

[bottomfeeder]

Wonder how a rights issue at say 1 for 1 at 50 cents would go down

Market goes down on rumour and up on fact. Thanks for nothing.

[Baa_Baa]

Wonder how a rights issue at say 1 for 1 at 50 cents would go down

Can you explain why you keep banging the 'raising' drum, are OCA cash strapped or need to pay down debt, or something else? I think they've been very clear about no need to raise capital, medium term debt at very favourable interest rates, continuing development with a revised profile, new properties coming on market, non-strategic properties sell down ... did I miss something?

[winner69]

Can you explain why you keep banging the 'raising' drum, are OCA cash strapped or need to pay down debt, or something else? I think they've been very clear about no need to raise capital, medium term debt at very favourable interest rates, continuing development with a revised profile, new properties coming on market, non-strategic properties sell down ... did I miss something?

Debt getting to ‘elevated’ levels …..and market per se doesn’t like that …..and the old we have ‘no need to raise capital’ saying is often code for an impending capital raise …just like Eroad and Ryman in recent times.

And apparently a few fundie / underwriting types have recently been seen near Oceania HQ

Whatever just pure speculation …..take it or leave it

[bull....]

a garbage truck too apparently

[X-men]

It was the lawyer team...winner....one of the nurses sued the resident for molesting while cleaning his button

[bull....]

be robots in the future


https://www.youtube.com/watch?v=x5kMdEh1v0I

[Rawz]

if there is a cap raise like RYM we shouldnt we see the SP go up to 80-90 cent range so when they raise at 60 cents it seems like a great deal.

[ronaldson]

Can you explain why you keep banging the 'raising' drum, are OCA cash strapped or need to pay down debt, or something else? I think they've been very clear about no need to raise capital, medium term debt at very favourable interest rates, continuing development with a revised profile, new properties coming on market, non-strategic properties sell down ... did I miss something?

Perhaps the reality is that the non-strategic properties are NOT selling down.

My recollection is that no listed entity has announced an actual sale so far this year, although plenty are said to be "held for sale".

This will become clearer with admissions that will have to be made at the half year reporting due this month. Then the question will become, if any were shifted, at what discount was that to the sum they were "on the books".

This could lead to several operators having to book reductions in value for your basic aged care facilities on a much wider basis.

[winner69]

Perhaps the reality is that the non-strategic properties are NOT selling down.

My recollection is that no listed entity has announced an actual sale so far this year, although plenty are said to be "held for sale".

This will become clearer with admissions that will have to be made at the half year reporting due this month. Then the question will become, if any were shifted, at what discount was that to the sum they were "on the books".

This could lead to several operators having to book reductions in value for your basic aged care facilities on a much wider basis.

I keep waiting for such announcements as well ….so far non eh

OCA have $100m plus a bit as held for sale …..they won’t get $100m as residents loans attached are about $50m …OCA gets $50m

Jeez if they had to accept say 25% less for them that only brings in $25m for them

But new government seems to see overall business confidence improving so there might be some outfits out there more comfortable / inclined to buy these villages ……no worries

[SailorRob]

Can you explain why you keep banging the 'raising' drum, are OCA cash strapped or need to pay down debt, or something else? I think they've been very clear about no need to raise capital, medium term debt at very favourable interest rates, continuing development with a revised profile, new properties coming on market, non-strategic properties sell down ... did I miss something?

Absolute opposite of 'winner' whatever that is. The line about people seen near HQ, classic.

Man some desperate people out there who have figured out that their investing genius was actually just interest rates pinned at 5000 year lows for a decade...

[Baa_Baa]

Absolute opposite of 'winner' whatever that is. The line about people seen near HQ, classic.

Man some desperate people out there who have figured out that their investing genius was actually just interest rates pinned at 5000 year lows for a decade...

Most people seem focused solely on the share price. There were only 18 days that the share price was at or below today's price, during the Covid crash. But, there were millions of shares traded during those 18 days, so it stands to reason that there are still millions of shares still 'in the money' purely on capital price. Maybe it's them feeding the Ask as their capital profits keep falling? Meanwhile, there's many many more millions of shares that have traded above today's price and they're all under water now. So for most of those who focus solely on share price, it must be pretty painful.

These low share prices are just the bomb for long term investors though, patiently waiting for the next DRP accumulating at almost a third of the share price highs. The icing on the cake would be a massive share buyback by the company. I don't expect share price watchers and traders to be in agreement as their 'investment' thesis is probably quite different and likely a lot less time horizon.

[SailorRob]

Most people seem focused solely on the share price. There were only 18 days that the share price was at or below today's price, during the Covid crash. But, there were millions of shares traded during those 18 days, so it stands to reason that there are still millions of shares still 'in the money' purely on capital price. Maybe it's them feeding the Ask as their capital profits keep falling? Meanwhile, there's many many more millions of shares that have traded above today's price and they're all under water now. So for most of those who focus solely on share price, it must be pretty painful.

These low share prices are just the bomb for long term investors though, patiently waiting for the next DRP accumulating at almost a third of the share price highs. The icing on the cake would be a massive share buyback by the company. I don't expect share price watchers and traders to be in agreement as their 'investment' thesis is probably quite different and likely a lot less time horizon.

That 18 day point is a great statistic.

Once the share price goes back up through $1.50 everyone will be happy and start buying again, when it hits $2 those who bought at $1.50 will feel great. But buying at 67 cents fills them with dread.

[SailorRob]

Particularly when it comes to investing, there's nowt so queer as folk.

[Baa_Baa]

Particularly when it comes to investing, there's nowt so queer as folk.

A nice adage to bring up in the current circumstances. I think it polarises the differences between the various 'investment' vs trading strategies people have here. Along with your observation that for some people buying now is somehow, not better than buying when it is double the price! Go figure!

Translated, the saying means "there is no rhyme or reason for why people do things"

[SailorRob]

A nice adage to bring up in the current circumstances. I think it polarises the differences between the various 'investment' vs trading strategies people have here. Along with your observation that for some people buying now is somehow, not better than buying when it is double the price! Go figure!

Translated, the saying means "there is no rhyme or reason for why people do things"

There's nothing as strange as people. This phrase is typically used to emphasize someone's particularly odd behavior.

("Nowt" is a Northern English variation on "naught.")

Whenever someone does something really bizarre, I remind myself that there's nowt so queer as folk.

[bull....]

A nice adage to bring up in the current circumstances. I think it polarises the differences between the various 'investment' vs trading strategies people have here. Along with your observation that for some people buying now is somehow, not better than buying when it is double the price! Go figure!

Translated, the saying means "there is no rhyme or reason for why people do things"

in relation to your quote
yes i still dont understand why you didnt sell at well over a dollar. not only have you missed out on all that capital gain but now your dividends are declining as well.
you could even end up back at square one and wasted 6 yrs of your life by not reading the landscape correctly. great investment

[ValueNZ]

in relation to your quote
yes i still dont understand why you didnt sell at well over a dollar. not only have you missed out on all that capital gain but now your dividends are declining as well.
you could even end up back at square one and wasted 6 yrs of your life by not reading the landscape correctly. great investment
Us mere mortals don't have your market timing abilities bull.

Have you actually gone through Oceania's annual reports? What the market is telling us is that OCA is worth less now than when it first IPO'd, despite the explosion of properties owned with debt being utilised at free or very low rates. I call BS, there is no way this company is worth under $500 million.

[ValueNZ]

Debt getting to ‘elevated’ levels …..and market per se doesn’t like that …..and the old we have ‘no need to raise capital’ saying is often code for an impending capital raise …just like Eroad and Ryman in recent times.

And apparently a few fundie / underwriting types have recently been seen near Oceania HQ

Whatever just pure speculation …..take it or leave it
Can you do some proper FA to back up your capital raise claim please.

[SailorRob]

in relation to your quote
yes i still dont understand why you didnt sell at well over a dollar. not only have you missed out on all that capital gain but now your dividends are declining as well.
you could even end up back at square one and wasted 6 yrs of your life by not reading the landscape correctly. great investment


Hard to understand why you didn't short sell at well over a dollar, you must be a total fool considering your ability to read the landscape and not act on what you knew was coming.

A fool or a liar or likely a combination.

[Ggcc]

in relation to your quote
yes i still dont understand why you didnt sell at well over a dollar. not only have you missed out on all that capital gain but now your dividends are declining as well.
you could even end up back at square one and wasted 6 yrs of your life by not reading the landscape correctly. great investment
I for one sold lots roughly around $1.50. In hindsight this was more luck than anything to buy a house. I understand what Baa baa is getting at, as if you feel a share is undervalued you will buy more and sell once they rise. OCA will rise at some stage, but when no one will know.

I sold the remainder of my OCA at 77 cents to buy TSK which I felt was way undervalued and I felt had more of a chance of doubling than OCA.
Of course that is a calculated guess and only not fact. No rhyme and limited reason.

I feel unless interest rates drop, inflation is under control and government increases funding enough to all villages, that all retirement villages will struggle with their SP for the next couple of years

[bull....]

Hard to understand why you didn't short sell at well over a dollar, you must be a total fool considering your ability to read the landscape and not act on what you knew was coming.

A fool or a liar or likely a combination.

your statement is foollish as if you did some home work you would know retail people's cannot short oca. it is well documented on this thread my negative thought's a yr or more ago on the macro fundamental's for this company becoming headwind's.
as with all investors we make assumption's and place our bets and eventually we find out who is right and who is wrong. end of story

[bull....]

Us mere mortals don't have your market timing abilities bull.

Have you actually gone through Oceania's annual reports? What the market is telling us is that OCA is worth less now than when it first IPO'd, despite the explosion of properties owned with debt being utilised at free or very low rates. I call BS, there is no way this company is worth under $500 million.

dint need market timing skill's its called reading the macro environment and making assumptions to put in your model. as a value investor yourself i am very surprised you dont understand tyhis concept

[bull....]

I for one sold lots roughly around $1.50. In hindsight this was more luck than anything to buy a house. I understand what Baa baa is getting at, as if you feel a share is undervalued you will buy more and sell once they rise. OCA will rise at some stage, but when no one will know.

I sold the remainder of my OCA at 77 cents to buy TSK which I felt was way undervalued and I felt had more of a chance of doubling than OCA.
Of course that is a calculated guess and only not fact. No rhyme and limited reason.

I feel unless interest rates drop, inflation is under control and government increases funding enough to all villages, that all retirement villages will struggle with their SP for the next couple of years

i think your comments are very sensible and realistic. nobody know's the future

[winner69]

Can you do some proper FA to back up your capital raise claim please.

Plenty of proper FA stuff on this thread …..along with that and ‘the ability to read the landscape’ a cap raise is very likely eh ….. and if they don’t understand that I remind myself that ‘there's nowt so queer as folk’.

Cheers

[ValueNZ]

Plenty of proper FA stuff on this thread …..along with that and ‘the ability to read the landscape’ a cap raise is very likely eh ….. and if they don’t understand that I remind myself that ‘there's nowt so queer as folk’.

Cheers
"The ability to read the landscape" translates to "I have no evidence to substantiate my claim".

The next time I see a post of yours suggesting a capital raise is necessary or likely, I want to see some evidence.

[ValueNZ]

dint need market timing skill's its called reading the macro environment and making assumptions to put in your model. as a value investor yourself i am very surprised you dont understand tyhis concept
Reading, or predicting? I have no predictive abilities about the direction of the property market, nor do I believe it to be particularly relevant in OCA's future cash flows.

[Bjauck]

There's nothing as strange as people. This phrase is typically used to emphasize someone's particularly odd behavior.

("Nowt" is a Northern English variation on "naught.")

Whenever someone does something really bizarre, I remind myself that there's nowt so queer as folk. My Irish relative used the expression “they’re queerer than the little/diddy people” (little people = leprechauns.)

[SailorRob]

your statement is foollish as if you did some home work you would know retail people's cannot short oca. it is well documented on this thread my negative thought's a yr or more ago on the macro fundamental's for this company becoming headwind's.
as with all investors we make assumption's and place our bets and eventually we find out who is right and who is wrong. end of story

My god you are an amateur. I could borrow a million shares of OCA within 24 hours, if you can post collateral and pay appropriate rate, it's very easy. Contact any serious broker or just ask around.

I'll lend you all my shares Monday morning, direct message me.

Unreal you so clueless.

[bull....]

My god you are an amateur. I could borrow a million shares of OCA within 24 hours, if you can post collateral and pay appropriate rate, it's very easy. Contact any serious broker or just ask around.

I'll lend you all my shares Monday morning, direct message me.

Unreal you so clueless.

lol you continue to show your lack of skill's. while what you say is possible f you have the appropriate legal documentation , how many people in NZ lend there share's to another individual in reality. very few if any i would say and if any did even your million share's would hardly move the price of the stock over time in consideration of the volumes which flow each day in this stock.
keep trying your hole gets bigger by the minute lol

[SailorRob]

lol you continue to show your lack of skill's. while what you say is possible f you have the appropriate legal documentation , how many people in NZ lend there share's to another individual in reality. very few if any i would say and if any did even your million share's would hardly move the price of the stock over time in consideration of the volumes which flow each day in this stock.
keep trying your hole gets bigger by the minute lol

Moving the price of the stock?? Who was talking about that?

[bull....]

Moving the price of the stock?? Who was talking about that?

so your under water on a million share's. no wonder you get upset with winner and me

[Greekwatchdog]

so your under water on a million share's. no wonder you get upset with winner and me

Hey Bull, correct me if I am wrong, but surely you would only count your coin once you sell your shares. Every investor has a different Philosophy but always looks for the same result in making money regardless of their respective Investing Philosophy.

[ValueNZ]

so your under water on a million share's. no wonder you get upset with winner and me
He said he could borrow a million shares, not that he did borrow a million shares.

Ladies and gentlemen this is a good representation of your average market participant. No wonder OCA is trading at ~70c.

[ValueNZ]

lol you continue to show your lack of skill's. while what you say is possible f you have the appropriate legal documentation , how many people in NZ lend there share's to another individual in reality. very few if any i would say and if any did even your million share's would hardly move the price of the stock over time in consideration of the volumes which flow each day in this stock.
keep trying your hole gets bigger by the minute lol
If you were as confident in your analysis as you say you were, then you would have made the effort to try borrow shares to sell.

[bull....]

Hey Bull, correct me if I am wrong, but surely you would only count your coin once you sell your shares. Every investor has a different Philosophy but always looks for the same result in making money regardless of their respective Investing Philosophy.

your correct only matters when you sell. only problem is the cost of time

[bull....]

If you were as confident in your analysis as you say you were, then you would have made the effort to try borrow shares to sell.

lol i sold and made money well over a dollar. so yes i was very confidant in my analysis. i would never short a stock in NZ no liquidity to out , its bad enough trying to buy enough volume in some stocks.

[bull....]

He said he could borrow a million shares, not that he did borrow a million shares.

Ladies and gentlemen this is a good representation of your average market participant. No wonder OCA is trading at ~70c.

yes but sailor has also said he own's alot of oca so i just guessed he owned the million.

[winner69]

yes but sailor has also said he own's alot of oca so i just guessed he owned the million.

…probably a million and more

Question ….if shares are lent to be shorted and they and they have a rights issue who can take the rights up …or do the participants just ignore it

[Balance]

…probably a million and more

Question ….if shares are lent to be shorted and they and they have a rights issue who can take the rights up …or do the participants just ignore it

In the event of corporate action (capital raising, dividends, takeover etc), shorts have to be closed out.

One of the risks of shorting.

[SailorRob]

In the event of corporate action (capital raising, dividends, takeover etc), shorts have to be closed out.

One of the risks of shorting.

It would depend on the contract you had entered into.

Shorts have to be closed out for a dividend?? Interesting.

[Balance]

It would depend on the contract you had entered into.

Shorts have to be closed out for a dividend?? Interesting.

Standard term in shorting contracts with broking firms with shorting facility in my experience.

[SailorRob]

Standard term in shorting contracts with broking firms with shorting facility in my experience.

Must be a NZ thing.

[Balance]

Must be a NZ thing.

And an Australian thing too.

Difference with ASX is of course a very deep & liquid options market so one can simply buy put options or sell call options to short stocks. Easy as - no margin calls or corporate actions to worry about.

[Bjauck]

My god you are an amateur. I could borrow a million shares of OCA within 24 hours, if you can post collateral and pay appropriate rate, it's very easy. Contact any serious broker or just ask around.

I'll lend you all my shares Monday morning, direct message me.

Unreal you so clueless.

You are not Donald Trump, are you?