OCA - Oceania Group - retirement villages

[SailorRob]

You are not Donald Trump, are you?

I wish....

[winner69]

Next results announcement only weeks away.

Time to review performance since listing ……these are the headlines over the years:



July 17. Oceania Healthcare exceeds IPO forecasts
Jan 18. Oceania Healthcare doubles profit for half year
July 18. Oceania Healthcare exceeds forecast with strong earnings boost
Jan 19. Oceania Healthcare grows profit for the six months ended 30 November 2018
July 19. Oceania Healthcare reports completion of key development projects and strong sales momentum
Jan 20. Substantial Increase in First Half Unaudited Underlying NPAT* for Oceania Healthcare.
July 20. Oceania Healthcare reports steady underlying earnings for the year despite impacts of COVID-19
Jan 21. Oceania records increase in First Half Unaudited Underlying EBITDA
May 21 Oceania records strong 10 month trading result
Nov 21 Oceania delivers improved performance despite Covid 19
May 22 Oceania positioned for growth
Nov 22. Care Suite premiumisation deliver results
May 23 Oceania delivers solid result

Recent headlines seem to be getting less bullish than previous


Wonder what the Nov 23 headline will be?

[SailorRob]

Next results announcement only weeks away.

Time to review performance since listing ……these are the headlines over the years:



July 17. Oceania Healthcare exceeds IPO forecasts
Jan 18. Oceania Healthcare doubles profit for half year
July 18. Oceania Healthcare exceeds forecast with strong earnings boost
Jan 19. Oceania Healthcare grows profit for the six months ended 30 November 2018
July 19. Oceania Healthcare reports completion of key development projects and strong sales momentum
Jan 20. Substantial Increase in First Half Unaudited Underlying NPAT* for Oceania Healthcare.
July 20. Oceania Healthcare reports steady underlying earnings for the year despite impacts of COVID-19
Jan 21. Oceania records increase in First Half Unaudited Underlying EBITDA
May 21 Oceania records strong 10 month trading result
Nov 21 Oceania delivers improved performance despite Covid 19
May 22 Oceania positioned for growth
Nov 22. Care Suite premiumisation deliver results
May 23 Oceania delivers solid result

Recent headlines seem to be getting less bullish than previous


Wonder what the Nov 23 headline will be?

Files for bankruptcy.

[Valuegrowth]

https://businessdesk.co.nz/company/oceania-healthcare

[winner69]

https://businessdesk.co.nz/company/oceania-healthcare

Sad looking chart ……means you seeing value now and investing for growth?

[Valuegrowth]

Unlike those days I don't buy stocks suddenly. Turnaround situation and future strong balance sheet is a must. I am doing home work these days while searching multibaggers.
Sad looking chart ……means you seeing value now and investing for growth?

[X-men]

Nov 2023 headline

OCA to delist and sell all the assets to pay the poor crying shareholders

[mike2020]

Two articles in my morning email. One tells tales of woe from first home buyers the other suggesting a home deposit of a million in Auckland by 2045 i.e. the continuation of 7 percent pa and the doubling every decade.

[Balance]

Two articles in my morning email. One tells tales of woe from first home buyers the other suggesting a home deposit of a million in Auckland by 2045 i.e. the continuation of 7 percent pa and the doubling every decade.

Opinion from Derek Handley of Snakk fame.

Enuf said.

[Ggcc]

Two articles in my morning email. One tells tales of woe from first home buyers the other suggesting a home deposit of a million in Auckland by 2045 i.e. the continuation of 7 percent pa and the doubling every decade.
2045 minimum wage will be about $80-100 per hour, give or take at this rate.

[Bjauck]

2045 minimum wage will be about $80-100 per hour, give or take at this rate.
Last 20 years have seen cpi prices up 65%; wages up 107%; yet housing is up 285%.


I cannot see much of change in Labour/National policies to change that continued dynamic, although I am not sure about labour productivity gains, with wealth (which in NZ means land ownership) continuing to accumulate at the top of the pyramid. So we are on course for the lucky ones tapping the family trust for help with million dollar deposits.

[bottomfeeder]

Nov 2023 headline

OCA to delist and sell all the assets to pay the poor crying shareholders

Takeover, $1.30 per share

[Baa_Baa]

Takeover, $1.30 per share

Takeover for less than NTA, brilliant for the buyer, but can't see the shareholders agreeing to that.

[ronaldson]

Takeover, $1.30 per share

You must have gotton confused with the Volaris offer for ERD. Outcome would be the same. Not even allowed to do due diligence. Just hope declination not to be followed by a capital raise!

The interesting thing about the NZX listed RV operators is that no one could replicate their land and building assets today from scratch for the value of their shareholder equity. But for aged care rest homes themselves there is apparently currently no market.

[Maverick]

You must have gotton confused with the Volaris offer for ERD. Outcome would be the same. Not even allowed to do due diligence. Just hope declination not to be followed by a capital raise!

The interesting thing about the NZX listed RV operators is that no one could replicate their land and building assets today from scratch for the value of their shareholder equity. But for aged care rest homes themselves there is apparently currently no market.
I can see why you would say there is no market for rest homes but Brent has clearly stated at the AGM that there is " a ready market".
I do get it that there has been no announcement of sales by either OCA or ARV which doesnt inspire confidence and is frustrating. But is a sale "a material announcement "?

Let's say a rest home sells for $10m , that's only the top 2 helier apartment sales added together, which certainly doesn't get a special mention .
We have learned OCA are very unmotivated to tell us anything if they can avoid it. I'm still more than a little grumpy that they never mentioned the flooding issues earlier this year.

So untill we have an update by ARV or OCA about any rest home sales later this month we are in the dark. I'm choosing to accept Brent with his statement above for now. He has been accurate with his statements to date even though conditions have subsequently changed in a few cases. I've no reason to think he has ever exaggerated things.

I'm also a bit ambivalent about rest home sales for now because I believe the recent DHB rises would have been enough to at least bring their profitability to a neutral positon. Even considering a cashflow point of view there is still no hurry to get a deal done

[winner69]

Winton not having much trouble selling luxury retirement apartments



Winton executive director Julian Cook, the former head of retirement giant Summerset, said the company has close to $80 million in sales for Northbrook, with buyers predominantly snapping up two- or three-bedroom apartments "on the northwest corner, as you would expect".

https://businessdesk.co.nz/article/markets/winton-sees-room-for-15-luxury-retirement-developments

[winner69]

Mav said ‘I'm still more than a little grumpy that they never mentioned the flooding issues earlier this year.’

Agree, pretty sober reading in Annual Report about these weather events….hope everybody has read the stories about what the residents did

I see that they booked $10m of insurance income …still pursuing payment as at March 31st …hope it’s all been settled by now

[Greekwatchdog]

So the 22nd for half year result it is. This thread will be the hottest bitch session in town

[winner69]

So the 22nd for half year result it is. This thread will be the hottest bitch session in town

C’mon gwd …Turners on same day …….that’ll be exciting and will distract punters from Oceania

[Balance]

C’mon gwd …Turners on same day …….that’ll be exciting and will distract punters from Oceania

Turners' results are already well signaled? Likely to be slightly better than expected.

Oceania is still to tell shareholders how sales of its much hyped super premium St Helier are going!

[Greekwatchdog]

Turners' results are already well signaled? Likely to be slightly better than expected.

Oceania is still to tell shareholders how sales of its much hyped super premium St Helier are going!

St Helliers will show more in FY than HY. Not expecting anything substantial here.

[X-men]

No news is a good news ..no? 2 weeks to wait.....then OCA will be delisted to pay all the poor crying shareholders

[BlackPeter]

Turners' results are already well signaled? Likely to be slightly better than expected.

Oceania is still to tell shareholders how sales of its much hyped super premium St Helier are going!

Who knows, the chair might announce that, but the CEO might just forget it (happened before :) ;

[bull....]

bit of technical update.
tested the lows of 67 and they have held at this stage. if continue to hold then a larger trading range of 67 - 80c may develop esp if 74 gets taken out. potential double bottom as well.

fundamentally maybe it all depends on there update this mth which way ultimately it runs

[SailorRob]

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


I hope you all did...

[Leemsip]

I did, thanks SR, nice catch on this. Didnt go big enough of course....

[ThaiJohn]

Forsyth Barr just announced an SPH notice.

[winner69]

Forsyth Barr just announced an SPH notice.

Seems to be a regular event …..a week or so they CEASED to be a SSH

Playing around the fringes with clients money …their reports don’t seem to rave about OCA I believe

[winner69]

Westpac says about REINZ data ‘ New Zealand's housing market continued to hold its breath in October with prices tracking sideways and sales still low.”

So Brent will be able to say with a straight face next week that sales have been a bit sluggish and impact our first halfvresult ….but no worries second half will be a ripper

[bottomfeeder]

Westpac says about REINZ data ‘ New Zealand's housing market continued to hold its breath in October with prices tracking sideways and sales still low.”

So Brent will be able to say with a straight face next week that sales have been a bit sluggish and impact our first halfvresult ….but no worries second half will be a ripper
He may be right.

[Lego_Man]

Seems to be a regular event …..a week or so they CEASED to be a SSH

Playing around the fringes with clients money …their reports don’t seem to rave about OCA I believe

I understand OCA is actually their preferred name in the sector. As stated above they're bumping around the SSH threshold due to client transactional activity rather than centralised decisions i think.

[winner69]

Main bit of data from REINZ is the sales volume numbers

Looking more positive at moment ….heading back to more average/normal volumes

Oceania sales volumes should follow

[ValueNZ]

Westpac says about REINZ data ‘ New Zealand's housing market continued to hold its breath in October with prices tracking sideways and sales still low.”

So Brent will be able to say with a straight face next week that sales have been a bit sluggish and impact our first halfvresult ….but no worries second half will be a ripper
As long as OCA's powder keg of sales grows larger I have no problem when it goes off.

[winner69]

Half year result Wednesday

Last year Underlying NPAT was about $28m ……some are hopeful it will be a lot higher this year.

Doesn’t really matter what the number is ….it’s the updated story that’ll matter

[mike2020]

One more lifeless hy so some of us can get a few more isnt the end of the world.

[Rawz]

One more lifeless hy so some of us can get a few more isnt the end of the world.

cant hold enough was the old moto wasnt it?

[Curly]

cant hold enough was the old moto wasnt it?
Got an order in but not likely to go below .70 this side of announcement. One can but hope.

[Greekwatchdog]

cant hold enough was the old moto wasnt it?

Depends on your Investing Philosophy. A long term investor sees it as a win by adding at these prices, whilst watching OCA build more.

Short term Investors and Momentum traders have a different view. Each to there own.

[Rawz]

Depends on your Investing Philosophy. A long term investor sees it as a win by adding at these prices, whilst watching OCA build more.

Short term Investors and Momentum traders have a different view. Each to there own.

first bought 7th Jan 2021 at $1.44. Not sure if i qualify as a long term investor but wish i never had bought lol

[Greekwatchdog]

first bought 7th Jan 2021 at $1.44. Not sure if i qualify as a long term investor but wish i never had bought lol

I have been in since early 2018. Made the most of the sale during early Covid.

You must had had a reason to buy. Athens/Rome were not built in 1 day and nor are OCA villages.

[winner69]

I have been in since early 2018. Made the most of the sale during early Covid.

You must had had a reason to buy. Athens/Rome were not built in 1 day and nor are OCA villages.

Rome wasn't built in a day, but burned in one ……..so take care out there

[mike2020]

It was cant have to many. I did have to many a couple of years ago. Probably the only sensible thing I did around covid. It has always felt very much tied to the residential property market for me.
I looked at a residential retirement development near home Saturday. All new builds. 5% per year up to 25% retention in the 5th year which seemed fair if you were unlucky enough to be short term. I was quite surprised at the asking prices. More or less as much as a new house in the same area on a reasonable section.

[Greekwatchdog]

Rome wasn't built in a day, but burned in one ……..so take care out there

Clever W69. I note despite many people trying to take over Athens it still stands, so not everything burns in 1 day. Besides OCA has better fire protocols than our Ancient friends.

[Daytr]

This could hurt.

https://www.nzherald.co.nz/brand-insight/fair-retirement-villages-penalised/TJ2SHV6MWVCSBJCLPXHJIZHK5Y/?utm_medium=Social&utm_campaign=nzh_fb&utm_source=Facebook&fbclid=IwAR3bFijL98braOVSu-XB8sZBOS0UjvDyU-fcC7X5e4vr0zx_weLtjYMfQ2M_aem_AbGMcS4jdGiIWx5LCDAF sYgULkQMTk3rkmPO7oskL4nRHBmbBeiZ_CLIJgJSPXHyAgSSQx 2u2rcRoXnwf4eIEfZj#Echobox=1700440921

[winner69]

Maybe tomorrow is going to a case of Believe in Better

[winner69]

Guy from Jarden says Arvida and Oceanía's dividends as unsustainable, even though both companies “cut their full-year 2023 dividends meaningfully from full-year 2022 levels.”

Be interesting what OCA say tomorrow about dividends ……suspend them maybe, surely not.

[ValueNZ]

Guy from Jarden says Arvida and Oceanía's dividends as unsustainable, even though both companies “cut their full-year 2023 dividends meaningfully from full-year 2022 levels.”

Be interesting what OCA say tomorrow about dividends ……suspend them maybe, surely not.
I'm not even sure that they should have been paying dividends to begin with anyway. If a dollar of retained earnings in OCA creates more than a dollar of shareholder value in present value terms, I'd suggest dividends shouldn't be paid out.

Considering OCA's rapid growth as a company I'm pretty sure that would be the case, but it would be interesting to hear what others think anyway.

[Antipodean]

As a holder, 100% OCA should suspend dividends. Possibly should have for the last year or two and likely for another year or two. Use it to pay down debt or expansion as appropriate. Much more effective and better for long term prospects of the company.

[bull....]

dont think they cut div entirely but another decline in div payout a possibility.
i agree with others though should cut the div entirely

[Rawz]

I'm not even sure that they should have been paying dividends to begin with anyway. If a dollar of retained earnings in OCA creates more than a dollar of shareholder value in present value terms, I'd suggest dividends shouldn't be paid out.

Considering OCA's rapid growth as a company I'm pretty sure that would be the case, but it would be interesting to hear what others think anyway.

what rapid growth are you talking about??

[Rawz]

dont think they cut div entirely but another decline in div payout a possibility.
i agree with others though should cut the div entirely

this is why SRob's theory on stock prices going down = good, is a load of crap. he assumes you can just reinvest the dividend but the truth is the sp goes down when a company doesnt perform and the dividend is always reduced or cut.

[bull....]

this is why SRob's theory on stock prices going down = good, is a load of crap. he assumes you can just reinvest the dividend but the truth is the sp goes down when a company doesnt perform and the dividend is always reduced or cut.

yep your right , but if it works for him good but not for me.

[ValueNZ]

what rapid growth are you talking about??
The rapid expansion of the balance sheet which will eventually materialise and produce a lot of cash for shareholders as a % of equity.

Just read the financial statements over the life of the company and you'll see what I'm talking about.

[ValueNZ]

this is why SRob's theory on stock prices going down = good, is a load of crap. he assumes you can just reinvest the dividend but the truth is the sp goes down when a company doesnt perform and the dividend is always reduced or cut.
The argument is that the share price falling whilst the fundamentals of the business are held constant is a good thing. Not a falling share price due to declining fundamentals.

[Rawz]

The rapid expansion of the balance sheet which will eventually materialise and produce a lot of cash for shareholders as a % of equity.

Just read the financial statements over the life of the company and you'll see what I'm talking about.

are you talking about book value per share? it barely increased 50% over the last 5 years. i wouldnt call that rapid growth

[Balance]

Guy from Jarden says Arvida and Oceanía's dividends as unsustainable, even though both companies “cut their full-year 2023 dividends meaningfully from full-year 2022 levels.”

Be interesting what OCA say tomorrow about dividends ……suspend them maybe, surely not.

Cutting dividends is normally the very last resort when the banks are in control?

But then, OCA has been paying dividends using debt so at a point the banks are going to say enough until operating cash flow start to cover dividends.

[ValueNZ]

are you talking about book value per share? it barely increased 50% over the last 5 years. i wouldnt call that rapid growth
No I think book value is a largely irrelevant factor. Look at their asset growth of investment properties/retirement villages, and how that's been financed.

If Oceania can continue growing it's asset base at a similar rate to the past and make even just small returns on capital then Oceania shareholders will do very well.

[Jenny Ruth]

Hi, I wrote about this in my latest Substack, Just the Business. Arie Dekker at Jarden thinks Oceania needs to address its dividend problem. Also at the other retirement village stocks. It's still free to read here: https://justthebusinessjennyruth.substack.com/p/infratils-retireaustralia-devaluation

[Balance]

Hi, I wrote about this in my latest Substack, Just the Business. Arie Dekker at Jarden thinks Oceania needs to address its dividend problem. Also at the other retirement village stocks. It's still free to read here: https://justthebusinessjennyruth.substack.com/p/infratils-retireaustralia-devaluation

Thanks Jenny.

Good summary of where the market currently sees the RV sector.

[kiora]

Hi, I wrote about this in my latest Substack, Just the Business. Arie Dekker at Jarden thinks Oceania needs to address its dividend problem. Also at the other retirement village stocks. It's still free to read here: https://justthebusinessjennyruth.substack.com/p/infratils-retireaustralia-devaluation

Thanks Jenny.
Well written & informative

[SailorRob]

No I think book value is a largely irrelevant factor. Look at their asset growth of investment properties/retirement villages, and how that's been financed.

If Oceania can continue growing it's asset base at a similar rate to the past and make even just small returns on capital then Oceania shareholders will do very well.

Exactly. Book value is virtually meaningless here.

[SailorRob]

this is why SRob's theory on stock prices going down = good, is a load of crap. he assumes you can just reinvest the dividend but the truth is the sp goes down when a company doesnt perform and the dividend is always reduced or cut.

Warren's fact not SR theory.

You totally and utterly miss the point here.

Once I get my hands on a laptop I'll destroy you properly.

Jennys article possibly missed the point even more than you do.

[Rawz]

Warren's fact not SR theory.

You totally and utterly miss the point here.

Once I get my hands on a laptop I'll destroy you properly.

Jennys article possibly missed the point even more than you do.

just keep calm in your reply and no drinking the rumbos before you start typing :p

[Maverick]

Tomorrow is a huge day , much more than other HY reports. It will be the measure needed to more accurately quantify and prove the potential good years ahead.

For those interested here is what I am looking for and why;
1.Apartment resales is a big deal. There should be a nice uptick given large numbers of new sales 5-6 years ago that should be starting to churn . These deliveries now have waiting lists. Perhaps a sudden jump as high as 33 apartment resales this time is possible , this would be a strong positive indicator. If this is in the ball park that proves significant COMPOUNDING GROWTH has begun its ascent.
2. Care profit growth with PAC/ DMF stripped out should show improvement. This will be due to increased DHB funding for 3 months of this period and lesser covid costs. Perhaps $1-$1.5m. Whatever the result is will offer a measure of the latest rates that actually get to the bottom line.
3. Any village divestments. Helpfull but not massively important to the main model but more so to revaluations. Ronaldson has covered this well.
4. Care suites resales and to a lesser extent, new c sales, should be now showing solid number improvement and good occupancy now NZ borders are open and fuller staffing is now allowing more residents in.

Of course the usual growth in DMF , expenses and margins etc are all important too but these are pretty predictable by now.

For me , Helier new sales are immaterial (model wise)at this stage as these new behemoths start painfully slow until momentum builds. All RV operators who deliver a large empty block suffer from this not just OCA.
ARV's newly delivered Aria appears almost empty. It will be feeling the pain now at Browns Bay in a sub optimal spot while 5 yr old “The Sands” around the corner on the beach front now enjoys full occupancy. It has now completed its own painfull start. New MET delivery in Hobson point…same process.
Personally, I expect Brent to try and dodge comment on Helier as it is likely to just spook the listeners at this stage of the sell down.

New apartment sales will be low, say 31-36. NZ house just didnt sell well over this period. Not an apartment nor OCA specific issue. Yes a nuisance but not a long term biggie as things now start moving again.

I have also been observing some new MET and SUM big block apartment deliveries and it is clear the demand for apartments is unwavering as long as the normal pattern of sell downs is considered.

Of course there are always surprises but to put a number on it….
I'm Picking a Uprofit of +15% to +20%ish tomorrow.

BTW, any info I scratch together for my work takes effort to get. To their credit , OCA are incredibly strict and tight-lipped. I am certain the analysts get no more insights either and dont have time for the foot work. So when an analyst offers an opinion they are doing good work albeit with very incomplete information.

Tomorrows result should be pretty good on the bottom line but the clues outlined above is what really counts. They will be the proof and drivers of what should be substantial profit growth over the next years onwards should they be achieved to satisfaction.

I'm travelling the rest of the week so my silence doesnt mean I'm sulking in a cave somewhere if things dont go so well.

[SailorRob]

just keep calm in your reply and no drinking the rumbos before you start typing :p

Ok no worries. Need to get my laptop off nz post first. That's another topic. Day Traders SOE... and some other moron posted that they are run like private companies... Well bloody hell.

[Jenny Ruth]

Thanks. A report by Stephen Ridgewell at Craigs Investment Partners on the retirement sector landed on my desk after I published my column this morning so I've made a bonus post on my Substack, Just the Business, because Ridgewell's reports are always well worth reading.
You can find it here: https://justthebusinessjennyruth.substack.com/p/expect-quite-awful-retirement-stock

[bull....]

Thanks. A report by Stephen Ridgewell at Craigs Investment Partners on the retirement sector landed on my desk after I published my column this morning so I've made a bonus post on my Substack, Just the Business, because Ridgewell's reports are always well worth reading.
You can find it here: https://justthebusinessjennyruth.substack.com/p/expect-quite-awful-retirement-stock

The retirement village companies will be reporting “quite awful” first-half results this week and next, according to Craigs Investment Partners analyst Stephen Ridgewell.

https://justthebusinessjennyruth.substack.com/p/expect-quite-awful-retirement-stock

i find your articles well written

[winner69]

Another pecking order and again Oceania is at the bottom

From that Craig’s guy

Summerset is his top pick, followed by Arvida and then Ryman, recommending “overweight” positions in all three, while he rates Oceania “neutral,” mainly because of its heavy exposure to care, the relative age of its facilities and poor sales leading to an inventory build-up.

[winner69]

The retirement village companies will be reporting “quite awful” first-half results this week and next, according to Craigs Investment Partners analyst Stephen Ridgewell.

https://justthebusinessjennyruth.substack.com/p/expect-quite-awful-retirement-stock

i find your articles well written

“Awful” is ominious sounding

Hope Mav is right with his profit forecast of +20%

[Muse]

Hi, I wrote about this in my latest Substack, Just the Business. Arie Dekker at Jarden thinks Oceania needs to address its dividend problem. Also at the other retirement village stocks. It's still free to read here: https://justthebusinessjennyruth.substack.com/p/infratils-retireaustralia-devaluation

Arie has been a thought leader on the RV and aged care industry of late. Particularly around covenants, widespread information gaps coming out of the industry, and questioning the credibility and usefulness of the underlying earnings standard adopted by the industry.

https://www.nzshareholders.co.nz/scrip-article/are-retirement-operators-pulling-the-wool-over-our-eyes/

[SailorRob]

Arie has been a thought leader on the RV and aged care industry of late. Particularly around covenants, widespread information gaps coming out of the industry, and questioning the credibility and usefulness of the underlying earnings standard adopted by the industry.

https://www.nzshareholders.co.nz/scrip-article/are-retirement-operators-pulling-the-wool-over-our-eyes/

Maybe one day he will be able to invest his own capital and earn a return suitable to fund his lifestyle from his analysis.

[Greekwatchdog]

Good luck to all your shareholders out there tomorrow ahead of half year. Remember everyone investor has there own Philosophy so lets keep the pot shots to a minimum and discuss like adults.

[Rawz]

And just remember it’s only money. As long as you can buy some fish n chips and watch the kids grow up it’s all good

[limmy]

first bought 7th Jan 2021 at $1.44. Not sure if i qualify as a long term investor but wish i never had bought lol
First bought in April 2021 @ $1.05. Wish I had not bought also.

[ralph]

First bought in April 2021 @ $1.05. Wish I had not bought also.
I can join that ranks comrades it's never good juggling falling Sharpe objects .
Got sucked in by the N T A .lets hope for a decent eps tomorrow should be 7 - 10 eps !!!to keep its value at 70 cps just my opinion :D

[Bjauck]

Good luck to all your shareholders out there tomorrow ahead of half year. Remember everyone investor has there own Philosophy so lets keep the pot shots to a minimum and discuss like adults. Just not like the adults in the Holy Lands?

[Greekwatchdog]

22/11/2023, 8:30 am HALFYR
OCEANIA CONTINUES THE TRANSFORMATION OF ITS PORTFOLIO


Oceania today announced unaudited Underlying Earnings before interest, tax, depreciation and amortisation (u/EBITDA1) of $37.6m for the six months ended 30 September 2023.


Highlights
• Total assets increased to $2.7bn, a 6% increase since 31 March 2023 which includes the completion of 17 apartments at The Helier (Auckland), 46 apartments at The Bellevue Stage Two (Christchurch) and four villas at Stoke Village (Stoke) plus the acquisition of adjacent parcels of land at our Bream Bay and St Heliers sites.
• Net assets increased to $1.0bn from $962.3m as at 31 March 2023.
• Operating cashflow increased to $48.0m for the six months to 30 September 2023, 53% above pcp.
• Undrawn net debt headroom of $113.9m and gearing of 37.7%, as at 30 September 2023.
• Total sales volumes were up 13% ahead on pcp including a 38% uplift in new sale volumes of 84 independent living units (ILU) and care suites.
• Divested, closed and exited leasehold interests at six care centres and villages.


30 September 2023 unaudited GAAP statutory measures 6 months vs 6 months
$m’s 6 months to
30 September 6 months to
30 September Growth
2023 2022 $m %
Operating Revenue 131.6 122.1 9.5 8%
Reported NPAT 35.2 11.2 24 214%
Operating Cashflow 48.0 31.4 16.6 53%
Dividend (cents per share) nil 1.9
$m’s As at
30 September As at
31 March Growth
2023 2023 $m %
Total Assets 2,689.8 2,544.9 144.9 5.7%
Net Assets 1,017.3 962.3 55.0 5.7%


30 September 2023 unaudited non-GAAP1 trading measures 6 months vs 6 months
$m’s 6 months to
30 September 6 months to
30 September Growth
2023 2022 $m %
Underlying EBITDA 37.6 38.7 (1.1) (2.7%)
Underlying NPAT 27.4 27.8 (0.4) (1.4%)
Sales Volume 255 226 29 13%
Occupancy % 90.3% 91.0%


1 Underlying NPAT is a non-GAAP (unaudited) financial measure and differs from Reported NPAT by replacing the unrealised fair value adjustment in property values with the Board’s estimate of realised components of movements in investment property value and to eliminate other unrealised, deferred tax and one-off items. A reconciliation is included within the Interim Report and the Investor Presentation.


Oceania’s unaudited underlying EBITDA was $37.6m for the six month period ended 30 September 2023 (1HY2024).


Oceania has continued to transform its property portfolio with significant capital investment and site divestments and closures, with total assets now $2.7bn, representing 6% growth since 31 March 2023. The increase includes the acquisition of adjacent parcels of land at our Bream Bay and St Heliers sites. Further increase has arisen from the positive fair value movements of $61.6m and other development spend during the period.


CEO Brent Pattison said “Our development portfolio has progressed well with a leading portfolio of premium, bespoke and newly developed boutique residences.”


As at 30 September 2023, Oceania had undrawn net debt headroom of $113.9m and gearing of 37.7% representing drawn debt and bonds of $621.4m and $10.3m of cash and is compliant with all bank facility covenants. Oceania CEO, Brent Pattison noted “We have a diversified debt profile with a long dated corporate bond program and a syndicated banking facility which is in place to support the execution of our strategic plan.”


Oceania has divested, closed and exited leasehold interests at six care centres and villages. The sale of two Auckland sites was completed on 29 August 2023 at an amount above independent valuation. We have seven remaining sites held for sale as at 30 September 2023 with carrying valuation of $43.0m net of held for sale ORA liabilities.


Oceania Chair, Liz Coutts said “Oceania recognises the importance of climate resilience in long term value creation and continues to make strides in its climate risk disclosure preparation. With our commitment to setting a science-based greenhouse gas emissions reduction target, we are submitting this target to the SBTi for validation. In the meantime, we continue to progress with steps in our emissions reduction plan to tackle our scopes 1 and 2 emissions.”


The development margin for the period reflects this with a moderation from prior comparative periods of 31.7% to 21.0% in ILU product and 39.0% to 29.9% in our care suite product.
CEO Brent Pattison commented “We have achieved increased sales volumes in the period, particularly in regional locations outside of Auckland. We expect stronger development margins as we sell down our new apartment developments in urban precincts across New Zealand.”


Oceania Chair Liz Coutts advises that “The Directors have resolved not to pay an interim dividend to provide for ongoing investment in Oceania’s growth and portfolio transformation. The Directors will consider a resumption of paying dividends at the next reporting date, after taking into consideration, cash flow, market conditions and growth opportunities.”

[X-men]

No dividend...well at least no CR!!! Lol..

[winner69]

Mav will be gutted…….Underlying Earnings down on same period last year

But the story remains a good one

[winner69]

No dividend...well at least no CR!!! Lol..


Good one mate

[bull....]

No dividend...well at least no CR!!! Lol..

:scared: no dividend , the board made the right tough decision considering there racing to free up badly needed cashflow

[X-men]

2 billions assets....at 1/4 worth of the share price. Might as well sell and delist from NZX and pay all the shareholders at $1

At least market n traders could back off a bit now ... knowing no CR

[bull....]

terrible report anyway like i said mth's ago margin squeeze was coming and in this report you can see it. major margin pressure and high gearing no wonder there cancelling the div and selling of every non core asset they can find :scared:
lucky sales holding up

[Antipodean]

NTA now roughly double the market cap, buying 2 for 1 not bad. Cashflow, debt headroom and gearing showing no need for CR, further boosted by appropriate suspension of dividend. Site sales progressing.

Hardly the horrific update many were putting forth.

[X-men]

Just bad report for bull.....n traders...lol

[winner69]

Big increase in sales not reflected in rather dismal financial performance.

Brett seems to have left out a fair bit if info in presentation that in past been included …hmm

[bull....]

Just bad report for bull.....n traders...lol

sailor rob and value nz should be explaining the value to us of keeping on buying this stock with no div now

[mike2020]

sailor rob and value nz should be explaining the value to us of keeping on buying this stock with no div now

Ah come on, ATM never paid a div in its prime. You must be putting your order in now I suspect.

[Balance]

Mav will be gutted…….Underlying Earnings down on same period last year

But the story remains a good one

Wonder if Craigs & Forbar will now take OCA out of their Income portfolios with no dividends being paid?

[Rawz]

sailor rob and value nz should be explaining the value to us of keeping on buying this stock with no div now

yes their theory that its good for a SP to keep falling so you can use the dividends to buy more and more is going up in smokes.

[Bjauck]

Mav will be gutted…….Underlying Earnings down on same period last year

But the story remains a good one A doubling of the loss from the change in fair values of investment property. As the housing market resumes its skyward trajectory, presumably those losses will transform to revaluation profits.

[Greekwatchdog]

We all knew this was going to be poor/ugly/ not up to investors expectations. I will await the Full Year result before deciding on this investment.

As for the Divvie being canned. Should have happened sooner. Better late than never I guess.

[SailorRob]

NTA now roughly double the market cap, buying 2 for 1 not bad. Cashflow, debt headroom and gearing showing no need for CR, further boosted by appropriate suspension of dividend. Site sales progressing.

Hardly the horrific update many were putting forth.

Wrong.

Float better than equity.

NTA is 4 times stock price.

[Bjauck]

Wonder if Craigs & Forbar will now take OCA out of their Income portfolios with no dividends being paid?
Dividends from OCA should have stopped from Covid onwards. It is not as though they are distributing imputation credits.

[SailorRob]

Idiocy and poor capital allocation for them to ever have paid a dividend.

[X-men]

Well two things the Market should cheer.....no CR and SP is priced 1/4 vs the valuation...2bllions assets

[bull....]

Ah come on, ATM never paid a div in its prime. You must be putting your order in now I suspect.

market already expected crap result so not looking at it today

[Antipodean]

Wrong.

Float better than equity.

NTA is 4 times stock price.

NTA <> Total Assets

1.40 (NTA) is roughly double .70 (sp)

[nztx]

Dividends from OCA should have stopped from Covid onwards. It is not as though they are distributing imputation credits.


I wonder how many investors are looking at this sector from an Income perspective - money on deposit V dividends on shares now in tougher times ?

[dabsman]

Got to be a takeover target now? Maybe a Summerset or Ryman could take them out a $1? Great complimentary offering for Summerset you'd think. Run out of runway in your villa then move into OCA care?

[bottomfeeder]

No dividend...well at least no CR!!! Lol..
Rather have no dividend than a CR. Mind you OCA is a good place now to place your free cash, with the uncertainty and inflationary aspects of the economy.

There are positives. Not all bad news.

1. There is no fire sale of surplus assets, at least not yet.
2. Even though the SP dropped by a few cents today, the no dividend should have been factored into the SP already.
3. More than likely a dividend will be paid as a final dividend..
4. NTA of double SP. With construction inflation so high, OCA will keep retaining an increasing value.
5. A sale of any surplus assets will definitely point to a future dividend.
6. Charges and earnings will catch up with the value of assets in future periods. After all the sector is not a charity, or a not for profit.

But annoyed that the continuation of this company should be for the benefit of shareholders, not residents and the elderly. We have these investments for investment returns and the Directors have lost their focus. Growth is good but not at the expense of investment returns to shareholders.
Lastly who buys shares in companies that have a NTA less than market cap at an SP that is at is zenith while paying a dividend. There is a potential for failure as well.

The best shares to buy are profitable companies, with excess NTA over market cap, with inflation proofing built in, temporary dividend restrictions to advance growth, in an industry which is temporarily depressed, but with a decent future.
At least that's what I'm telling my wife, and I will continue to hold, not that I have much choice.

[ronaldson]

Got to be a takeover target now? Maybe a Summerset or Ryman could take them out a $1? Great complimentary offering for Summerset you'd think. Run out of runway in your villa then move into OCA care?

OCA are divesting/exiting basic aged care facilities as fast as they can, and seven are still "held for sale" as at 30 Sept despite a number of lease endings and closures or sales to other operators at the end of FY23 and during the half year just concluded. These will have been/are at best just marginally profitable operations and will continue to be so despite the uplift in Government bed subsidy from 1 July so the Board have taken steps to pivot the business away from the provision of this type of care in the interests of a fair return on investment for shareholders.

Until these divestments are completed, which may not be possible even in the remainder of FY24 given market circumstances, I doubt any premium is available from current NZX listed parties gratuitously taking over such responsibilities.

[bottomfeeder]

Going to be at least 18 months before we see signs of life out of this one.

[SailorRob]

NTA <> Total Assets

1.40 (NTA) is roughly double .70 (sp)

Looking at it all wrong, think real world not accounting book.

Search for hidden assets...

[limmy]

Time to put the $ into other better investments ?

[SailorRob]

Absolutely nobody can figure out actual NTA, it's hilarious people just parroting crap without thinking it through.

[777]

Absolutely nobody can figure out actual NTA, it's hilarious people just parroting crap without thinking it through.

Go on then, tell us what it is.

[SailorRob]

Go on then, tell us what it is.

I've posted many extremely detailed explanations over the last couple of years. Don't have the time right now. Study what buffett says about his insurance liabilities and how he compares them to equity.

The bigger the debt the bigger the asset. He is desperately trying to INCREASE his liabilities... The faster they grow the more Berkshire is worth.

Same with OCA.

[Rawz]

I've posted many extremely detailed explanations over the last couple of years. Don't have the time right now. Study what buffett says about his insurance liabilities and how he compares them to equity.

The bigger the debt the bigger the asset. He is desperately trying to INCREASE his liabilities... The faster they grow the more Berkshire is worth.

Same with OCA.
The difference is Buffett can generate a decent return from his float. OCA can’t.

Something not working

[bull....]

The difference is Buffett can generate a decent return from his float. OCA can’t.

Something not working

exactly. the margin crunch is killing there returns on the float

[Antipodean]

Looking at it all wrong, think real world not accounting book.

Search for hidden assets...


Absolutely nobody can figure out actual NTA, it's hilarious people just parroting crap without thinking it through.

I understand there are more interesting ways to look at the assets OCA has, including the float and non tangibles.
I choose to be conservative and use the reported net tangible assets OCA has for some high level analysis.

I've been buying OCA bits since 2018, and haven't sold any. My average is around what the current price is so not a great investment considering the time span.
I think there are risks at the moment - however I also think the market has over punished OCA for this which is why I top up when I can.

What I'm trying to get to is I'm a supporter - so lets not split hairs on which figures we use.

[SailorRob]

The difference is Buffett can generate a decent return from his float. OCA can’t.

Something not working

I don't disagree here but we have to look out a little.

[SailorRob]

I understand there are more interesting ways to look at the assets OCA has, including the float and non tangibles.
I choose to be conservative and use the reported net tangible assets OCA has for some high level analysis.

I've been buying OCA bits since 2018, and haven't sold any. My average is around what the current price is so not a great investment considering the time span.
I think there are risks at the moment - however I also think the market has over punished OCA for this which is why I top up when I can.

What I'm trying to get to is I'm a supporter - so lets not split hairs on which figures we use.

Yeah what's a billion dollars between friends.

Not splitting hairs, the float is the entire story...

[Muse]

Out of curiosity SailorRob what led you to focus on OCA instead of the other RVs like Summerset, Arvida, Ryman etc.? OCA not the only one to have a float. Was it something about OCA's business model (focus on aged care, mix of units etc), its financial metrics (rate of growth in BVPS, uEPS, ROE) or relative valuation (p/nta, PE etc) that led you to focus on OCA instead of one of the others?

[winner69]

Mav will no doubt tell me what happened but heaps more new sales but less realised gains/development margin ($s)

Like H123 there were 61 sales and average gain was $207k
And.H223 there were 67 sales and average gain was $294k
Then H124 84 sales but average gain only $154k

That’s a huge drop and less than what was being achieved pre-covid

No doubt the ol excuse of geographic / type mix eh …not heavy discounting.

[ValueNZ]

Growing the float at 6% in 6 months in a depressed property market ain't too shabby. Plus I'm pretty happy they decided to not pay dividends this interim. Would be better if they stopped it until they can no longer create a satisfactory return from each dollar retained.

Overall things appear to be going well.

[Rawz]

Best not include the float in the equity calc otherwise ROE looks depressing :(

[winner69]

Cash burn $60m about same as pcp (excluding acquisition) and more than H223 ……..more debt to fund

Just as well they are proud of their debt headroom or whatever they call it

[Leemsip]

I strongly disagree with SR on the float. They have spent it all already. I get that its an interest free loan etc, but the $$ is all sunk into the assets. Counting the float on top of the assets doesnt make sense to me and is a straight double count. Its still a liability as OCA owes the oldies the money, just not an interest bearing liability.

My 2c on OCA is, without valuation uplifts across the portfolio (these are slowing significantly and will slow further), and without loads of new builds which are built for a one off profit (this is slowing), the business model is a money looser and uninvestable. Share price to decline steadily going forward.

I acknowledge and bow before SR superior intellect, money making ability and sharemarket nouse etc.... so not an attack.

I will now hand over to Winner to discuss a cap raise.

[SailorRob]

I strongly disagree with SR on the float. They have spent it all already. I get that its an interest free loan etc, but the $$ is all sunk into the assets. Counting the float on top of the assets doesnt make sense to me and is a straight double count. Its still a liability as OCA owes the oldies the money, just not an interest bearing liability.

My 2c on OCA is, without valuation uplifts across the portfolio (these are slowing significantly and will slow further), and without loads of new builds which are built for a one off profit (this is slowing), the business model is a money looser and uninvestable. Share price to decline steadily going forward.

I acknowledge and bow before SR superior intellect, money making ability and sharemarket nouse etc.... so not an attack.

I will now hand over to Winner to discuss a cap raise.

Holy hell when SR finally gets in front of a God damn laptop....

[Baa_Baa]

Mav will no doubt tell me what happened but heaps more new sales but less realised gains/development margin ($s)

Like H123 there were 61 sales and average gain was $207k
And.H223 there were 67 sales and average gain was $294k
Then H124 84 sales but average gain only $154k

That’s a huge drop and less than what was being achieved pre-covid

No doubt the ol excuse of geographic / type mix eh …not heavy discounting.

The "ol excuse" is a fact, more of the sales this half were in lower priced regions, aggregate being lower gains/DMF. Will be interesting to see the full year, esp if they sell off a swag of high priced Auckland properties.

[X-men]

U all old farts....U all should be happy with no CR today....god...some people is just hard to please...

The media is cheering it!!

https://www.nzherald.co.nz/business/half-year-net-profit-up-24pc-at-retirement-giant-oceania-healthcare/WK5WJQPBLBCULBC5LDUP4EDHKY/

[bottomfeeder]

U all old farts....U all should be happy with no CR today....god...some people is just hard to please...

The media is cheering it!!

https://www.nzherald.co.nz/business/half-year-net-profit-up-24pc-at-retirement-giant-oceania-healthcare/WK5WJQPBLBCULBC5LDUP4EDHKY/

Looking good, we knew the interim dividend would be cancelled unless surplus assets are sold. Stock up for the recovery.

[limmy]

With no dividends coming, there's less reason to hold the stock. I've canceled my "buy" order today.

[SailorRob]

With no dividends coming, there's less reason to hold the stock. I've canceled my "buy" order today.

Yeah I sold my Berkshire shares in the late 1960's for the same reason. What idiot wouldn't pay a dividend.

[Greekwatchdog]

For Bars Review
Oceania Healthcare (OCA) delivered a weak, yet somewhat reassuring 1H24 result. The weakness was undramatic and primarily related to increased village opex, driven by two village openings and slightly higher corporate overheads versus our expectations. Our main takeaway is the reduced risk of a downside scenario for the sector in general, with three reasons in particular for OCA. (1) OCA delivered all time high ORA sales of ~NZ$129m, +NZ$10m above its previous record in 1H21. Up +90% sequentially from the very weak 2H23 and up +15% on 1H23. (2) OCA sold two care sites at or marginally ahead of book value, these are non-premium assets that are broadly breakeven. This suggest some support for OCA's (and the sector's) book value at NZ$1.40 per share. (3) While leverage crept up another +120bps to 37.4%, the pace of debt accumulation has slowed materially. Assuming current market conditions remain, management suggested that debt should not move materially from here to year end and start to track lower thereafter. We reiterate our OUTPERFORM rating with a NZ$1.00 target price.


What's changed?
Earnings: Annuity EBITDA -8%/-9%/-7% in FY24/FY25/FY26 primarily driven by higher costs
Target price: NZ$1.00 from NZ$1.05, due to lower annuity EBITDA and reduced dividends.
Peak debt take two
OCA suggested at its FY23 result in May that it was at or close to peak debt; that did not turn out to be the case. OCA added ~+NZ$60m of net debt in 1H24, primarily due to a combination of: (1) a delayed start to sales at the flagship development The Helier; (2) a few opportunistic land acquisitions; and (3) delayed settlements of sales, primarily a number of care suites. Management again suggested that debt would plateau at its current level before trending down thereafter, but cautioned that it was dependent on housing market conditions. We believe management is being prudent. A combination of: (1) a well advanced sales process at at least two sites, (2) lower capex, (3) higher sales, and (4) no dividend, creates a back drop where maintained or reduced net debt is likely. We see ability to reduce net debt as both a necessary and sufficient condition for a re-rating of OCA's shares.


OCA has a relatively straight forward path to debt free (or near to) if it so chooses
We estimate that OCA needs to spend a further ~+NZ$140m of capex to finish the current 382 units it has under construction. Most, if not all, could be completed by the end of FY25. We estimate the cash sale price of the 382 units to be in the vicinity of ~NZ$240m, which together with currently available-for-sale stock (NZ$365m), and assets sales (NZ$40m), should reduce debt to ~NZ$100m. Against this OCA would still have ~NZ$180m of development assets.


1H24 result summary & forecast changes
OCA's 1H24 result was below our expectations at the annuity EBITDA and underlying earnings lines, primarily driven by higher than expected opex. With costs higher than our estimates across both its village and care operations. Pleasingly, care DMF (deferred management fee) was in-line after disappointing at its 2H23 result, while village DMF was slightly weaker due to the sale/closure of sites within the period. 1H24 sales rebounded from a weak 1H23, new sales gains (due to margins) were below expectations while resales gains were ahead of expectations. OCA did not declare an interim dividend and will consider a final dividend depending on cash flow, market condition and growth opportunities at year end.

[winner69]

Out of curiosity SailorRob what led you to focus on OCA instead of the other RVs like Summerset, Arvida, Ryman etc.?…..

………..?

Hey Rob ….Rymans float is $4.8 billion …jeez that’s huge eh ……much higher than Oceania’s

[ValueNZ]

Hey Rob ….Rymans float is $4.8 billion …jeez that’s huge eh ……much higher than Oceania’s
What is the price you pay for that float? And are Ryman likely to grow at a faster rate than Oceania in the future?

[SailorRob]

I strongly disagree with SR on the float. They have spent it all already. I get that its an interest free loan etc, but the $$ is all sunk into the assets.

Umm this is the ENTIRE point... So you are thinking that if they had this 'interest free loan etc' and hadn't spent it (had it sitting in cash somewhere) then the would be a good thing that you could understand but as they have spent it on assets it's gone and is irrelevant, or worse still it's bad?

We really must open out eyes and think in real terms not accounting terms... Berkshires insurance liabilities are technically also liabilities and technically have also to be paid back, in the real world these are both irrelevant and this is why he considers it superior to equity. OCA's situation is far better still.

So ValueNZ's Dad gives him interest free loan for 10 million dollars and promises that he'll never ask for it back and that any of it that is repaid will be replenished with new money and the loan will grow over time. If ValueNZ doesn't spend it then it's cool and great, but the second he spends the 10 million into solid income producing assets and lives off the proceeds, then he becomes a loser?

No... he will have any chick in his school, maybe a few dudes too who knows, multiple fast cars and be the envy of all... I think everyone would see this situation as an ASSET to him. But someone on the internet would strongly disagree and say on noooooooo it's a LIABILITY and cry into their breakfasts like I am writing this.

Now if ValueNZ had spent decades saving the 10 million and raising it from friends and family (EQUITY) what's better?

The huge effort to provide one's own savings and what he has raised from friends with OBLIGATIONS to produce a return on?

The liabilities are FAR superior to equity capital.

This is hard work.

Counting the float on top of the assets doesnt make sense to me and is a straight double count. It'sstill a liability as OCA owes the oldies the money, just not an interest bearing liability.

​Nobody is doing this... I am not counting float on top of assets, I'm saying I'm focusing on TOTAL assets not net... So I am adding float onto NET assets not total. The point about still owing the oldies shows that you are thinking all wrong about this.

My 2c on OCA is, without valuation uplifts across the portfolio (these are slowing significantly and will slow further), and without loads of new builds which are built for a one off profit (this is slowing), the business model is a money looser and uninvestable. Share price to decline steadily going forward.

Looser means less tight... Never ever invest a cent based on 'valuation uplifts' this is all bollox funny money and means nothing. The ONLY thing that produces a value uplift is the increased cash generation or the increased potential of future cash generation.

I acknowledge and bow before SR superior intellect, money making ability and sharemarket nouse etc.... so not an attack.

All I do is try keep my head out of my arse and study what Buffett says about float VERY carefully and think it through over thousands of hours of reading.


I will now hand over to Winner to discuss a cap raise.


Time to start thinking clearly.

[SailorRob]

Hey Rob ….Rymans float is $4.8 billion …jeez that’s huge eh ……much higher than Oceania’s


Totally irrelevant...

Maybe I need to start a school just covering the extreme basics

[winner69]

What is the price you pay for that float? And are Ryman likely to grow at a faster rate than Oceania in the future?

Of course ……..

[Valuegrowth]

As a holder, 100% OCA should suspend dividends. Possibly should have for the last year or two and likely for another year or two. Use it to pay down debt or expansion as appropriate. Much more effective and better for long term prospects of the company. I couldn't agree more.

[Valuegrowth]

Hi, I wrote about this in my latest Substack, Just the Business. Arie Dekker at Jarden thinks Oceania needs to address its dividend problem. Also at the other retirement village stocks. It's still free to read here: https://justthebusinessjennyruth.substack.com/p/infratils-retireaustralia-devaluation Thank you so much for the information.

[ValueNZ]

Time to start thinking clearly.
Interesting way of framing it haha.

When you say OCA's situation is better, are you referring to the fact that the size of the float in relationship to equity is larger in OCA than Berkshire? Or something else?

[Curly]

How long will it take for people to click on that you can buy an asset for less than half it’s value. Very few rushing in for the Christmas sale. Need the Briscoe lady to do a OCA sale pitch. Topped up again 🥴

[SailorRob]

How long will it take for people to click on that you can buy an asset for less than half it’s value. Very few rushing in for the Christmas sale. Need the Briscoe lady to do a OCA sale pitch. Topped up again 若


Around a quarter of its tangible asset value and less of its intrinsic.

[Mrbuyit]

^^ I guess the question for some of us longer term holders is when do we see a re-rate closer to "value".. sure it's a bargain but maybe it remains a bargain for 10+ years, like SR is hoping for.. It depends if you are in accumulation mode or have enough...(maybe you can never have enough)

It seems like the sentiment suggests you could pop the cash elsewhere for 12 months or more without really missing out..

[SailorRob]

Trust me Mr Buffett's head would spin off his shoulders if he saw OCA balance sheet.

He's spent a lifetime building that system to get hold of that 'float' money that he can use for free. But in his world, it's highly regulated and it's fought over so it's very hard to actually get and keep.

OCA has way more of this funding per dollar of our (shareholders) money than Berkshire does.

I hope you heard him say that almost nobody thinks of it like they do.

OCA is growing this free cash at 26% per year too which is WAY faster than Buffett ever has.

So the key is that most of OCA liabilities are actually extremely valuable assets, worth MORE than their equity.

And as interest rates go up this becomes far more valuable.


Yeah there are multiple reasons,

But the main ones;

OCA float growth is way higher.

Much bigger in relation to equity, MUCH bigger.

Unregulated (this is a huge one as insurers are very limited in what they can do with the funds - Berkshire less so but still)

Highly contested, so the float is so valuable the industry on average is happy to lose money in order to get hold of it.

[SailorRob]

^^ I guess the question for some of us longer term holders is when do we see a re-rate closer to "value".. sure it's a bargain but maybe it remains a bargain for 10+ years, like SR is hoping for.. It depends if you are in accumulation mode or have enough...(maybe you can never have enough)

It seems like the sentiment suggests you could pop the cash elsewhere for 12 months or more without really missing out..


Yes, but as many have pointed out I only want it to remain 'value' for 10 plus years if it is in fact cheap in relation to its intrinsic value, not because intrinsic is also declining. If I have the opportunity to buy $100 notes for $50 then I want that to last for a long time.

The popping the cash somewhere without missing out is a huge gamble...

[ValueNZ]

Yeah there are multiple reasons,

But the main ones;

OCA float growth is way higher.

Much bigger in relation to equity, MUCH bigger.

Unregulated (this is a huge one as insurers are very limited in what they can do with the funds - Berkshire less so but still)

Highly contested, so the float is so valuable the industry on average is happy to lose money in order to get hold of it.
Thanks.

Feel free to correct me if I'm wrong but one fairly significant disadvantage I see to Oceania's float is that it is relatively capital intensive. For OCA to grow it's float they need to develop property into a retirement village and sell(lend) the units, whilst an insurance company can just write an insurance policy. So as long as OCA wants to grow it's float, they'll need to continue spending cash developing these villages which have relatively low returns compared to say owning an equity portfolio.

Despite that I'm sure OCA's float comes out ahead compared to Berkshire's insurance operations, but still worth considering.

[SailorRob]

Thanks.

Feel free to correct me if I'm wrong but one fairly significant disadvantage I see to Oceania's float is that it is relatively capital intensive. For OCA to grow it's float they need to develop property into a retirement village and sell(lend) the units, whilst an insurance company can just write an insurance policy. So as long as we as OCA wants to grow it's float, they'll need to continue spending cash developing these villages which have relatively low returns compared to say owning an equity portfolio.

Despite that I'm sure OCA's float comes out ahead compared to Berkshire's insurance operations, but still worth considering.


Not necessarily a disadvantage, you answered your own question in saying 'just write an insurance policy'. It really is that easy and there in lies the problem. You can write a piece of paper today that creates instant earnings now and the cost comes later. So this is why most of the industry loses money as they do stupid things. Also, to write an insurance policy is very capital intensive as well as you need the capital behind you in order to write it.

Capital intensity doesn't matter so much as long as it's generating a return, the problem is that with capitalised expenses it's hard to gauge this return years out.

So for an insurance company to grow its float, they need to commit extra capital as well and they need to underwrite profitably and a. few other things too.

Good points you have considered and you're not wrong, it's just perhaps more nuanced.

[SailorRob]

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.




Up 35% since I highlighted...

[SailorRob]

this is why SRob's theory on stock prices going down = good, is a load of crap.

We’re not wishing it on anybody. But if you asked us next month whether Berkshire would be better off if the whole stock market were down 50 percent or where it is now, we would be better off if it was down 50 percent, whether we had any cash on hand now or not, because we would be generating cash to buy things.

[Rawz]

We’re not wishing it on anybody. But if you asked us next month whether Berkshire would be better off if the whole stock market were down 50 percent or where it is now, we would be better off if it was down 50 percent, whether we had any cash on hand now or not, because we would be generating cash to buy things.

This has nothing to do with OCA

[SailorRob]

This has nothing to do with OCA

Oh yes it does sport. Think about it carefully.

[Maverick]

Something for everyone in that report . Haters will have plenty to support their view and the very few who know this beast properly will see lots to be happy about. Take your pick.

Here's my breakdown…

1.Apartment resales are a big deal. There should be a nice uptick giving large numbers of new sales 5-6 years ago that should be starting to churn .
This did not happen , new stuff has sold surprisingly well but the resale apartments are not churning meaningfully yet. Looks like the expected 5.5 tenure perhaps isn't that short after all.

2. Care profit growth with PAC/ DMF stripped out should show improvement. Perhaps $1-$1.5m. Whatever the result is will offer a measure of the latest rates that actually get to the bottom line.
No improvement there. So the DHB 10% pay rise has not reached the bottom line in the 3 months it was in action. Perhaps the costs of shutting down or selling care villages added extra costs. Can't tell so for now I'm adding zero growth from here until demonstrated otherwise.

3. Any village divestments.6 gone -excellent outcome

4. Care suites resales and even new sales should be now showing solid numbers and good occupancy now NZ borders are open and staffing is much better.
New sales are always tempered by the rate of exiting of grandfathered residents so normal new sales is just that. However the 117 resales tells a very happy story. I large jump there has proved the offering is market accepted and with simple math that the arsenal of care suites are churning about 2.5 years. This is solid proof for any doubters that care suites work. OCA has nearly 1000 of them ( compared to 1300 regular beds).

Of course the usual growth in DMF , expenses and margins etc are all important too but these are pretty predictable by now.
Nope. DMFs down due to sold off villages( logical) while village expenses ballooned to set up Helier and Bellevue. Meanwhile corporate costs went down. All of this is rational in hindsight but the $magnitude of setting up Helier stood out.

Personally, I expect Brent to try and dodge comment on Helier as it is likely to just spook the listeners at this stage of the sell down. To his credit he was straight up and was willing to pass on some very impressive sales data for this early stage of the sell down.

Of course there are always surprises but to put a number on it….
I'm Picking a Uprofit of +15 - 20%ish tomorrow. Miles out!
This one is strange to me. 2HY23 had really high apartment prices and massive new sales margins. I discarded the idea Helier sales were in the mix causing this anomaly as it hadnt even opened! Very wrong. Turns out , in that mix were 5 Helier premium sales. This threw out all my forecasts big time. Then 1HY when Helier does officially open they get 1 actual sale.
Let me show you the previous 5 HY sequences and this massive effect by including helier in 2hy23 had. I blew way off course basing my forecasts thinking those blue numbers were semi sustainable and pre- Helier. Obviously it all crashed down when only 1 was recorded in the recent result.
New sale prices$ 896…948…938…1086…847
New Build Margins% 26…30…32…40…23

Really all that needs to happen is those 2 last numbers sets need to be switched around. In other words, put those 5x 2hy23 Helier sales into HY1 24 results where they would normally belong (I've never heard of sales being booked before delivery until now - I guess OCA really wanted the cash) and then it all comes good. It just completely broadsided my workings but really doesn't mean more than that to anyone else. It doesn't change anything to where we are now.
So my failings aside, it does demonstrate just how powerful Helier sales are. Then Brent has said he expects it to fully sell down in 18 months ( faster than usual) with 6 more sales ( totalling 15% of the very large delivery) already in the pipeline. So really , that's awesome news on all fronts. Bodes very very well for the next few years.

Decide for yourself about OCA axing the dividend but I see it as a compulsory capital raise to shareholders so that they could buy Bream Bay and Helier land adjacent. Knowing both of those sites and also just how easy and fast things go when you are only just adding to an existing facility. To me it is an absolute no brainer that they jumped on that land. That will be a very profitable set of buildings to add to their pipeline.

Am I pleased with the result?. Yes and no…
We have all waited for ages now and this has gone on long enough with no end. Emotionally I'm as over this as the next guy but the numbers are still there. Basically the delay of the Helier and Bellevue has just caused us a 6 month set back . Of which we are are now at the end of.
In fact, with how well new sales and care suites are going. This is now very de risked so I'm sorry folks … we just gotta wait some more.

[Balance]

Feedback from a fund manager I met today over lunch - ‘NTA has no credibility. OCA should be revising down their property values, not up.’

[nztx]

Feedback from a fund manager I met today over lunch - ‘NTA has no credibility. OCA should be revising down their property values, not up.’

Oooops 50c coming Up ? .. Time to restock the larder with untold OCA & wait for T/out sniff around ? :)


must be opportunity here for every man, sailor and his dog and make a tidy killing .. Wonder if the Danes may be
interested again after the long & painful task of digesting MetLifeCare lock, stock & resthome ? ;)

[SailorRob]

Feedback from a fund manager I met today over lunch - ‘NTA has no credibility. OCA should be revising down their property values, not up.’

Correct. Look at Googles NTA and market price. Tangible assets are irrelevant particularly in property sector.

[SailorRob]

Debt and equity financing both have an opportunity cost. This cost is equivalent to the expected return for capital providers. But the cost of debt is explicit whereas the cost of equity is implicit.

[winner69]

Good report Mav ..we’ll done

So 5 Helier premium sales were included in F23 results …is that what you are saying? Or I have I misunderstood you. Does explain why strong finish to F23

And they didn’t say a word about in F23 results or crow about it at ASM

You didn’t say much about cas burn / debt

For what’s it worth I reckon what I call ‘Operating Profit’ was a $12.2m LOSS … by far worst half year since listing

[ValueNZ]

Debt and equity financing both have an opportunity cost. This cost is equivalent to the expected return for capital providers. But the cost of debt is explicit whereas the cost of equity is implicit.
Thanks. This helped me to understand why Buffett prefers float over equity.

[SailorRob]

Thanks. This helped me to understand why Buffett prefers float over equity.


Buffett or anyone else.

For example... Using your own savings accumulated over a lifetime to buy a house vs a permanent interest free loan (well actually a loan that you get paid to take out).

Any rational person would prefer the liability over the equity.

But very very few people understand this when it comes to OCA.

They have no clue about real NTA as they just view the float as to be subtracted from the equity not added to it...

[winner69]

Another piece from Jenny Ruth and the games Oceania management and bankers are playing …keeping owners of the company in the dark

Seems to me Oceania doing everything possible to avoid a capital raise …which no doubt they see as embarrassing and a sign of failure.

Anyway read Jenny’s piece …..and when she starts charging for such stuff sign up …good value

https://justthebusinessjennyruth.substack.com/p/directors-shouldnt-allow-bankers?publication_id=1827355&utm_campaign=email-post-title&r=1rwf26

[ValueNZ]

Buffett or anyone else.

For example... Using your own savings accumulated over a lifetime to buy a house vs a permanent interest free loan (well actually a loan that you get paid to take out).

Any rational person would prefer the liability over the equity.

But very very few people understand this when it comes to OCA.

They have no clue about real NTA as they just view the float as to be subtracted from the equity not added to it...
Yeah that all makes sense, stupidly it just never clicked in my mind when Buffett talked about the cost of equity what he actually meant by that.

[Balance]

Another piece from Jenny Ruth and the games Oceania management and bankers are playing …keeping owners of the company in the dark

Seems to me Oceania doing everything possible to avoid a capital raise …which no doubt they see as embarrassing and a sign of failure.

Anyway read Jenny’s piece …..and when she starts charging for such stuff sign up …good value

https://justthebusinessjennyruth.substack.com/p/directors-shouldnt-allow-bankers?publication_id=1827355&utm_campaign=email-post-title&r=1rwf26

Reaffirming the old saying that ‘bankers are fair weather friends’.

As Richard Branson once said, ‘what a bunch of *ankers when you actually need them!’

[Jenny Ruth]

Thanks, winner69. You got here before me. I was just going to provide a link.
But re an Oceania capital raising, unless Oceania can't sell down any of that excess inventory, I don't think that's likely. It's certainly not in the immediate future. Unlike Ryman and Arvida, Oceania has met all its covenants. The Helier development should start to deliver cash - the company said it has sold 12 of the 79 apartments - these a $1m plus apartments. An analyst asked whether they'd start discounting and got a firm no. In my view, as soon as you start discounting, you devalue your brand.

[Balance]

Thanks, winner69. You got here before me. I was just going to provide a link.
But re an Oceania capital raising, unless Oceania can't sell down any of that excess inventory, I don't think that's likely. It's certainly not in the immediate future. Unlike Ryman and Arvida, Oceania has met all its covenants. The Helier development should start to deliver cash - the company said it has sold 12 of the 79 apartments - these a $1m plus apartments. An analyst asked whether they'd start discounting and got a firm no. In my view, as soon as you start discounting, you devalue your brand.

OCA is not discounting the price of St Helier. They are providing residential 'incentives'?

Reminds me of how the property companies structure their lease agreements with 'ratchet' clauses to keep the appearance of high rentals but provide fit-out incentives and rent free periods to bring real rentals to market levels.

[Entrep]

Same as electronic goods cash backs.

[SailorRob]

How in the hell do they calculate their gearing ratio?

[winner69]

How in the hell do they calculate their gearing ratio?

I think you know full well Dorothy

[SailorRob]

I think you know full well Dorothy


No it was a serious question, can you show me the numbers to get to the 37%.

[winner69]

No it was a serious question, can you show me the numbers to get to the 37%.

OK Dorothy I’ll play your game

Net Debt $616m / (Net Debt $616m + Equity $1,107m) = 37.7% (they say)

And as you know the $951m due to residents not included in Net Debt but shown as a Liability

[SailorRob]

OK Dorothy I’ll play your game

Net Debt $616m / (Net Debt $616m + Equity $1,107m) = 37.7% (they say)

And as you know the $951m due to residents not included in Net Debt but shown as a Liability


I'm not really into formulas relating to balance sheet items, but isn't this ratio supposed to be a net debt to equity ratio?

Why are we adding the debt to the equity on the right hand side, is this some form of 'assets' shortcut?

[mike2020]

I look at the figures thrown around in round numbers and I feel you can be as creative as you like. 2,700m assets minus 616m debt equals NTA $2.88 per share.
Game over guys.

[winner69]

I'm not really into formulas relating to balance sheet items, but isn't this ratio supposed to be a net debt to equity ratio?

Why are we adding the debt to the equity on the right hand side, is this some form of 'assets' shortcut?

More along the lines of Debt % of what lenders and shareholders have put in ……gearing they call it

[winner69]

I look at the figures thrown around in round numbers and I feel you can be as creative as you like. 2,700m assets minus 616m debt equals NTA $2.88 per share.
Game over guys.

And pay back the residents it’s 2700 minus 950 minus 616 equals NTA $1.61


Or if further deduct the bull****/fiddle/hype factor NTA is 90 cents …now that’s creative

[SailorRob]

More along the lines of Debt % of what lenders and shareholders have put in ……gearing they call it

Ok cheers, but doesn't gearing usually mean debt to equity ratio?

[SailorRob]

https://www.investopedia.com/terms/g/gearing.asp

[winner69]

Ok cheers, but doesn't gearing usually mean debt to equity ratio?

That is correct …….so you knew all along Dorothy ….you tease

Seems gearing and debt ratio and leverage have become pretty loose in their definitions these days

Suppose if one notes how they calculated it these days no problems

[ValueNZ]

Ok cheers, but doesn't gearing usually mean debt to equity ratio?
There are different calculations, but you're right I think they are a bit BS

https://www.investopedia.com/terms/g/gearingratio.asp#:~:text=Gearing%20ratios%20are%20 financial%20ratios,'%20funds%20versus%20creditors' %20funds.
Understanding Gearing Ratios

The best known examples of gearing ratios include:

Debt-to-Equity Ratio=Total Debt/Total Equity
​
Times Interest Earned*=EBIT/Total Interest
​
Equity Ratio=Equity/Assets

​
Debt Ratio=Total Debt/Total Assets
​

[ValueNZ]

There are different calculations, but you're right I think they are a bit BS

https://www.investopedia.com/terms/g/gearingratio.asp#:~:text=Gearing%20ratios%20are%20 financial%20ratios,'%20funds%20versus%20creditors' %20funds.
Understanding Gearing Ratios

The best known examples of gearing ratios include:

Debt-to-Equity Ratio=Total Debt/Total Equity
​
Times Interest Earned*=EBIT/Total Interest
​
Equity Ratio=Equity/Assets

​
Debt Ratio=Total Debt/Total Assets
​


So OCA was presenting the debt ratio

[winner69]

Hey Value …..none of those formulae have the Float in them

[SailorRob]

That is correct …….so you knew all along Dorothy ….you tease

Seems gearing and debt ratio and leverage have become pretty loose in their definitions these days

Suppose if one notes how they calculated it these days no problems

No, I didn't know.

OCA uses a total BS one they have invented...

Not Debt/Equity at all.

[SailorRob]

So OCA was presenting the debt ratio

Well no, as total assets are way higher again than the debt plus equity figure they use.

[ValueNZ]

Well no, as total assets are way higher again than the debt plus equity figure they use.
True apologies, saw debt + equity and automatically thought assets. But it's net debt. Even then it's liabilities + equity = assets

No clue what that ratio is even supposed to indicate then.

[winner69]

To be fair to Oceania they rarely use the term Gearing ……always say D/(D+E) is x%

Gearing/leverage loosely used terms by most …even by those who should know better

But Rob is on the ball

[Rawz]

If D/(D+E)=>40%… error don’t invest …

[SailorRob]

To be fair to Oceania they rarely use the term Gearing ……always say D/(D+E) is x%

Gearing/leverage loosely used terms by most …even by those who should know better

But Rob is on the ball

They used it in the latest report, I did a word search.

[SailorRob]

If D/(D+E)=>40%… error don’t invest …

Oh man, so good. Imagine if there were no crazy people, our returns would be destroyed.

And this after I explained all the holes in this idiocy.

[ValueNZ]

If D/(D+E)=>40%… error don’t invest …

What does net debt/(net debt + equity) ratio actually tell you?

[SailorRob]

What does net debt/(net debt + equity) ratio actually tell you?

If you find out let me know.

Just shows how much attention people are paying, all these analysts and articles posting that 37% figure without question.

I thought I must be missing something but I bloody wasn't.

Find me one reference to calculating gearing like that, I haven't been able to.

Even the traditional debt to equity ratio tells you stuff all really.

[winner69]

What does net debt/(net debt + equity) ratio actually tell you?

Reaches x% = capital raise needed

And Oceania not far away from x%

[SailorRob]

Reaches x% = capital raise needed

And Oceania not far away from x%

So you're saying this ratio is what the lenders use? I doubt that.

[ValueNZ]

Reaches x% = capital raise needed

And Oceania not far away from x%
Thanks. I assume you mean this one?

b) Loan to Value Ratio – the ratio of total bank indebtedness shall not exceed 50%of the total property value of all Group’s properties (including the “as-complete”valuations for projects funded under the Development Facility)

14863
As shown in the screenshot Loan to Value and net debt/(net debt+equity) are slightly different, but very very close. Honestly I'm confused how that works, why are they showing gearing as net debt/(net debt+equity) instead of debt to equity like a normal company

[winner69]

Thanks. I assume you mean this one?

b) Loan to Value Ratio – the ratio of total bank indebtedness shall not exceed 50%of the total property value of all Group’s properties (including the “as-complete”valuations for projects funded under the Development Facility)

14863
As shown in the screenshot Loan to Value and net debt/(net debt+equity) are slightly different, but very very close. Honestly I'm confused how that works, why are they showing gearing as net debt/(net debt+equity) instead of debt to equity like a normal company

Because Oceania is not a normal company ……..like fantastic companies are not normal eh

[Maverick]

Good report Mav ..we’ll done

So 5 Helier premium sales were included in F23 results …is that what you are saying? Or I have I misunderstood you. Does explain why strong finish to F23

And they didn’t say a word about in F23 results or crow about it at ASM

You didn’t say much about cas burn / debt

For what’s it worth I reckon what I call ‘Operating Profit’ was a $12.2m LOSS … by far worst half year since listing
Hey Winner,
Yes you have got it right with the 5 Helier sales recorded in 2HY23 and yes that's why 2023 apartment prices and margins were significantly stronger than they should have been. This had the effect of basically gutting 2HY24 `s profit improvement as the presales cash was dropped into FY2023. I'm not suggesting skullduggery for 1 second. They obviously had the cash and had to record it somewhere. To my knowledge It's just never happened this way before. On further reflection that would suggest why these 1HY24 new sales volumes are oddly high and low margin…because I now expect they have done the same with Christchurch presales into 1 HY24. ( maybe they have changed the presale contracts/payment process? )
Certainly in the past experiences I had learned to accept a sizable time gap between announcing a delivery complete before any sales are officially booked.

But the good news is that whenever these pre-sales are booked, it doesn't matter one bit in the longer term. It Just mattered to me as it screwed up my inputs this time due to timing of the Helier tail wagging the dog ( skewing up apartment prices and margins) in projecting this 1HY24 result.

On “Cash burn”…I am happy to say that they will be cash flow positive by about $20m HY2 FY24. This does not include possible extra stuff like assets sales or any more purchases.
In fact my calc`s say cash flow of about $20m positive continues each HY from here on. That also allows for an anticipated resumption of the dividend 2HY24.

Also on further reflection of the result I've upgraded my opinion to be now very happy with this result, primarily sales have now returned in good health and how it now confirms further other patterns to clearly project the next years performances -as much as one can.

Basically for the most simplistic , childlike way to project future performance, it works like this from here…

OCA have demonstrated they have delivered a flat result of $57m in difficult times and selling lower margin apartments ( Hamilton , Tauranga and CHCH). Sales are now improving in good volume and care suites are clearly working well.(117 resales at $337k is as much proof as anyone could want)

Going forward - with the Helier fully removed - they are currently in position to have all the usual volumes of empty stock to work with and other business streams to carry on to keep achieving this $57 profit….again that is with the Helier completely stripped aside.
BUT….let's consider what the Helier is now adding on top of this .
Crudely…$200m building selling over 24 month with a 37% margin = $74m profit ( that's $37m/yr)
So each year should now achieve $57+$37 = $94m each year
( then the downstream DMFs so this is more than a 2 year sugar rush).
Then of course there's the $200m dropped straight onto “cash flow in.”

While this is obviously rough and unscientific ( and very approximate i.e. a retail $200m building.) My complex math does back up a similar outcome.

My earlier posts which have said the importance of the 1HY24 result is because its the precursor and guide of what is imminent.
Despite 1hy24 coming in flat, it has confirmed the wall of high margin sales is now reality and inevitable. There is also absolutely no cash flow problem.

My only slight fear now, and I really do mean that it is my only fear, that a takeover could short change things after all this patience and work. These results I'm very happy about are now in plain sight to the analysts and anyone who wants to see.
I hope it is unlikely with no big cornerstone holders for any potential suitor to pre-approach, making a takeover more difficult.


So there you go Winner, back to cash flows… The tide of cash that has been sucked out by Helier for the last 4 years is now the cash tsunami already moving in over the next 2 years with a 35%-40% margin added as reward for the effort.

[ValueNZ]

Hey Winner,
Yes you have got it right with the 5 Helier sales recorded in 2HY23 and yes that's why 2023 apartment prices and margins were significantly stronger than they should have been. This had the effect of basically gutting 2HY24 `s profit improvement as the presales cash was dropped into FY2023. I'm not suggesting skullduggery for 1 second. They obviously had the cash and had to record it somewhere. To my knowledge It's just never happened this way before. On further reflection that would suggest why these 1HY24 new sales volumes are oddly high and low margin…because I now expect they have done the same with Christchurch presales into 1 HY24. ( maybe they have changed the presale contracts/payment process? )
Certainly in the past experiences I had learned to accept a sizable time gap between announcing a delivery complete before any sales are officially booked.

But the good news is that whenever these pre-sales are booked, it doesn't matter one bit in the longer term. It Just mattered to me as it screwed up my inputs this time due to timing of the Helier tail wagging the dog ( skewing up apartment prices and margins) in projecting this 1HY24 result.

On “Cash burn”…I am happy to say that they will be cash flow positive by about $20m HY2 FY24. This does not include possible extra stuff like assets sales or any more purchases.
In fact my calc`s say cash flow of about $20m positive continues each HY from here on. That also allows for an anticipated resumption of the dividend 2HY24.

Also on further reflection of the result I've upgraded my opinion to be now very happy with this result, primarily sales have now returned in good health and how it now confirms further other patterns to clearly project the next years performances -as much as one can.

Basically for the most simplistic , childlike way to project future performance, it works like this from here…

OCA have demonstrated they have delivered a flat result of $57m in difficult times and selling lower margin apartments ( Hamilton , Tauranga and CHCH). Sales are now improving in good volume and care suites are clearly working well.(117 resales at $337k is as much proof as anyone could want)

Going forward - with the Helier fully removed - they are currently in position to have all the usual volumes of empty stock to work with and other business streams to carry on to keep achieving this $57 profit….again that is with the Helier completely stripped aside.
BUT….let's consider what the Helier is now adding on top of this .
Crudely…$200m building selling over 24 month with a 37% margin = $74m profit ( that's $37m/yr)
So each year should now achieve $57+$37 = $94m each year
( then the downstream DMFs so this is more than a 2 year sugar rush).
Then of course there's the $200m dropped straight onto “cash flow in.”

While this is obviously rough and unscientific ( and very approximate i.e. a retail $200m building.) My complex math does back up a similar outcome.

My earlier posts which have said the importance of the 1HY24 result is because its the precursor and guide of what is imminent.
Despite 1hy24 coming in flat, it has confirmed the wall of high margin sales is now reality and inevitable. There is also absolutely no cash flow problem.

My only slight fear now, and I really do mean that it is my only fear, that a takeover could short change things after all this patience and work. These results I'm very happy about are now in plain sight to the analysts and anyone who wants to see.
I hope it is unlikely with no big cornerstone holders for any potential suitor to pre-approach, making a takeover more difficult.


So there you go Winner, back to cash flows… The tide of cash that has been sucked out by Helier for the last 4 years is now the cash tsunami already moving in over the next 2 years with a 35%-40% margin added.


Great post Maverick. When you say the $20m positive cash flow allows for the resumption of the dividends, is this your preference?

[Maverick]

Great post Maverick. When you say the $20m positive cash flow allows for the resumption of the dividends, is this your preference?
My preference - No Value its not...

Yes , no dividend is more tax efficient.
Yes, I think them halting this dividend to fund Bream Bay and more Helier was tremendous use of the money for easy future gain.

....but My wife is grumpy she wants to see some cash!

[ValueNZ]

My preference - No Value its not...

Yes , no dividend is more tax efficient.
Yes, I think them halting this dividend to fund Bream Bay and more Helier was tremendous use of the money for easy future gain.

....but My wife is grumpy she wants to see some cash!
Yeah agreed, no dividend is preferable. As for your takeover concern, I don't see it as likely as the board of directors are owners alongside us and I'm sure see the stock as very undervalued as we do.

[winner69]

Thanks Mav for your insights

Your comments about how they might now book/record sales etc is a bit of worry

Hope John Boscawen of Ryman fame isn’t an Oceania shareholder ……..he’d be voicing his concerns publicly in his normal manner.

[Maverick]

Thanks Mav for your insights

Your comments about how they might now book/record sales etc is a bit of worry

Hope John Boscawen of Ryman fame isn’t an Oceania shareholder ……..he’d be voicing his concerns publicly in his normal manner.
I dont feel that way. In fact it had become the norm for all operators to announce projects delivered when there was plenty of tidy up to do before any occupation.
I've found everything Brent said at the online meeting to be accurate and can verify all his statements that cross over with areas with my own private known observations and work. I think it is very safe to assume he is also speaking accurately in the other areas.

Just last week I had someone up the OCA foodchain say he is a very honest man.
So no reason to think anything is untoward.

If they can get payment from new sales prior to occupation then all clicks to them.

[Jenny Ruth]

My latest column on Just the Business is about the ongoing review of the Retirement Villages Act - you can read it here: https://justthebusinessjennyruth.substack.com/p/retirement-village-review-continues

[Greekwatchdog]

More directors snapping some more shares. Averaging down perhaps, or a barging price?? Time will tell

https://www.nzx.com/announcements/422730

[Lego_Man]

More directors snapping some more shares. Averaging down perhaps, or a barging price?? Time will tell

https://www.nzx.com/announcements/422730

Piddly little amounts but better than nothing i guess.

[X-men]

Sell now at 74c..buy back next week at 69c next week. Rinse n repeat

[X-men]

Here we go...7m plus share at 74c....change for long suffering holders to get out!!

[ValueNZ]

Good to see continued confidence in the business by management.

There's only one reason why insiders buy...

[Mudfish]

Hang on, what am I missing? Very large volumes traded today SUM, RYM and OCA. Has anyone picked up on some good news out there for the retirement sector? OCA up, what the....

[mike2020]

Long suffering holders capitulate at bottom of the market and who wins?
SR is in for a sleepless night.

[Greekwatchdog]

Hang on, what am I missing? Very large volumes traded today SUM, RYM and OCA. Has anyone picked up on some good news out there for the retirement sector? OCA up, what the....

Index trading

[WAIKEN]

This feels a lot like MET before the takeover
There was a lot of esoteric analysis as to why MET was a dog but when it got to half of its NTA it became a buy for me
I doubled my money when I sold just under the Swedes offer price. Covid came and the price collapsed back to less than half of NTA so I reinvested my proceeds including the profit and up she went - Not to nearly 6.00 but nearly 5.00 on the new lower offer price. Another doubling.
I believe that OCA priced at close to half of NTA and probably a third of replacement cost is a glaring takeover target. It may not get to NTA but 1.00-1.20 is on the cards.
The volume today is very suspicious and the elevated volume is not for the same reason as Arvida. The great Buffett and the once great Brierley have always chased discount to NTA.

[ValueNZ]

This feels a lot like MET before the takeover
There was a lot of esoteric analysis as to why MET was a dog but when it got to half of its NTA it became a buy for me
I doubled my money when I sold just under the Swedes offer price. Covid came and the price collapsed back to less than half of NTA so I reinvested my proceeds including the profit and up she went - Not to nearly 6.00 but nearly 5.00 on the new lower offer price. Another doubling.
I believe that OCA priced at close to half of NTA and probably a third of replacement cost is a glaring takeover target. It may not get to NTA but 1.00-1.20 is on the cards.
The volume today is very suspicious and the elevated volume is not for the same reason as Arvida. The great Buffett and the once great Brierley have always chased discount to NTA.
Buffett has always chased discount to NTA? Interesting...

[Daytr]

This feels a lot like MET before the takeover
There was a lot of esoteric analysis as to why MET was a dog but when it got to half of its NTA it became a buy for me
I doubled my money when I sold just under the Swedes offer price. Covid came and the price collapsed back to less than half of NTA so I reinvested my proceeds including the profit and up she went - Not to nearly 6.00 but nearly 5.00 on the new lower offer price. Another doubling.
I believe that OCA priced at close to half of NTA and probably a third of replacement cost is a glaring takeover target. It may not get to NTA but 1.00-1.20 is on the cards.
The volume today is very suspicious and the elevated volume is not for the same reason as Arvida. The great Buffett and the once great Brierley have always chased discount to NTA.

I get the NTA value, but how is it realized when the assets are pretty much tied up in right to ownership contracts & the operation is running potentially at a loss after paying dividend?

[Baa_Baa]

I get the NTA value, but how is it realized when the assets are pretty much tied up in right to ownership contracts & the operation is running potentially at a loss after paying dividend?

It is not realised by the assets, its value will be realised in long term discounted cash flows. It's also not a trading stock, and clearly not one you are familiar with, they aren't paying a dividend.

[ValueNZ]

I get the NTA value, but how is it realized when the assets are pretty much tied up in right to ownership contracts & the operation is running potentially at a loss after paying dividend?
Dividends paid out are not expenses and don't impact the bottom line.

[Daytr]

Dividends paid out are not expenses and don't impact the bottom line.

Weren't they borrowing to pay dividends up until recently?

[Daytr]

It is not realised by the assets, its value will be realised in long term discounted cash flows. It's also not a trading stock, and clearly not one you are familiar with, they aren't paying a dividend.

The no payment of dividends is recent though isn't it? Quite right I'm not that familiar with it hence the questions.

I don't just trade FYI these are genuine questions.

[SailorRob]

Buffett has always chased discount to NTA? Interesting...

Yeah what the hell was that person on about. Show me one example... Sure he used to chase discounts to net current but I agree that statement is totally wrong.

[SailorRob]

I get the NTA value, but how is it realized when the assets are pretty much tied up in right to ownership contracts & the operation is running potentially at a loss after paying dividend?

No you don't, nobody does. The liabilities are far superior to equity, so you gotta add billion odd to the assets.

[Baa_Baa]

No you don't, nobody does. The liabilities are far superior to equity, so you gotta add billion odd to the assets.

Well not 'nobody', there's a few who get it.

Unfortunately current accounting principles and practices fail to recognise that the accumulated revenue is only repayable in a lessor percentage (the remains are float), and are repeatable and grow, ad infinitum, and ergo the withholdings or retained revenues are assets (albeit held as liabilities on the balance sheet under current accounting practices), that can be and are leveraged, interest free, into growth of the asset base.

Really, the fundamental value proposition of these RV's seems to be largely misunderstood which imo is surprising as the business model has been in play for decades. It must be imo because accounting practices do not or fail to account, for the value of the withholdings (retained earnings) and put them on the opposite side of the balance sheet ledger than where they in reality belong.

Like you say, there's circa a billion dollar of assets (cash) that is withheld and retained, but perversely, reported as a liability. WTF, it's insane. And people get upset about SP ratio to NTA, without realising NTA is, under current accounting practices devalued by ~a billion $

If they added those withheld/retained earnings, as assets, which they should, then the SP is massively below NTA/NAV, way more than the current 50% discount or thereabouts. Which makes the SP massively underpriced.

Go figure. It makes no sense. The beanies have control of the narrative when reality is far from it.

[bull....]

Dividends paid out are not expenses and don't impact the bottom line.

lost me on this statement. cause they affect the bottom line , why because if you pay out dividends that mean less assets and less money to invest and grow earnings which effects the bottom line.

[Habits]

Well not 'nobody', there's a few who get it.

Unfortunately current accounting principles and practices fail to recognise that the accumulated revenue is only repayable in a lessor percentage (the remains are float), and are repeatable and grow, ad infinitum, and ergo the withholdings or retained revenues are assets (albeit held as liabilities on the balance sheet under current accounting practices), that can be and are leveraged, interest free, into growth of the asset base.

Really, the fundamental value proposition of these RV's seems to be largely misunderstood which imo is surprising as the business model has been in play for decades. It must be imo because accounting practices do not or fail to account, for the value of the withholdings (retained earnings) and put them on the opposite side of the balance sheet ledger than where they in reality belong.

Like you say, there's circa a billion dollar of assets (cash) that is withheld and retained, but perversely, reported as a liability. WTF, it's insane. And people get upset about SP ratio to NTA, without realising NTA is, under current accounting practices devalued by ~a billion $

If they added those withheld/retained earnings, as assets, which they should, then the SP is massively below NTA/NAV, way more than the current 50% discount or thereabouts. Which makes the SP massively underpriced.

Go figure. It makes no sense. The beanies have control of the narrative when reality is far from it.

NTA Net Tangibles. I think you are telling half the story for a beat up. The cash handed over for the occupation rights is recorded as well. Netting out in the accounts.

[SailorRob]

And people get upset about SP ratio to NTA, without realising NTA is, under current accounting practices devalued by ~a billion $

If they added those withheld/retained earnings, as assets, which they should, then the SP is massively below NTA/NAV, way more than the current 50% discount or thereabouts. Which makes the SP massively underpriced.



Yep I've been banging on about this for a long time, but even with excruciatingly detailed explanations over a period of maybe 2 years, still very few get it.

Of the wider shareholder base and commentariat possibly one in a thousand understand.

[SailorRob]

NTA Net Tangibles. I think you are telling half the story for a beat up. The cash handed over for the occupation rights is recorded as well. Netting out in the accounts.


Oh man here we go!!!

See this is why I say nobody gets it.

There are about 4 of us that do... even when you explain it some folk cannot get it through their skull!

Without this supreme ignorance we as investors would have a hard time of it.


So far over the head it's not funny.

[bull....]

Well not 'nobody', there's a few who get it.

Unfortunately current accounting principles and practices fail to recognise that the accumulated revenue is only repayable in a lessor percentage (the remains are float), and are repeatable and grow, ad infinitum, and ergo the withholdings or retained revenues are assets (albeit held as liabilities on the balance sheet under current accounting practices), that can be and are leveraged, interest free, into growth of the asset base.

Really, the fundamental value proposition of these RV's seems to be largely misunderstood which imo is surprising as the business model has been in play for decades. It must be imo because accounting practices do not or fail to account, for the value of the withholdings (retained earnings) and put them on the opposite side of the balance sheet ledger than where they in reality belong.

Like you say, there's circa a billion dollar of assets (cash) that is withheld and retained, but perversely, reported as a liability. WTF, it's insane. And people get upset about SP ratio to NTA, without realising NTA is, under current accounting practices devalued by ~a billion $

If they added those withheld/retained earnings, as assets, which they should, then the SP is massively below NTA/NAV, way more than the current 50% discount or thereabouts. Which makes the SP massively underpriced.

Go figure. It makes no sense. The beanies have control of the narrative when reality is far from it.

cause there recorded as a liability. cause you owe the residents back most of the float as some point in time.

[SailorRob]

cause there recorded as a liability. cause you owe the residents back most of the float as some point in time.


Thanks for the clarification here Bull, I knew you would understand.

[bull....]

NTA Net Tangibles. I think you are telling half the story for a beat up. The cash handed over for the occupation rights is recorded as well. Netting out in the accounts.

yep in accounting there is always a match off some where.

[bull....]

Thanks for the clarification here Bull, I knew you would understand.

exactly. you should be able to explaiun to us why it is sensible RV's are pulling back on expanding the float at the moment.

[SailorRob]

yep in accounting there is always a match off some where.


Taken me a while to get it, but you really are one step ahead of the herd.

[winner69]

exactly. you should be able to explaiun to us why it is sensible RV's are pulling back on expanding the float at the moment.


Doesn’t make sense eh bull …..not trying to grow the float that is

[mike2020]

Doesn’t make sense eh bull …..not trying to grow the float that is

You two are just baiting, it's just supply and demand in the market right now.

Hows this?

More than 19,000 home loan payments overdue as high interest rates hit mortgage holders - NZ Herald (https://www.nzherald.co.nz/business/more-than-19000-home-loan-payments-overdue-as-interest-rates-pain-drags-on/HGE3Y6TJLFEBLN7XCA6CDFVNSY/)

[winner69]

You two are just baiting, it's just supply and demand in the market right now.

Hows this?

More than 19,000 home loan payments overdue as high interest rates hit mortgage holders - NZ Herald (https://www.nzherald.co.nz/business/more-than-19000-home-loan-payments-overdue-as-interest-rates-pain-drags-on/HGE3Y6TJLFEBLN7XCA6CDFVNSY/)

Sensational headline to catch your attention ……that 19,000 less than few months ago and below historical highs

Nothing to see here …just normal having arrears

[Daytr]

A new retirement village nearby has halted all construction on the next phase and let go the entire building team as they are struggling to sell the units from the previous stage.

[bull....]

Taken me a while to get it, but you really are one step ahead of the herd.

exactly. anyway what about the float ? your the expert

[bull....]

A new retirement village nearby has halted all construction on the next phase and let go the entire building team as they are struggling to sell the units from the previous stage.

devastating for the float

[Maverick]

You guys must be bored… “why are RV’s throttling build rates?”

Jenny Ruths article today is brilliantly written. I will be subscribing after seeing the quality of her work.
She nicely articulates the capital intensiveness of apartment building , coupled with unfortunate macro circumstances has caught RYM (I say ARV too) with their pants down .

RYM are in the middle and ARV (to a lesser extent) are towards the beginning of the cashflow millstone of apartment construction , SUM seem to have avoided the problem by mostly sticking with their villas.

OCA, you would think, would be most negatively affected of all. But the twist to this is that they are currently in the sweet (or lucky) spot of embarking on the second to last phase …..the capital release phase. In other words , reaping reward from the 5years of slog.They just started construction much earlier than RYM and ARV. Now they have their truck load of finished stock to sell as the property market unfreezes.
I strongly disagree with what Craigs are saying…they are actually selling well. Plenty of proof.

All this cash flow is the big focus for analysts right now. The old can to kick around, “Care” , is now way on the back burner. It appears the market is currently rerating RV values based on this. We now see ARV and OCA share prices going in different directions based on this, which is historically unusual.

We know prices are still being lifted, sales are returning to good volumes and margins will aggregately rise considering Heliers contribution. …the Holy Trinity for profit growth.

I also applaud OCA for clearly telling us the margins of the individual sites as per the “all in cash returns” HY slides of the various cities.

ForBar have said , should OCA pull off this change to cash positive then the market will rerate it accordingly.

My work says this is inevitable in this HY we are currently in. I expect cashflow positive $20m 2HY.

All of this is now pretty easy to work out, and the value is now in plain sight for anybody willing to do a bit of work.

While it's only been a week since reporting, the recent share price movements suggest the markets are getting it.

[SailorRob]

exactly. anyway what about the float ? your the expert


* You're...

[Ggcc]

* You're...

I used to check on people's grammar, until I noticed some of the least educated had the most money in their bank accounts and the most intellectual people survived day to day financially. A lesson I needed to learn.

[Jenny Ruth]

Hi all. Hi all. My latest column published this morning on my Substack, Just the Business, looks at how Jarden's Arie Dekker is at last seeing fruits of his campaign to persuade the listed retirement village operators to improve their disclosure. Under the headline: Aiming for transparency from listed retirement village operators, it concludes with a piece of Charlie Munger's wisdom. You can read it here: https://justthebusinessjennyruth.substack.com/p/aiming-for-transparency-from-listed

[SailorRob]

I used to check on people's grammar, until I noticed some of the least educated had the most money in their bank accounts and the most intellectual people survived day to day financially. A lesson I needed to learn.

I'm confident Bull is the exception to this observation of yours.

Having a lot of money in a bank account is certainly a sign of lacking financial education.

[Bjauck]

I used to check on people's grammar, until I noticed some of the least educated had the most money in their bank accounts and the most intellectual people survived day to day financially. A lesson I needed to learn. What is the lesson? You get a free pass on breaking rules if you are rich? Tbh I would have thought clarity of communication would have been asset for a wealthy person as well as for anybody else.

[bull....]

market does not care if you can read or write

[Ggcc]

What is the lesson? You get a free pass on breaking rules if you are rich? Tbh I would have thought clarity of communication would have been asset for a wealthy person as well as for anybody else.
The lesson I got was a humbling one. At a young age I was of the impression only intelligent people were rich. I used to judge harshly about grammar and needed to have my eyes opened. Plenty of school drop outs I know made it better financially than loads of intelligent people I know. As for the free pass on breaking rules on being rich............ Nothing to do with what I was getting at.

[Ggcc]

market does not care if you can read or write
Agree with this

[WAIKEN]

Great commentary Maverick
Nov/Dec 2023 may be the nadir of commercial property and thus RV valuations and sentiment. We will find out during 2024.
I spoke to a high performing commercial property sales manager earlier this year who has sold properties for a large trust that I recently retired from as an independent trustee . I asked about the disconnect between interest rate driven property valuation methodology and reality. He said he was selling plenty of properties to astute long term investors who were looking through the under valuations produced by the sclerotic mandated valuation methodology and the true value. These investors are willing to buy on what seems a low yield because they have calculated - the cost of the bare land and the replacement cost of the building including the onerous legal, consenting, engineering etc fees. Where the market price is deeply discounted to the NTA they jump in. That is why I am holding more shares than the directors who have just topped up their holdings in OCA. For me RV stocks are essentially a property play.

[WAIKEN]

Sorry Holding more shares than 2 of the directors but a reasonable percentage of what Liz Coutts holds

[Ggcc]

I'm confident Bull is the exception to this observation of yours.

Having a lot of money in a bank account is certainly a sign of lacking financial education.
I know you two have "your" beef lol. It also seems neither of you is highly offended

[Maverick]

Great commentary Maverick
Nov/Dec 2023 may be the nadir of commercial property and thus RV valuations and sentiment. We will find out during 2024.
I spoke to a high performing commercial property sales manager earlier this year who has sold properties for a large trust that I recently retired from as an independent trustee . I asked about the disconnect between interest rate driven property valuation methodology and reality. He said he was selling plenty of properties to astute long term investors who were looking through the under valuations produced by the sclerotic mandated valuation methodology and the true value. These investors are willing to buy on what seems a low yield because they have calculated - the cost of the bare land and the replacement cost of the building including the onerous legal, consenting, engineering etc fees. Where the market price is deeply discounted to the NTA they jump in. That is why I am holding more shares than the directors who have just topped up their holdings in OCA. For me RV stocks are essentially a property play.

All good points and why wouldn’t that stagergy work long term.

I personally see commercial property as a net investment in the future health of the NZ economy. Where as RV property is an investment in the wealth and volume of our elderly.

From my personal observations , over decades, ALL folk change that were once astute business people (who really felt the value of a dollar and need to make more money) to reach about 75-80 year olds who become willing to exchange plenty of that wealth for carefree living and more especially ….living amongst companions. This surely is the only reason why the ORA contract works so well.

Generally, all consider care as needs based and units as a choice of lifestyle. I differ and see units as also needs based - for those who can afford it.
I look down my small but well heeled street and see 5 out of 6 neighbours all living alone. Spouses have died.

Some have family but most visters are few. These are the demographic who can, and will, move to a RV unit suitable of their pay grade.

Working at the high end offering quality to this demographic is where profit lurks.

I think your comment about property now in its nadir is prescient.

[SailorRob]

The lesson I got was a humbling one. At a young age I was of the impression only intelligent people were rich. I used to judge harshly about grammar and needed to have my eyes opened. Plenty of school drop outs I know made it better financially than loads of intelligent people I know. As for the free pass on breaking rules on being rich............ Nothing to do with what I was getting at.

Yep, very true, I have noticed the same. Different types of intelligence.

[winner69]

Sell now at 74c..buy back next week at 69c next week. Rinse n repeat

Good call there X-men

[bull....]

74c is the old support from prior range , now resistance.

[winner69]

74c is the old support from prior range , now resistance.

Why do funny things happen to OCA price at these month end extend sessions …like 31 May it closed way up at 84 before dropping back next day

[Daytr]

The lesson I got was a humbling one. At a young age I was of the impression only intelligent people were rich. I used to judge harshly about grammar and needed to have my eyes opened. Plenty of school drop outs I know made it better financially than loads of intelligent people I know. As for the free pass on breaking rules on being rich............ Nothing to do with what I was getting at.

I must infuriate you Ggcc!:)
Being a grammar or spelling Nazi isn't necessarily a sign of intelligence. I know plenty of very literary people, including authors and poets that don't have a clue about other disciplines and visa versa. On the whole most of those people are highly educated and knowledgeable in their selected fields.
There are several types of intelligence, some a big picture people, others detail oriented etc.
Basically, I find its best not to pigeon hole people or try not to assume.

[Daytr]

Oh man here we go!!!

See this is why I say nobody gets it.

There are about 4 of us that do... even when you explain it some folk cannot get it through their skull!

Without this supreme ignorance we as investors would have a hard time of it.


So far over the head it's not funny.

Talk yourself up why don't you!
I asked a couple of basic questions and picked up the concept in about 10 seconds, without even having looked at the balance sheet, which I will when I get time to assess how much value is understated.
It's hardly rocket science buddy.

Baa_Baa managed to explain it in one succinct sentence.


It is not realised by the assets, its value will be realised in long term discounted cash flows.

How many years do you say you have been trying to explain it?

[bull....]

Why do funny things happen to OCA price at these month end extend sessions …like 31 May it closed way up at 84 before dropping back next day

yep ive always said OCA is a great trading stock , plenty of golden nugget opp's patterns turn up and you have highlighted one. works till it doesnt

[SailorRob]

I must infuriate you Ggcc!:)
Being a grammar or spelling Nazi isn't necessarily a sign of intelligence. I know plenty of very literary people, including authors and poets that don't have a clue about other disciplines and visa versa. On the whole most of those people are highly educated and knowledgeable in their selected fields.
There are several types of intelligence, some a big picture people, others detail oriented etc.
Basically, I find its best not to pigeon whole people or try not to assume.

*pigeon hole

[SailorRob]

Talk yourself up why don't you!
I asked a couple of basic questions and picked up the concept in about 10 seconds, without even having looked at the balance sheet, which I will when I get time to assess how much value is understated.
It's hardly rocket science buddy.

Neither is the difference between whole and hole or that something can be undervalued more than 100% but people struggle still.

[Daytr]

Neither is the difference between whole and hole or that something can be undervalued more than 100% but people struggle still.

Yawn. Predictive text, blurry hayfever loaded eyes at this time of year.
But hey concentrating on the big things as ever.
You must be such a fun guy to be around...

More than 100% undervalued, I.e multiples of value. Again simplistic stuff.
Have you ever considered it's the way you present things that confuses people?
You seem to be the common denominator.

[Joshuatree]

Hi all. Hi all. My latest column published this morning on my Substack, Just the Business, looks at how Jarden's Arie Dekker is at last seeing fruits of his campaign to persuade the listed retirement village operators to improve their disclosure. Under the headline: Aiming for transparency from listed retirement village operators, it concludes with a piece of Charlie Munger's wisdom. You can read it here: https://justthebusinessjennyruth.substack.com/p/aiming-for-transparency-from-listed

Thanks Jenny,this is well worth reading folks.Like the Charlie Munger quote too

"Every time you hear ebitda, just substitute it with bull****"