OCA - Oceania Group - retirement villages

[SailorRob]

Do you know how to read a cash flow statement?

Try page 19 : http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/422074/407731.pdf

OCA has been running cashflow deficits - funded by ever increasing debts.


Yeah clearly you don't understand how to read one.

The cash is pouring in...

Looking in the wrong section as you don't understand the model.

[SailorRob]

Yes, ultimately the CF statement tells the story.

With debt (excluding ORA's) sitting a touch over $600M and the market cap hovering around $400M... all other things considered with the economy, staff shortages, regulatory risk, higher interest rates etc etc...

With the company being valued at an EV of around $1B, I don't think one can argue that OCA is way undervalued.

Correct, saying way undervalued would not convey the message properly.

[Balance]

Yeah clearly you don't understand how to read one.

The cash is pouring in...

Looking in the wrong section as you don't understand the model.

Haha - which is why OCA is having to stop paying dividends, sell assets and slow down developments?

[mistaTea]

Haha - which is why OCA is having to stop paying dividends, sell assets and slow down developments?

Dividends have not been stopped, but have been significantly reduced. Does not negate the underlying point you are making, but just want to make sure our statements are accurate.

[Greekwatchdog]

Balance is just a little frustrated as he called out a CR that never eventuated so he has a crushed EGO.

They stopped paying one at the Half Year 23. I am hoping they don't pay a Final out on Friday 24th when they report.

[Baa_Baa]

Dividends have not been stopped, but have been significantly reduced. Does not negate the underlying point you are making, but just want to make sure our statements are accurate.

22/11/23 Half Year - "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.”

[SailorRob]

Balance is just a little frustrated as he called out a CR that never eventuated so he has a crushed EGO.

They stopped paying one at the Half Year 23. I am hoping they don't pay a Final out on Friday 24th when they report.

I'll try dig out his statements that a capital raise was guaranteed, and also teach him some cash flow basics.

Doesn't seem to understand the perpetual cashflows from ORAs.

[SailorRob]

22/11/23 Half Year - "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.”

No, no Baa_Baa. You're using facts...

You just have to make things up like balance.

[winner69]

Do you know how to read a cash flow statement?

Try page 19 : http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/422074/407731.pdf

OCA has been running cashflow deficits - funded by ever increasing debts.

Heck Balance ….that shows they burnt through $60.5m and had to borrow about that much from the banks to cover it

And that’s just for 6 months ……and I thought they were at “peak debt” or some phrase like that

[mistaTea]

22/11/23 Half Year - "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.”

Ok cheers, so the resumption is not guaranteed in which case Balance's original comment was correct.

My bad.

[SailorRob]

Heck Balance ….that shows they burnt through $60.5m and had to borrow about that much from the banks to cover it

And that’s just for 6 months ……and I thought they were at “peak debt” or some phrase like that

And what happened to the balance sheet Sport?

What happened to the old winner too.

[Balance]

Balance is just a little frustrated as he called out a CR that never eventuated so he has a crushed EGO.

They stopped paying one at the Half Year 23. I am hoping they don't pay a Final out on Friday 24th when they report.

No sweat, Gwd - all cool watermelon on a hot summer day to me! No ego on the line as I am here to learn as much as I impart.

Sp crushed though from the decision to stop paying dividends, sell assets and slow developments instead of a CR?

[Greekwatchdog]

No sweat, Gwd - all cool watermelon on a hot summer day to me! No ego on the line as I am here to learn as much as I impart.

Sp crushed though from the decision to stop paying dividends, sell assets and slow developments instead of a CR?

Don't forget too add the Mint and Feta too your watermelon Balance. Its a great Greek summer salad.

[winner69]

And what happened to the balance sheet Sport?

What happened to the old winner too.

I see DMF on Balance Sheet went up from $45.334m to $45,830m in those 6 months

Doesn’t seem very much of an increase in light of all those sales …….must be consuming it at a fast rate

[winner69]

Ok cheers, so the resumption is not guaranteed in which case Balance's original comment was correct.

My bad.

Used the growth excuse eh ….couldn’t really say we shouldn’t borrow any more to do that growth so we’ll stop the dividend for a while ……and then do a capital raise

[mistaTea]

Used the growth excuse eh ….couldn’t really say we shouldn’t borrow any more to do that growth so we’ll stop the dividend for a while ……and then do a capital raise

Yeah. No idea about likelihood of a CR... but I would think that the $600M of debt must be getting a bit uncomfortable in the current economic environment.

[Balance]

Don't forget too add the Mint and Feta too your watermelon Balance. Its a great Greek summer salad.

Ah, must try that next summer!

Thx, Gwd!

One learns something new everyday!

[Balance]

I see DMF on Balance Sheet went up from $45.334m to $45,830m in those 6 months

Doesn’t seem very much of an increase in light of all those sales …….must be consuming it at a fast rate

Precisely!

Have to wonder how many shareholders or investors actually understand the implications of how they amortise DMF!

And what happens with profits and the DMF when sales stop growing (repeat, growing).

[winner69]

Yeah. No idea about likelihood of a CR... but I would think that the $600M of debt must be getting a bit uncomfortable in the current economic environment.

Forbar say it’ll be about $650m at March 24 year end

[Balance]

Forbar say it’ll be about $650m at March 24 year end

No CR imo but no dividend also.

[SailorRob]

No CR imo but no dividend also.


Yeah you have nailed all your calls so far, and you understand exactly why the SP is down... Hasn't just tracked all the other listed property companies eh, no it's specifically due to what you've discovered.

Good one.

[Balance]

Yeah you have nailed all your calls so far, and you understand exactly why the SP is down... Hasn't just tracked all the other listed property companies eh, no it's specifically due to what you've discovered.

Good one.

You figure out why the DMF went up so little after the H1 sales yet?

[Daytr]

I think you have to consider the NTA when saying have they burnt cash.
If new stock has been completed but not sold it adds to the asset side of the ledger, in that time is the increase in debt more or less than the increase in assets. I.e has the nta grown in that time.

I'm not near a computer to look back at that, but that would be the way to confirm.
Obviously a problem could eventuate that stock keeps growing creating a cashflow problem until they offload stock.

Anyway good day for OCA, just not as good as RYM... again.

If OCA represents the Wahs, perhaps RYM is the ABs.

[SailorRob]

I think you have to consider the NTA when saying have they burnt cash.
If new stock has been completed but not sold it adds to the asset side of the ledger, in that time is the increase in debt more or less than the increase in assets. I.e has the nta grown in that time.

I'm not near a computer to look back at that, but that would be the way to confirm.
Obviously a problem could eventuate that stock keeps growing creating a cashflow problem until they offload stock.

Anyway good day for OCA, just not as good as RYM... again.

If OCA represents the Wahs, perhaps RYM is the ABs.

Exactly my point thanks Daytr.

[thegreatestben]

Only a week to go until results are out, I'm hoping I'll be free enough to attend the webcast but it's my last day of work before I'm heading away for 6 weeks. Think a bit of a break from the madness might be just the ticket if Brent hasn't got good news.

[mike2020]

Its going to be ok either way. Either another 6 months to accumulate or we could suffer some unfortunately positive news leading to an unwelcome burst of optimism.

[SailorRob]

Its going to be ok either way. Either another 6 months to accumulate or we could suffer some unfortunately positive news leading to an unwelcome burst of optimism.

Great post.

[mistaTea]

Its going to be ok either way. Either another 6 months to accumulate or we could suffer some unfortunately positive news leading to an unwelcome burst of optimism.

He he, yes it OCA started to generate some positive news for a change it would be an absolute travesty :t_up:

[winner69]

It’s good that Oceania Retained Deficit’ (accumulative losses); >$200m in 2017 have reduced to about $37m as at Sept last.

Might even wipe that out next week ….then they call that line on Balance Sheet “Retained Earnings”

[SailorRob]

He he, yes it OCA started to generate some positive news for a change it would be an absolute travesty :t_up:

Yep, for those who's game it is to own as many shares as possible.

[thegreatestben]

I phrased my post intentionally subjective to see how others reacted.
Does anyone else listen to Modest Mouse? Their album "Good News for People Who Love Bad News" describes a few posters here on the OCA thread :t_up:

[ValueNZ]

I phrased my post intentionally subjective to see how others reacted.
Does anyone else listen to Modest Mouse? Their album "Good News for People Who Love Bad News" describes a few posters here on the OCA thread :t_up:
More of a TOOL man myself. I was surprised to learn the other day that NZ is their biggest selling market per capita.

[SailorRob]

https://www.interest.co.nz/property/127808/huge-overhang-unsold-properties-squeezing-housing-market-buyers-favour

[SailorRob]

It’s good that Oceania Retained Deficit’ (accumulative losses); >$200m in 2017 have reduced to about $37m as at Sept last.

Might even wipe that out next week ….then they call that line on Balance Sheet “Retained Earnings”

You don't retain earnings Sport, when other people are happy to cheaply finance your business and thus your cash flows without the ability to call capital back.

You may recall Warren explaining to us that there are many businesses out there, some very large, that can operate with no equity capital at all.

[winner69]

You don't retain earnings Sport, when other people are happy to cheaply finance your business and thus your cash flows without the ability to call capital back.

You may recall Warren explaining to us that there are many businesses out there, some very large, that can operate with no equity capital at all.

Think I get what you’re meaning mate ……but Oceania have retained about $200m of earnings since listing as well as borrowing about $150m to give dividends to shareholders

[Ggcc]

https://www.interest.co.nz/property/127808/huge-overhang-unsold-properties-squeezing-housing-market-buyers-favour
I currently have one of my houses for sale and will only sell at a small discount (lower than what I bought it for in 2021). I am happy to wait until house prices start rising as soon as interest rates start dropping and I totally feel they will start dropping by the end of the year. I have met people who say the same who are selling their properties.

2025 we will see house prices take off again and I feel all the retirement village stocks will as well.

[Habits]

https://www.interest.co.nz/property/127808/huge-overhang-unsold-properties-squeezing-housing-market-buyers-favour

Maybe they could use your advice. You could also visit 'the other place' to discuss shares in depth

[SailorRob]

I currently have one of my houses for sale and will only sell at a small discount (lower than what I bought it for in 2021). I am happy to wait until house prices start rising as soon as interest rates start dropping and I totally feel they will start dropping by the end of the year. I have met people who say the same who are selling their properties.

2025 we will see house prices take off again and I feel all the retirement village stocks will as well.


Given that no human in recorded history has a statistically significant track record of 'totally feeling' where rates will be in 7 months, I wouldn't bank on your totally cool vibes too much.

Check out the dot plots of the professional bond traders, pro economists etc..

So in 2025, what multiple does your feelings tell you that home prices to incomes will expand out to? Or are incomes going to go up bigly.

Interested in what you totally feel.

Consider that currently they are up there with the highest in history in the world, Japan in the 80's and Canada now probably higher.

[Balance]

Think I get what you’re meaning mate ……but Oceania have retained about $200m of earnings since listing as well as borrowing about $150m to give dividends to shareholders

And borrowed big too to buy ever more expensive land and fund ever more costly developments which are now in stock at highly inflated values.

Great strategy!

[SailorRob]

And borrowed big too to buy ever more expensive land and fund ever more costly developments which are now in stock at highly inflated values.

Great strategy!

It's a very good strategy, but not great.

[Habits]

Given that no human in recorded history has a statistically significant track record of 'totally feeling' where rates will be in 7 months, ..

Would Warren be

[SailorRob]

Would Warren be

Woz has stated many times that he has zero ability to predict future rates at any duration from tomorrow to the 50 year or 100 year rate.

[winner69]

WOW …Warriors have a stunning victory against all odds over the Panthers. Warriors 22 Panthers 20. Fans saying ‘yes, we are the real deal’ and the future is now looking good …a big reversal in form …’this is our year’ back on track.UP THE WAHS

Oceania share price also reversed last week, like it didn’t fall after 4 weeks of decline. Fans showed their support over the week …good analysis and cheering on. Yes, Oceania is the real deal …and all will see next Friday with stunning full year results. So ‘this is our year’ applies to them as well

So after 4 weeks of not winning and share price declines both Warriors and Oceania did well this week. That’s spooky, especially Warriors beating the highly rated Panthers. Next week going to be good for both so both on track to ‘this is ourvyesr’

UP THE WAHS ….GO OCEANIA

[SailorRob]

WOW …Warriors have a stunning victory against all odds over the Panthers. Warriors 22 Panthers 20. Fans saying ‘yes, we are the real deal’ and the future is now looking good …a big reversal in form …’this is our year’ back on track.UP THE WAHS

Oceania share price also reversed last week, like it didn’t fall after 4 weeks of decline. Fans showed their support over the week …good analysis and cheering on. Yes, Oceania is the real deal …and all will see next Friday with stunning full year results. So ‘this is our year’ applies to them as well

So after 4 weeks of not winning and share price declines both Warriors and Oceania did well this week. That’s spooky, especially Warriors beating the highly rated Panthers. Next week going to be good for both so both on track to ‘this is ourvyesr’

UP THE WAHS ….GO OCEANIA

Results will likely be middling to crap. Mav will post about being extremely disappointed and sell some shares, 2 days later he will repost having crunched the data and found some anomaly than he now sees as very positive, but the shares back and boldly predict $2 by Xmas.


So just a repeat of what happens every year.

[Baa_Baa]

Results will likely be middling to crap.

We’ve already been softened up with the recent unexpected announce, these results will just put a full stop on the annual which I expect to ok. More interesting will be some insights into the past two months and outlook for the year. Friday, not long to wait now

[Ggcc]

Given that no human in recorded history has a statistically significant track record of 'totally feeling' where rates will be in 7 months, I wouldn't bank on your totally cool vibes too much.

Check out the dot plots of the professional bond traders, pro economists etc..

So in 2025, what multiple does your feelings tell you that home prices to incomes will expand out to? Or are incomes going to go up bigly.

Interested in what you totally feel.

Consider that currently they are up there with the highest in history in the world, Japan in the 80's and Canada now probably higher.
I agree that your way is the proper way to try to work out whether interest rates might drop rather than a self calculated guess.

I also know that my feelings I have are gut instincts of what I personally believe will eventuate. My personal belief is the average house prices will rise by over 5-8% over the next 12 months. Of course I can adjust this thought with more information provided.

[SailorRob]

I agree that your way is the proper way to try to work out whether interest rates might drop rather than a self calculated guess.

I also know that my feelings I have are gut instincts of what I personally believe will eventuate. My personal belief is the average house prices will rise by over 5-8% over the next 12 months. Of course I can adjust this thought with more information provided.

Fair enough, but I don't have a way to try work out whether rates might drop, and I don't know anyone who does!

That is what I was trying to say.

[Habits]

Fair enough, but I don't have a way to try work out whether rates might drop..

I dont know when rates will drop... There fixed. Alot would agree with that, some argue It'll be this year others argue next year. Some say RBNZ stays hawkish until it isnt

[SailorRob]

I will get 100% of my money back plus interest while you will still be wondering about float(ing) sunken OCA boats. :D


Oceania will 100% for certain do a capital raise before the end of 2023.

[Mrbuyit]

^^ they did, it was in 2021 (which is before the end of 2023), they spent the money at Hobsonville and some other places too, but i specifically remember the render looking pretty flash, which hooked me in..

[SailorRob]

^^ they did, it was in 2021 (which is before the end of 2023), they spent the money at Hobsonville and some other places too, but i specifically remember the render looking pretty flash, which hooked me in..


Correct that was before the end of 2023 but also before Balance said another one was 100% certain.

That was good capital allocation and we can now buy that money for cents on the $, some very smart very sophisticated investors and insiders put real cash into the company back than which is arguably worth a lot more now and you can buy it up for a hell of a lot less.

Every molecule that money was spent buying is now *Nominally* worth a hell of a lot more.

[mike2020]

Oceania will 100% for certain do a capital raise before the end of 2023.

I have adjusted my target price for OCA from 1 IFT for 20 OCA (was going to happen tomorrow) to 30 for 1 accordingly.

[nztx]

Are OCA collectable yet or still in drift mode ? :)

[RTM]

I have adjusted my target price for OCA from 1 IFT for 20 OCA (was going to happen tomorrow) to 30 for 1 accordingly.

I'm hoping your target is accurate and OCA get to a $1.50 soon.

[mike2020]

What we need is IFT to buy OCA.

[Jenny Ruth]

I suspect IFT is too canny to buy OCA unless they could see some real benefits in changing its strategy - I mention OCA in my lastest column published on my Substack, Just the Business, previews what the listed retirement village operators will tell us when they report their annual results on Friday this week and Tuesday and Wednesday next week.
The headline is: Can the listed retirement village operators dispel some murk?
And you can find it here:
https://substack.com/@justthebusinessjennyruth

[ValueNZ]

I suspect IFT is too canny to buy OCA unless they could see some real benefits in changing its strategy - I mention OCA in my lastest column published on my Substack, Just the Business, previews what the listed retirement village operators will tell us when they report their annual results on Friday this week and Tuesday and Wednesday next week.
The headline is: Can the listed retirement village operators dispel some murk?
And you can find it here:
https://substack.com/@justthebusinessjennyruth
"By accessing, using and posting material on Tarawera Publishing Ltd's ("Tarawera") share information web site ("Sharetrader"), you as the User agree to abide by the following terms, conditions and rules ("Agreement").While Tarawera invites Users to engage in open discussion and presentation of views on Sharetrader, Tarawera and Users agree to seven basic rules designed to maintain Sharetrader as an interesting, informative, and legally permissible forum:
...
3. Users will not use Sharetrader to advertise or sell products or services (including financial products and services such as securities) to others; or for spamming purposes to promote or encourage members to purchase products, services, or membership recruitment to others; doing so may incur a fee"

Your spamming of the forum with your paywalled articles is clearly in violation of Sharetraders terms and conditions. Usually I wouldn't care, but it's getting annoying clicking on your links to see a paywall... Anyone else agree?

[winner69]

You not having a good day Value …take care and look after yourself

Kia Kaha

if I posted something along the lines of ‘Jenny Ruth sums up sector issues’ and included the link would I be doing wrong as well

[Daytr]

Jenny Ruth's posts don't bother me. It's not like she is serial posting.

[SailorRob]

Jenny Ruth's posts don't bother me. It's not like she is serial posting.

Sport, perhaps you're not self aware enough to realise that it's not about whether it bothers day trader or not.

It doesn't matter at all what bothers you or doesn't.

[Daytr]

Sport, perhaps you're not self aware enough to realise that it's not about whether it bothers day trader or not.

It doesn't matter at all what bothers you or doesn't.

Get a life buddy.
Asked a question I answered.
The Wah fans are sure getting titchy on this thread. Pre game / release nerves.

[Greekwatchdog]

Get a life buddy.
Asked a question I answered.
The Wah fans are sure getting titchy on this thread. Pre game / release nerves.

No nerves from this fan, my own expectations are low the full year so no surprise if this hits $0.50.

As for the warriors I gave up on them a long time ago.

[ValueNZ]

No nerves from this fan, my own expectations are low the full year so no surprise if this hits $0.50.

As for the warriors I gave up on them a long time ago.
Ditto. Best thing would be a solid result and a declining share price.

[Daytr]

So how far does this deep value theory go?
ValueNZ you are unlikely to get what you wish for.

Poor report sub 50c = deeper value
Good report 60c + = deep value
Shocker of a report sub 40c = Mariner Trench value or Titanic value?

[ValueNZ]

So how far does this deep value theory go?
ValueNZ you are unlikely to get what you wish for.

Poor report sub 50c = deeper value
Good report 60c + = deep value
Shocker of a report sub 40c = Mariner Trench value or Titanic value?
Ideally the discount to intrinsic value grows, so I can buy discounted cash flows off punters for less. It's as simple as that.

I want the business to do well (duh), but I also want the share price to drop. More bang for buck.

[Daytr]

Ideally the discount to intrinsic value grows, so I can buy discounted cash flows off punters for less. It's as simple as that.

I want the business to do well (duh), but I also want the share price to drop. More bang for buck.

Yep so you have said over & over & its overly simplistic as it makes a lot of assumptions.
Anyway, looking forward to seeing the report.

I agree with Winner that activity in real estate has picked up modestly so over time it should be a positive for OCA.

[mistaTea]

https://www.nzherald.co.nz/sport/warriors-v-panthers-school-principal-gives-motivational-speech-to-students-following-big-warriors-win/SYHIHMZLRVCQ3GLE4EGHX4AG2Y/

I think this Principle needs to get on here for a bit of RAHH RAHH too…

[SailorRob]

Yep so you have said over & over & its overly simplistic as it makes a lot of assumptions.


In direct relation to the ValueNZ post that you replied the above, can you please highlight just ONE assumption he made in the post?

You have said he made a LOT, I'm just asking, Day Trader, for one.

Thanks.

SR

[Daytr]

In direct relation to the ValueNZ post that you replied the above, can you please highlight just ONE assumption he made in the post?

You have said he made a LOT, I'm just asking, Day Trader, for one.

Thanks.

SR

Sure, the major assumption which is critical is what the future cashflows will be.
Assumption made on what the net DMF is
Assumption made in the profit on new sales.
Assumption made on the profit on resales.
Assumption made on the day to day operating profit.
There are probably more, every forward model makes assumptions.

[Bjauck]

if I posted something along the lines of ‘Jenny Ruth sums up sector issues’ and included the link would I be doing wrong as well If you are actually Jenny Ruth promoting her own products, then yes. However it is up to this site to police their rules. At the least Jenny Ruth should clearly state that the off-site link to her own review is paywalled.

[SailorRob]

Sure, the major assumption which is critical is what the future cashflows will be.
Assumption made on what the net DMF is
Assumption made in the profit on new sales.
Assumption made on the profit on resales.
Assumption made on the day to day operating profit.
There are probably more, every forward model makes assumptions.


Day Trader.

He stated that;

Ideally the discount to intrinsic value grows


I want the business to do well (duh)


​​Neither of these statements are assumptions. Perhaps you need to look up the definition.


Thanks for playing.

[SailorRob]

If you are actually Jenny Ruth promoting her own products, then yes. However it is up to this site to police their rules. At the least Jenny Ruth should clearly state that the off-site link to her own review is paywalled.


What she needs to say is that she is trying to write and sell articles about business analysis which will help other people make informed decisions and thus make profitable investments.

She is doing this instead of actually making money herself or for other people who entrust their capital with her.

If she is a good analyst then she should be investing all her own capital and that of a number of friends and family as well as the people unknown to her who are clamouring to give her their money.

She will also be able to provide for us a track record of her own performance.

If she does not yet have significant capital of her own, then she will not own a home as this would be a huge drain on the limited capital she has that she can earn much higher rates of returns on.

[Daytr]

Day Trader.

He stated that;

Ideally the discount to intrinsic value grows


I want the business to do well (duh)


​​Neither of these statements are assumptions. Perhaps you need to look up the definition.


Thanks for playing.

Do you have any scruples?
He didn't just say that, you are being selective & arrogant.

[Daytr]

Ideally the discount to intrinsic value grows, so I can buy discounted cash flows off punters for less. It's as simple as that.

I want the business to do well (duh), but I also want the share price to drop. More bang for buck.


Day Trader.

He stated that;

Ideally the discount to intrinsic value grows


I want the business to do well (duh)


​​Neither of these statements are assumptions. Perhaps you need to look up the definition.


Thanks for playing.

Here it is for the record. See the bit you failed to include about discounted cashflows.

You will do anything to score points and protect your OCA Fandom.
No morals, never own your mistakes.
And saying that's fair after abusing a poster is not owning your mistake.
You are dangerous as most fanatics are.

[SailorRob]

Here it is for the record. See the bit you failed to include about discounted cashflows.

You will do anything to score points and protect your OCA Fandom.
No morals, never own your mistakes.
And saying that's fair after abusing a poster is not owning your mistake.
You are dangerous as most fanatics are.

Still no assumption made in his statement at all.

Keep going though!

[Daytr]

Still no assumption made in his statement at all.

Keep going though!

Are you playing dumb?
I did say you will do anything to score points.

As I outlined in my earlier post in detail, the future cashflows are based on assumptions.

Now stop wasting my time.

[Lego_Man]

"By accessing, using and posting material on Tarawera Publishing Ltd's ("Tarawera") share information web site ("Sharetrader"), you as the User agree to abide by the following terms, conditions and rules ("Agreement").While Tarawera invites Users to engage in open discussion and presentation of views on Sharetrader, Tarawera and Users agree to seven basic rules designed to maintain Sharetrader as an interesting, informative, and legally permissible forum:
...
3. Users will not use Sharetrader to advertise or sell products or services (including financial products and services such as securities) to others; or for spamming purposes to promote or encourage members to purchase products, services, or membership recruitment to others; doing so may incur a fee"

Your spamming of the forum with your paywalled articles is clearly in violation of Sharetraders terms and conditions. Usually I wouldn't care, but it's getting annoying clicking on your links to see a paywall... Anyone else agree?


Doesn't bother me, she has great content and is entitled to make a living. Other sites make their money off advertising. Either way they benefit from eyeballs.

[SailorRob]

Doesn't bother me, she has great content and is entitled to make a living. Other sites make their money off advertising. Either way they benefit from eyeballs.

If the next door neighbour is fiddling and it doesn't bother you, that is beside the point.

The point ValueNZ was raising was rules...

[winner69]

Results tomorrow

I’ll be looking at-



Are average realised gains for both new sales and resales higher than last year (H1 they were down)
Any improvement in ‘Operating Loss’ they way I calculate it?
The state of cash flows ….cash burn has higher than previous periods
Is a capital raise likely

[bull....]

yep stick my neck out and say i think it be an poor announcement

[Greekwatchdog]

yep stick my neck out and say i think it be an poor announcement

Well thats already written in the clouds Bull. I am guessing debt will be higher, but will be at peak and reduce down from here. NO CR needed.
Be interested to see if the extra care funding has made an impact and of course Cash is king so improved cash flows.

Low expectations for me but will concentrate on FY25 targets and commentary.

[bottomfeeder]

Am looking for reinstatement of dividend.

[SailorRob]

Am looking for reinstatement of dividend.

What's your reasoning for this?

[Mrbuyit]

Am looking for reinstatement of dividend.

Potential to pick up a fist full of shares if they kick off the DRP too.

[Toddy]

Good luck guys. I know a lot of you on here have put hours of hard work into analysing the hell out of OCA.

[bull....]

dreaming if you think div will be back on. that be complete u - turn on last report

[X-men]

The headline....OCA will be delisted and leaving NZx...and pay the current holders at 50c a share

[SailorRob]

The headline....OCA will be delisted and leaving NZx...and pay the current holders at 50c a share

Who pays the current holders?

[X-men]

Orr and previous labour government

[Baa_Baa]

dreaming if you think div will be back on. that be complete u - turn on last report

Maybe dreaming, but not a u-turn on last report.

Last Report:

Dividend Policy
The Directors approved a change in 2023 to the dividend policy to a pay out ratio of 30% to 50% of Underlying Net Profit After Tax on 24 May 2023.

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.

That's tomorrow.

[winner69]

Wonder how much the FLOAT has grown in H2

Key metric

[mistaTea]

Wonder how much the FLOAT has grown in H2

Key metric

If the chairman or CEO don’t say float tomorrow we riot.

[Baa_Baa]

Wonder how much the FLOAT has grown in H2

Key metric

Not really, it's the driver of the 'float' growth that is the key metric. I've been repeating this for ages. Do I need to say it again?

[SailorRob]

Wonder how much the FLOAT has grown in H2

Key metric


Yeah I was going to post this in response to your 'what I'm looking at' post.

For me this is the number one metric as a lot is encompassed in the number.

[SailorRob]

Not really, it's the driver of the 'float' growth that is the key metric. I've been repeating this for ages. Do I need to say it again?


Yeah I agree Baa_Baa, this is what I meant by saying to Winner 'there's a lot encompassed in that number'

[SailorRob]

If the chairman or CEO don’t say float tomorrow we riot.


Best they stay quiet on it. Interestingly Summerset are much more open about this aspect.

[Rawz]

Wish everyone the best tomorrow. Remember it’s only money aye

[SailorRob]

Wish everyone the best tomorrow. Remember it’s only money aye

Well it's a business, an amalgamation of assets, a very small amount of which is money.

[Baa_Baa]

Interesting, Chris Lee reckons Ryman still in trouble and another cap raise coming ...

"In Ryman’s case there should be another placement soon, perhaps priced around $3.50. The believers would participate. The punters would punt. (Some market commentators disagree, believing that banks will not be pushing for capital increases. My view is that reliance on banks is a risky tactic.)

Ryman’s last placement was at $5.20. The shares are now priced around $4.00."

https://www.chrislee.co.nz/taking-stock

So homework tonight is 'what's the difference between OCA and Ryman, such that OCA won't need to do a cap raise'? Submit your homework here before 8:30am tomorrow prior to the FY results announcement.

[davflaws]

The headline....OCA will be delisted and leaving NZx...and pay the current holders at 50c a share

I have no idea where you are coming from but I don't enjoy your posts or find them particularly useful or informative.

Perhaps you could get your jollies over on the Elections or Off Market Discussion forums

[Bikeguy]

Wish everyone the best tomorrow. Remember it’s only money aye

Yes, good luck to all holders

[Baa_Baa]

Best they stay quiet on it. Interestingly Summerset are much more open about this aspect.

It's an extremely important underlying benefit to shareholders, of the business model, that OCA have access to $950m (held as a liability on the balance sheet), that has no interest payable, can be used for any purpose the company wants to, and is non-callable except the 30% repayable on resident exits which in itself is replaced by new residents, unless ~2,800 care suites and units all decided to leave at the same time. That's going happen, yeah right!

They should be making a song and dance about it, or at least spelling out to shareholders how fundamentally important the 'float' is to financial stability, growth and future earnings.

[SailorRob]

It's an extremely important underlying benefit to shareholders, of the business model, that OCA have access to $950m (held as a liability on the balance sheet), that has no interest payable, can be used for any purpose the company wants to, and is non-callable except the 30% repayable on resident exits which in itself is replaced by new residents, unless ~2,800 residents of care suites and units all decided to leave at the same time. That's going happen, yeah right!

They should be making a song and dance about it, or at least spelling out to shareholders how fundamentally important the 'float' is to financial stability, growth and future earnings.


What benefit would it be to spell out to shareholders though, the true measure of success for them would be if there were very limited transactions in their stock. Why would they actively want to change their shareholders? Would be better off if there was no trading at all - as it would be with a private business.

If you own a business with 5 of your school friends and the other 4 are always trying to transact with each other, something is wrong.

For me I'd rather that only myself, you, Mav, ValueNZ and Ferg know about it!

If I was looking to sell though yes I'd want a fair price from a knowledgeable buyer.

[Baa_Baa]

What benefit would it be to spell out to shareholders though, the true measure of success for them would be if there were very limited transactions in their stock. Why would they actively want to change their shareholders? Would be better off if there was no trading at all - as it would be with a private business.

If you own a business with 5 of your school friends and the other 4 are always trying to transact with each other, something is wrong.

For me I'd rather that only myself, you, Mav, ValueNZ and Ferg know about it!

If I was looking to sell though yes I'd want a fair price from a knowledgeable buyer.

# of shareholders <=> transactions in the stock. Average daily trading volume is only about 250k shares and has been for many months.

If everyone who is an existing shareholder truly understood what they own, and why, then I'd expect transaction volumes to significantly reduce, except for the traders looking for a flip or swing trade.

Fact is, none of us are selling or buying from each other, our only realistic mechanism for that is the sharemarket, and currently that massively under prices the business, imo. So I assume none of us is currently realistically looking for an exit at "a fair price" on the market. We would all be disappointed if we were doing that.

As an aside, if you look at the daily 'course of trades', there's a surprising number of very very low volume trades every day on this boring retirement village operator. Maybe Sharsies punters looking for a quick win, who knows. Certainly they're not heavily invested investors interested only in the long term prospects and outcomes of the company

[SailorRob]

# of shareholders <=> transactions in the stock. Average daily trading volume is only about 250k shares and has been for many months.

If everyone who is an existing shareholder truly understood what they own, and why, then I'd expect transaction volumes to significantly reduce, except for the traders looking for a flip or swing trade.

Fact is, none of us are selling or buying from each other, our only realistic mechanism for that is the sharemarket, and currently that massively under prices the business, imo. So I assume none of us is currently realistically looking for an exit at "a fair price" on the market. We would all be disappointed if we were doing that.

As an aside, if you look at the daily 'course of trades', there's a surprising number of very very low volume trades every day on this boring retirement village operator. Maybe Sharsies punters looking for a quick win, who knows. Certainly they're not heavily invested investors interested only in the long term prospects and outcomes of the company


​Yes you've made a very good point here.

[Balance]

It's an extremely important underlying benefit to shareholders, of the business model, that OCA have access to $950m (held as a liability on the balance sheet), that has no interest payable, can be used for any purpose the company wants to, and is non-callable except the 30% repayable on resident exits which in itself is replaced by new residents, unless ~2,800 care suites and units all decided to leave at the same time. That's going happen, yeah right!

They should be making a song and dance about it, or at least spelling out to shareholders how fundamentally important the 'float' is to financial stability, growth and future earnings.

So what happened with Ryman that its huge $4.88 billion free 'float' in Sept 2022 still necessitated the CR of $902 million in 2023? Interest bearing debt was $3.03 billion so Ryman's debt was 62% of the 'float' at the time.

OCA's 'float' was $935.7m vs debt of $617m as at Sept 2023 - ie. Debt was 66% of float, higher than that of Ryman when Ryman had to do the CR.

So should OCA be making a song and dance about the 'float'?

[Ferg]

So what happened with Ryman that its huge $4.88 billion free 'float' in Sept 2022 still necessitated the CR of $902 million in 2023? Interest bearing debt was $3.03 billion so Ryman's debt was 62% of the 'float' at the time.

Surely you know the Ryman CR was used to repay the USPP debt - a low fixed rate USD denominated debt that someone in their wisdom converted to NZD floating with hedging instruments. It was a monumental FUBAR which had nothing to do with the float. How is this comparable to OCA - do OCA hold USPP debt which they have converted from USD/fixed to NZD/floating??? /tui

https://www.livewiremarkets.com/wires/ryman-shareholders-pay-a-hefty-penalty
https://www.nzshareholders.co.nz/scrip-article/lessons-from-ryman-healthcare/

The first link highlights the 'penalty' but the author fails to see how it arose.

[Balance]

Surely you know the Ryman CR was used to repay the USPP debt - a low fixed rate USD denominated debt that someone in their wisdom converted to NZD floating with hedging instruments. It was a monumental FUBAR which had nothing to do with the float. How is this comparable to OCA - do OCA hold USPP debt which they have converted from USD/fixed to NZD/floating??? /tui

https://www.livewiremarkets.com/wires/ryman-shareholders-pay-a-hefty-penalty
https://www.nzshareholders.co.nz/scrip-article/lessons-from-ryman-healthcare/

The first link highlights the 'penalty' but the author fails to see how it arose.

Yes, I know that the CR was used to repay the USPP debt. But Ryman CHOSE to repay that debt early - the $902m CR meant that Ryman was in compliance with its debt obligations and it could have chosen to repay any debt, not necessarily the USPP debt.

As an aside, Ryman's 'float' was $5.379 billion vs interest bearing debt of $2.5 billion in Sept 2023 so debt was less than 50% of the 'float'. And Chris Lee reckons Ryman needs another CR??

Put it another way, Ryman's equity + float of $10.24b funded 78% of Ryman's total assets vs OCA's $1.953b funding 72.6% of OCA's total assets.

Re the 'float', you can see that my post 20356 was in direct response to Baa-Baa's post about how wonderful the 'float' is in providing financial stability, growth & future earnings - which in Ryman's case, it clearly did not.


Interesting, Chris Lee reckons Ryman still in trouble and another cap raise coming ...

"In Ryman’s case there should be another placement soon, perhaps priced around $3.50. The believers would participate. The punters would punt. (Some market commentators disagree, believing that banks will not be pushing for capital increases. My view is that reliance on banks is a risky tactic.)

Ryman’s last placement was at $5.20. The shares are now priced around $4.00."

https://www.chrislee.co.nz/taking-stock

So homework tonight is 'what's the difference between OCA and Ryman, such that OCA won't need to do a cap raise'? Submit your homework here before 8:30am tomorrow prior to the FY results announcement.

[Ferg]

Yes, I know that the CR was used to repay the USPP debt. But Ryman CHOSE to repay that debt early - the $902m CR meant that Ryman was in compliance with its debt obligations and it could have chosen to repay any debt, not necessarily the USPP debt.

Ryman had no business borrowing in USD, especially at rates in excess of 0.7. They have no natural hedge or any other business conducted in USD.

I believe the reason they chose to pay it back was the FX rates moved against them, as did interest rates. From memory the original USD rates were around 5.5% but they hedged backed to NZD using CCIRS instruments. In other words they took a gamble and lost. This has nothing to do with the operational side of the business.

And IMO their CEO is not being forthcoming with the $130m+ cost of existing the USPP debt early - instead he uses the word 'growth' in the same breath as raising capital which IMO was misleading:
https://www.nzherald.co.nz/business/regulator-looking-into-ryman-healthcare-raise/5IOR2WZ7MRFFNM46UGA4GC4QVU/
He is on from about half way through that interview.

TLDR: the Ryman USD USPP debt fiasco and the subsequent CR has zero bearing or relevance to the underlying operations and/or ORAs.

[Bikeguy]

Ryman had no business borrowing in USD, especially at rates in excess of 0.7. They have no natural hedge or any other business conducted in USD.

I believe the reason they chose to pay it back was the FX rates moved against them, as did interest rates. From memory the original USD rates were around 5.5% but they hedged backed to NZD using CCIRS instruments. In other words they took a gamble and lost. This has nothing to do with the operational side of the business.

And IMO their CEO is not being forthcoming with the $130m+ cost of existing the USPP debt early - instead he uses the word 'growth' in the same breath as raising capital which IMO was misleading:
https://www.nzherald.co.nz/business/regulator-looking-into-ryman-healthcare-raise/5IOR2WZ7MRFFNM46UGA4GC4QVU/
He is on from about half way through that interview.

TLDR: the Ryman USD USPP debt fiasco and the subsequent CR has zero bearing or relevance to the underlying operations and/or ORAs.

Well written, thank you

[SailorRob]

The real question is why is Balance hanging off this Chris Lee's every word.

We have explored in detail this guy and his past.

No wonder Balance said he guaranteed that OCA needed yo do a CR last year and then slinked off with tail between his legs.

Balance needs to hone his balance sheet skills.

[Daytr]

It's an extremely important underlying benefit to shareholders, of the business model, that OCA have access to $950m (held as a liability on the balance sheet), that has no interest payable, can be used for any purpose the company wants to, and is non-callable except the 30% repayable on resident exits which in itself is replaced by new residents, unless ~2,800 care suites and units all decided to leave at the same time. That's going happen, yeah right!

They should be making a song and dance about it, or at least spelling out to shareholders how fundamentally important the 'float' is to financial stability, growth and future earnings.

G it up G...
That 'float' is all spent in bricks & mortar & new stock, add an additional $617M of debt which we will see if that has grown today.

So the reinvestment into a business that isn't making any money operationally, is relying on sales & resales and that is relying on the property market.

I also don't necessarily think that having freedom to do what they want with the 'float' is a good thing. I hear hemp is a growth industry, let's chuck $100M at it...

I'm sure institutional investors & analysts understand the model & the company better than you, hence the current share price.

My expectation is for operating losses to increase as labour costs have increased further.
Sales is anyone's guess.

Good luck to all.

Wait for it....

[X-men]

Well no dividend n no CR

[winner69]

Stunning result

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/431667/419253.pdf

[allfromacell]

Stunning result

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/431667/419253.pdf


Hey Winner, do you mind posting the same link to the full report? I'm getting errors using the NZX website.

Edit: never-mind working now

[Greekwatchdog]

Hey Winner, do you mind posting the same link to the full report? I'm getting errors using the NZX website.

Its up and running now.

Looks good thou havent got time to review. Happy no divvie. Market reaction is the one that counts

[winner69]

FLOAT now over $1billion

[winner69]

Hey Winner, do you mind posting the same link to the full report? I'm getting errors using the NZX website.

Edit: never-mind working now

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/431669/419257.pdf

[Toddy]

You guys buying today?

[X-men]

Too late now...SP will be around $1.30...when market open

[Toddy]

Too late now...SP will be around $1.30...when market open

Poor me, I'm always the one missing out.

[Sideshow Bob]

No CEO Chat??

https://www.nzx.com/announcements/431670

Oceania Healthcare Limited advises that Suzanne Dvorak has today been appointed as Chief Executive Officer.

Suzanne has been in the Australian aged care and retirement living sectors for the past decade which included leading the single largest residential aged care provider in Australia.She has most recently been an external advisor at Bain & Company in Melbourne.

Oceania Healthcare Board Chair, Liz Coutts, said today “the Board is delighted to announce Suzanne’s appointment as CEO of Oceania Healthcare, and we are looking forward to the valuable contribution Suzanne will make to the business.

Suzanne has extensive experience in aged care and retirement living, which will position her well to lead Oceania through its next phases.”Ms Dvorak commented “it will be a privilege to lead Oceania Healthcare, and I am excited to be joining the business at this time as Oceania grows its retirement communities and optimises its aged care operations.

”Ms Dvorak will commence on 22 July 2024 and will relocate from Melbourne to Auckland.Prior to her current role, Ms Dvorak held roles as Transitional CEO of Levande, Managing Director of Bupa Villages and Aged Care, Australia, and Executive General Manager of Residential Communities for Australia Unity.

Ms Dvorak has a Bachelor of Teaching and a Master of International Business from Curtin University, Western Australia.

Mrs Coutts confirmed that Mr Pattison will continue as Chief Executive Officer until Ms Dvorak’s commencement date to support Ms Dvorak’s introduction to the business.

I’d like to thank Mr Pattison for his continued leadership and support since the announcement of his resignation earlier in the year.This announcement has been authorised for release by Oceania's board of directors.

ENDS.

[bull....]

looks like it all came from revaluations lol , new sales down were they not ? re-sales were the bright spot just like all other RV's but report just looks in similar vein to all other RV'S nothing special in this.

[Lease]

looks like it all came from revaluations lol , new sales down were they not ? re-sales were the bright spot just like all other RV's but report just looks in similar vein to all other RV'S nothing special in this.

New sales 157 in 2024 vs 128 in 2023.

[mistaTea]

looks like it all came from revaluations lol , new sales down were they not ? re-sales were the bright spot just like all other RV's but report just looks in similar vein to all other RV'S nothing special in this.

Yeah it's a tricky one with OCA. Company not producing owner earnings at the moment. GAAP earnings only exist because of property valuation changes.

And for the property valuation to only increase by $60M when they have borrowed $87M is not great.

The hope for OCA is that eventually, once they have stopped building and have gotten debt down to more manageable levels, then the owners will see the cash come rolling in.

But there is still a lot of uncertainty around how it all plays out.

Be interesting to see what Mr Market makes of it today.

[Sideshow Bob]

Too late now...SP will be around $1.30...when market open


If only......:sleep:

[bull....]

Yeah it's a tricky one with OCA. Company not producing owner earnings at the moment. GAAP earnings only exist because of property valuation changes.

And for the property valuation to only increase by $60M when they have borrowed $87M is not great.

The hope for OCA is that eventually, once they have stopped building and have gotten debt down to more manageable levels, then the owners will see the cash come rolling in.

But there is still a lot of uncertainty around how it all plays out.

Be interesting to see what Mr Market makes of it today.

yep debt an issue still , hence there comment on debt reduction still being a priority

[RTM]

yep debt an issue still , hence there comment on debt reduction still being a priority

…and no dividend.That will help a bit.

[Balance]

Yeah it's a tricky one with OCA. Company not producing owner earnings at the moment. GAAP earnings only exist because of property valuation changes.

And for the property valuation to only increase by $60M when they have borrowed $87M is not great.

The hope for OCA is that eventually, once they have stopped building and have gotten debt down to more manageable levels, then the owners will see the cash come rolling in.

But there is still a lot of uncertainty around how it all plays out.

Be interesting to see what Mr Market makes of it today.

Revaluations up to offset increases in operating losses and debts.

Sounding like what rentals are about?

Will the market buy the increased valuations when property values out in the real world are down, down and still under pressure?

[Lego_Man]

Waiting for someone smarter than me to explain whether this is a really good result, or accounting sleight of hand.

[Leemsip]

I agree Legoman.., the accounts arent straight forward and you need some serious work to cut through the revals, debt etc to get an opinion.

Sums up why Im not invested... I get the concept of the residents paying OCA to build ever more units, which is great.... just cant figure out if its working or not.

[SailorRob]

Revaluations up to offset increases in operating losses and debts.

Sounding like what rentals are about?

Will the market buy the increased valuations when property values out in the real world are down, down and still under pressure?

I missed the part about the Capital raising Balance.

On ya Sport. Keep up the good work.

[Daytr]

The result is probably better than I expected.
Definitely mixed and sales, resales & revaluation saved the day.
Increase in NTA up 6.7%.

Operating losses increased by 20M which ain't good. Refer P49 top right
The double dipping strategy on DMF for Villas & Care suites should bear fruit over time as long as the Government review on the sector doesn't call it out as double dipping
I see the value of in development has dropped substantially as they have completed units, but it also suggests they are cutting spending on development of new units which could impact the next year's result. It's probably the right thing to do, otherwise debt would have increased substantially.
Pretty muted reaction from the stock market that's for sure.

Has anyone seen anything on margin on sales?

[ValueNZ]

Has anyone seen anything on margin on sales?
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[winner69]

BusinessDesk headline

Oceania Healthcare doubles profit, gets new CEO

[Sideshow Bob]

BusinessDesk headline

Oceania Healthcare doubles profit, gets new CEO

All about the headline.....!!

[SailorRob]

The result is probably better than I expected.
Definitely mixed and sales, resales & revaluation saved the day.
Increase in NTA up 6.7%.

Operating losses increased by 20M which ain't good. Refer P49 top right
The double dipping strategy on DMF for Villas & Care suites should bear fruit over time as long as the Government review on the sector doesn't call it out as double dipping
I see the value of in development has dropped substantially as they have completed units, but it also suggests they are cutting spending on development of new units which could impact the next year's result. It's probably the right thing to do, otherwise debt would have increased substantially.
Pretty muted reaction from the stock market that's for sure.

Has anyone seen anything on margin on sales?

Is there ever a situation where an operating loss isn't a bad thing?

[X-men]

Tough market...NZx is stuffed....no results that will please the fundies not traders

[Baa_Baa]

Does anyone have the link to the Webcast results presentation?

[SailorRob]

This is exactly what ValueNZ and I look for. Improving business with static or declining share price.

So many punters will be frustrated with the market action today and finally capitulate.

[Daytr]

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Thanks, that's actually pretty impressive considering the current market.
Also goes against their guidance of a much larger cut in sales margins.

[Lego_Man]

Forsyth Barr first impressions:

Overall, a solid result from Oceania Healthcare (OCA), no drama with some minor positives and negatives on annuity earnings, coming out in-line with our estimates. On the more “big picture” issues, which we believe are the key reasons why OCA is valued at 0.4x tangible book value, we were encouraged by slightly lower debt than we had anticipated (increased by ~+NZ$25m in 2H24) driven by ~NZ$20m lower capex. OCA also disclosed an Interest Coverage Ratio (ICR) of 3.4x, substantially above covenants of 2.0x and flexibility to move more debt into the development facilities, further increasing the ICR should it be needed. OCA also reiterated that all its debt facilities and bonds mature no earlier than FY28. We estimate that NTA increased to NZ$1.41, up from NZ$1.33 a year ago, and +4cps above our estimates. They key positive in the results was substantially higher new sales gains (~+NZ$10m) than we had anticipated. While we see this as positive, we will look for clarity on the NZ$14m of delayed settlements, something which has become a common feature for the aged care sector these days. Pleasingly, it looks as if net buy backs was a positive (i.e. sold more than bought back). On the call, we believe comments on capex for FY25 will be one of the key issues, we estimate capex to come down meaningfully despite increased deliveries next year, as OCA builds on fewer new villages with a focus on finishing of the villages for delivery in FY25. OCA did not declare a dividend, something we consider a logical decision in the current climate.

[Daytr]

This is exactly what ValueNZ and I look for. Improving business with static or declining share price.

So many punters will be frustrated with the market action today and finally capitulate.

So you plan on increasing the percentage of OCA in your portfolio again.

[ValueNZ]

This is exactly what ValueNZ and I look for. Improving business with static or declining share price.

So many punters will be frustrated with the market action today and finally capitulate.
Speaking of punters capitulating, notice how the number of individuals with less than 100,000 shares has declined, whilst those with above 100,000 shares have increased.
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My interpretation of this is that small uninformed shareholders, who don't understand the ORA model, are selling to larger more informed shareholders.

[ValueNZ]

Does anyone have the link to the Webcast results presentation?
The investor presentation is at the bottom of this link. https://www.nzx.com/announcements/431667

[Toddy]

Are For Barr increasing their holdings or have they been one of the net sellers?

[Lego_Man]

Are For Barr increasing their holdings or have they been one of the net sellers?

They have been net buyers as i understand it. OCA i believe is their top sector pick.

[Balance]

From Shareguy:

Craig's say

Ridgewell notes net bank debt is now $633m and worse than management guidance for debt to be flat or down at the interim result. -

As such, we think OCA will either need to i) scale down its development aspirations and focus on paying down debt or ii) raise equity

[Daytr]

From Shareguy:

Craig's say

Ridgewell notes net bank debt is now $633m and worse than management guidance for debt to be flat or down at the interim result. -

As such, we think OCA will either need to i) scale down its development aspirations and focus on paying down debt or ii) raise equity

Well, it would certainly help if they weren't operating at a day to day of loss of $42M, + net interest costs have increased by $3M.
That's a lot of sales/resales to just break even.

But apparently some on here don't think they are losing money day to day...
They did in FYE23 & have basically doubled that operating loss in the last financial year

[Bjauck]

From Shareguy:

Craig's say

Ridgewell notes net bank debt is now $633m and worse than management guidance for debt to be flat or down at the interim result. -

As such, we think OCA will either need to i) scale down its development aspirations and focus on paying down debt or ii) raise equity I thought that management had already signalled that development was being scaled back.

It is good to see that employee retention has improved to 67% up from 56% last year. Maybe fewer employees are skipping over to Oz.

[Balance]

Well, it would certainly help if they weren't operating at a day to day of loss of $42M, + net interest costs have increased by $3M.
That's a lot of sales/resales to just break even.

But apparently some on here don't think they are losing money day to day...
They did in FYE23 & have basically doubled that operating loss in the last financial year

Notice that DMF only increased by $2m on revenues of $265m? If someone can work out why, that would be appreciated.

[Lease]

Notice that DMF only increased by $2m on revenues of $265m? If someone can work out why, that would be appreciated.

Revenue is mainly daily care fees(70%), DMF from independent living and care suites is about 20% of revenue. Refer annual report P58 has a breakdown.

[thegreatestben]

Speaking of punters capitulating, notice how the number of individuals with less than 100,000 shares has declined, whilst those with above 100,000 shares have increased.
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My interpretation of this is that small uninformed shareholders, who don't understand the ORA model, are selling to larger more informed shareholders.

Would sharesies in the above example be a single shareholder? ie 1 of the 468? if so there could be a lot of people (like me) who aren't represented at an individual level in those figures.

[Ferg]

Can I suggest if people want to refer to any numbers and have a discussion thereon, that they either cite where they got the number from, or show their calculation in how they derived it? I'd be happy to explain things where needed but I'm not going to unpick seemingly random numbers.

Balance - refer page 58 of the annual report. The topline number had me worried initially but per the breakdown of the DMF income there is $2.3m earned last year from leased sites that have since been sold. So a straight comparison of raw numbers is not a like for like comparison while OCA are divesting sites.

[SailorRob]

So you plan on increasing the percentage of OCA in your portfolio again.

Of course. Any serious investor is.

Risk is off table now, market didn't know anything I didn't.

[ronaldson]

Would sharesies in the above example be a single shareholder? ie 1 of the 468? if so there could be a lot of people (like me) who aren't represented at an individual level in those figures.

When you look at the number of holders with 1 - 1000 shares it seems inevitable that sharesies holders are aggregated as one holding, otherwise the 1 - 1000 figure would surely be much larger. As I understand it Sharesies members do not hold individually ( and do not get voting rights accordingly ) but via the custodian.

[ValueNZ]

Of course. Any serious investor is.

Risk is off table now, market didn't know anything I didn't.
I'd be interested in hearing what percentage you plan on increasing it to at this price.

[Rawz]

When you look at the number of holders with 1 - 1000 shares it seems inevitable that sharesies holders are aggregated as one holding, otherwise the 1 - 1000 figure would surely be much larger. As I understand it Sharesies members do not hold individually ( and do not get voting rights accordingly ) but via the custodian.

You do get to vote on sharesies now. They brought it in a few months ago I think. Ive always wondered how they split it being one owner? Maybe its a majority rules approach. Like if 70% vote yay for something then the full 100% sharesies custodian vote goes yay..?

[thegreatestben]

I definitely get voting rights with sharesies but I was doubtful I’m 1 of only 468

[winner69]

Cash burn was $78m …if include dividend it was $85m

Mav ….this more than what you estimated in that cool chart you showed us a few months ago?

[Bjauck]

Cash burn was $78m …if include dividend it was $85m

Mav ….this more than what you estimated in that cool chart you showed us a few months ago?
At least there has been no dividend paid since June 2023 and no dividend declared with these results. However that may be a reason why the share price is still in the doldrums. Some holders, who may have originally bought the share partly for its dividend yield, may now be capitulating, disappointed that dividends have not resumed.

[bull....]

Well, it would certainly help if they weren't operating at a day to day of loss of $42M, + net interest costs have increased by $3M.
That's a lot of sales/resales to just break even.

But apparently some on here don't think they are losing money day to day...
They did in FYE23 & have basically doubled that operating loss in the last financial year

included a one off insurance paymt of nearly 9mil in result as well
expense growth far exceeding rev growth

[ronaldson]

Some takeaways for me:-

Employee retention rate (including clinical employees) was up 10%. May be just a sign of the times, but the Net promoter score was better as well and there is a share plan participation offered.

The total of care beds reduced to 1396 from 1651 at FY23. A further 91 will have gone since via the Takanini sale, 31 more (along with 21 Care Suites) via the Middlepark sale and more from the unidentified site presently under contract. Notwithstanding, it was interesting that MoH aged care subsidies paid was up $3.2m over FY23.

The insurance settlement re Gabriel and the Auckland Floods reached on 16 May removed uncertainty and allowed the 31 March figures in the Consolidated statement of Comprehensive Income and the Balance Sheet to reflect the actual sums agreed as receivables.In that regard insurance income recorded under Other Income was only $2.69m, compared with 12.02m in the prior year.

Interest on Senior Debt Facilities increased to $27.87m from the prior year $13.68m, a real drag on profitability. Bank Loan interest rates applicable were in the range 6.40% to 7.15% by comparison with the prior year 3.23% to 6.53%. Given the change in rates arose incrementally thru the year the interest charge for FY25 will certainly be even more even if drawn debt was unchanged. Bank Loans drawn as at 31 March were $418m.

Actual development and construction commitments disclosed as at 31 March 2024 were $45.3m. This is significantly lower than the prior year figure of $124.8m suggesting a slow down in the pace of ongoing activity or an unusually high level of practical completions in FY24.

Shareholders were thrown a small bone with the indication that an interim dividend for FY25 might be declared in October. This will not do much to move the dial so we seem to be in a holding pattern just now and perhaps for some time to come. Sub 60c will continue in my view.

I don't have real doubt that in the longer run the switch out of care beds and into more premium accommodation and care suites is the best strategy for OCA but it takes time and incurs costs.

[bull....]

From Shareguy:

Craig's say

Ridgewell notes net bank debt is now $633m and worse than management guidance for debt to be flat or down at the interim result. -

As such, we think OCA will either need to i) scale down its development aspirations and focus on paying down debt or ii) raise equity

OCA could run in too real trouble if property market slows more

[winner69]

Hey Ron …good list of achievements

But you didn’t include the 79% of construction waste was diverted from land fill …some 842t of it

[Lego_Man]

OCA could run in too real trouble if property market slows more


Which is exactly what is unfolding. Not out of the woods yet.

Hopefully i'll have some dry powder to average down further in that scenario.

[kiwikeith]

From Shareguy:

Craig's say

Ridgewell notes net bank debt is now $633m and worse than management guidance for debt to be flat or down at the interim result. -

As such, we think OCA will either need to i) scale down its development aspirations and focus on paying down debt or ii) raise equity


I must admit I was surprised by the bullet point about debt in the press release. "Undrawn debt headroom is is $88m". Normally companies are upfront with their net debt position and whether it has gone up or down - not a comment on net debt headroom.

[mistaTea]

You've all been waiting for it...so...

### Critical Review of the Oceania Annual Report 2024


#### Executive Summary
The Oceania Annual Report 2024 presents a comprehensive overview of the company's performance, strategic initiatives, and future outlook. The report emphasizes Oceania's commitment to innovation, sustainability, and providing a premium resident-focused experience in the retirement and aged care sector. Key sections include financial performance, integrated reporting, sustainability framework, resident experience, and growth strategy.


#### Strengths


1. **Financial Performance**:
- The company has shown robust financial growth with significant increases in total comprehensive income and net profit after tax.
- Consistent improvement in sales volumes and cash flow indicates strong market demand and efficient operations.


2. **Innovation and Resident Experience**:
- Oceania has introduced several innovative initiatives like the Nurse Practitioner Model and the Together App to enhance resident care and engagement.
- The Helier, a flagship premium care facility, showcases Oceania's ability to provide luxurious and high-quality care services, setting a new standard in the industry.


3. **Sustainability**:
- The company’s commitment to sustainability is evident through its initiatives like the Sustainability Linked Loan, Greenstar Communities project, and waste management practices.
- Oceania's alignment with the Integrated Reporting Framework and Global Reporting Initiative (GRI) reflects its dedication to transparency and long-term value creation.


4. **Strategic Growth**:
- The report outlines a clear and strategic approach to growth, focusing on both greenfield and brownfield developments.
- The divestment of non-core assets and reinvestment in high-potential projects demonstrate prudent capital management.


5. **Governance and Risk Management**:
- The report highlights a proactive approach to governance and risk management, including addressing emerging risks like climate change and cyber threats.
- Regular engagement with residents and incorporation of their feedback into continuous improvement processes show a resident-centered approach.


#### Weaknesses


1. **Dividend Policy**:
- The decision to not pay a final dividend might disappoint some investors who expect regular returns. While this is justified by the need for reinvestment, it could affect investor sentiment.


2. **Regulatory Environment**:
- The report acknowledges the ongoing review of the Retirement Villages Act and potential regulatory changes. However, it lacks detailed contingency plans or strategies to address potential regulatory impacts.


3. **Operational Challenges**:
- The report mentions the pressures on residents, teams, and the portfolio but does not provide in-depth analysis or solutions to these challenges.
- The GP shortage and its potential impact on resident care is recognized, but the mitigation strategies (e.g., Nurse Practitioner Model) might not fully address the scale of the problem.


#### Opportunities


1. **Expansion of Private Care**:
- The successful launch of The Helier indicates a market for premium private care. Expanding this model to other locations could capture a high-value segment of the market.


2. **Sustainability Leadership**:
- Oceania's sustainability initiatives position it as a leader in environmentally responsible aged care. Further development in this area could enhance brand reputation and attract environmentally conscious consumers and investors.


3. **Technology Integration**:
- Continued innovation in technology, such as the Together App and Alexa integration, could significantly enhance resident satisfaction and operational efficiency.


4. **Community Engagement**:
- Strengthening community engagement and partnerships could create additional value for residents and enhance Oceania’s reputation as a community-focused organization.


#### Threats


1. **Market Competition**:
- The aged care and retirement living sector is highly competitive. Maintaining a competitive edge through continuous innovation and high-quality service delivery is crucial.

2. **Economic Downturn**:
- Economic challenges or downturns could impact the financial stability of residents and their ability to afford premium services, affecting Oceania's revenue.


3. **Regulatory Changes**:
- Potential changes in the Retirement Villages Act could impose new requirements and increase operational costs. Proactive engagement with regulators and adaptation strategies are essential.


4. **Workforce Challenges**:
- Ongoing workforce shortages, particularly in nursing and general practitioners, could impact the quality of care and operational efficiency.


#### Conclusion


The Oceania Annual Report 2024 demonstrates a company committed to growth, innovation, and sustainability. While there are areas for improvement, particularly in addressing regulatory and operational challenges, Oceania's strategic initiatives and financial performance indicate a positive trajectory. The company's focus on premium resident experiences, technological innovation, and sustainable practices positions it well for future success.


---


**Recommendations**:
1. Enhance transparency around regulatory contingency plans.
2. Develop more detailed strategies to mitigate operational challenges.
3. Explore further opportunities for expanding premium care services.
4. Continue to invest in technology and sustainability to maintain competitive advantage.

[MauroNZ]

Too late now...SP will be around $1.30...when market open

Open

$0.58



Intraday Range

$0.57 - $0.59




What year?

[X-men]

According to sailor moon....year 2400

[winner69]

OCA near top of NZX leader board today

That's pretty good going to 6

[Bjauck]

OCA near top of NZX leader board today

That's pretty good going to 6 Champagne time! It is only down by -1.5% in the last 30 days, compared to -0.5% for the NZX50. For Oceania’s SP, that is fantastic.

[bull....]

Champagne time! It is only down by -1.5% in the last 30 days, compared to -0.5% for the NZX50. For Oceania’s SP, that is fantastic.

down 24% YTD vrs index up 1% and down 44% last 5yrs . never mind at least the float still growing

[SailorRob]

Operator Your first question comes from Bianca Fledderus with UBS.


Bianca Fledderus

So first question from me is just around your new unit sale prices on Slide 12. Overall, that's looking good, but apartment new sale prices fell. And I know you mentioned that depends on geography and products. But I was a bit surprised by that -- given that's what The Helier will be included in, so would you be able to talk about what's driving that decline?




Brent Pattison


Yes. Good question, Bianca. I think for us, it was really just the mix. So if we think about The Helier, the influence in that FY '24 year has only been 13 IOU and 4 care products. So as a consequence, we haven't yet seen the material uptick that's going to occur in the apartment side. We've been selling through, obviously, some of our Awatere product in Hamilton, which has the least [ in value ] BayView, Eden, the last of Eden, Bellevue, et cetera.
So most of it is actually just mix rather than anything that we see untoward in our actual apartment levels. Looking ahead, we obviously see stabilizing pricing in the market. We haven't been a price takeout. We've been a price setter and we're expecting levels to be up around that, if not well in excess of that as we sell through some of those premium products.




Bianca Fledderus


Okay. And then just following up on The Helier. So you mentioned 25% of apartments are sold or under application and 20% of care suites. Could you share what percentage are actually sold?




Brent Pattison


So we have 13 that have been -- 13 IOU that have been recognized in April '24. And we have 4 care residents. We have 7 under application, where we've seen settlements in May -- April and May of IOU and 2 additional applications for care residence.




Bianca Fledderus


Okay. Okay. And then -- yes. Okay. So you mentioned the residential property market is still challenging and impacting sales at that village. And so with these more recent ones, I guess, did you have to lower prices at that village or offer any sort of increased incentives?




Brent Pattison


We haven't lowered prices, no. And I know that's a question that's been on people's minds. It's actually been more of just about confidence. People love the product. Lots of people are sitting there waiting for a stabilization in market. It's less about their expectations of what they're going to get from their homes, because a lot of the homes are obviously in the $5 million, $6 million, $7 million range that they are selling.
They just want confidence that if they market and go through that change, that there's going to be a willing buyer on the other end. So it's actually been less about market prices and more actually about an incoming buyer. Are they going to be able to finance it. Are they going to be able to afford that financing at higher interest rates.
As Adrian moves us to hopefully lower interest rates towards the end of this year or early next year, then I just think that it will help with sentiment. So people love the product. People are happy with the price. People are happy with the services, but they need to see some confidence. And as people know, there's an abundance of listing. So eventually, the market will clear that abundance of listings.




Bianca Fledderus


Yes. Okay. But -- so based on that, it sounds like first half of '25 may still be quite weak on sales for The Helier and then hopefully, we'll see an improvement in sort of second half of '25 for that village?




Brent Pattison


Yes. I think we're not necessarily seeing it the same as that, but I think we're just being cautious. And we know that it's something that people are focused. That's a flagship property for us, so we're been cautious. But what we have done is run various scenarios. And under each of those scenarios, we're confident that we will be cash positive with the sales that we'll make out to FY '25. So we would have recovered our investment effectively.




Bianca Fledderus


Yes. Okay. And then also there was a decent uplift in payments to suppliers and employees. And I remember you mentioned that The Helier would have high OpEx from day one. Could you talk about what drove the uplift? And how much of that is driven by the opening of The Helier?




Kathryn Waugh


Bianca, it's Kathryn here. I haven't got specific numbers for the call. But yes, as you mentioned, a few of our sites, because of the timing of openings, will be running at slight operating loss for the few months and The Helier, being one and also some of the other developments Brent had spoken to. That's natural in the cycle of it.
And because of the level of service that we provide and the experience that we want for residents, we've always had the motto that the operating model will be there 100% on day 1, even if there's only 1 resident and that will decrease over time. The other thing you will have seen is in our Village segment, there's an intentional additional investment in marketing spend, in particular.
We've been putting some more money to brand awareness. And you guys, if you got on early for the call, we'll have seen our recent TVC campaign, so -- and we're really proud of what that's done and the insights it's bringing to future residents and there's intentional spend from that.




Bianca Fledderus


Okay. And will that continue into FY '25? The marketing spend and all of that?




Brent Pattison


Yes. So what happens, the latest advertisement, Father and Son, as part of a series of properties that we had. So the first property was our residents telling their stories. The second property was around a couple playing piano in our care suites. The third property was around some residents moving into our apartments and taking their treasured dining room table. And the last has really been this notion around the care and the quality of care that we provide. So as a person's needs change, we are there. And I'm sure you love the theme song around sort of, "lean on me," and that's part of what we're trying to get to.
That is the last of a major spend. We've seen significant increase in familiarity, brand awareness, and we're excited with the properties that we've developed. So that marketing will taper. Where that marketing gets directed, Bianca, is into our inquiry levels, into our research and resident insights to drive -- it's more demand driven around improving our sales cadence and performance.




Bianca Fledderus


Okay. Great. And then last question for me. So you disposed of some assets in FY '24, so more in the first half of '25. Is that, essentially, the completion of your disposal program? Or are there any other assets you are considering selling.




Kathryn Waugh


No. There are some more left there, Bianca. In our financial statements. We have a disclosure as to the quantum of those. So yes, there are still a handful, but we'd hope to have those underway by the end of 30 September. So at the interim, you'll hear more from us on those.




Operator


Your next question comes from Arie Dekker with Jarden.




Arie Dekker


Just starting on the development pipeline. So you give a clear steer to nearing completion for most of it in '25. Outside of Meadowbank and Franklin, where you're sort of commencing works. Are you going to commence anything else into FY '25. And can you just talk about what we should be sort of expecting based on that for delivery into FY '26, because it's looking a bit done if you don't.




Heath Milne


Yes. Well, it's interesting, Arie, because as we build, our debt goes up, so we get hammered for that. But also, we're in a situation where we need to obviously sort of temper that pipeline. So if we think about into FY '26, we're moving into these broad acre developments, and they allow for staging, they allow for acceleration of capital if necessary.
Two obvious developments in [ Nam?ra ], which is in Franklin and Auckland, but also the acquisition that we did some time back, Bream Bay, which is in Ruak?k?, which allowed us to access a large side across the road as part of that transaction. Coupled with that, we'll be continuing, we said earlier, future site developments at BayView future development sites. We are at Lady Allum, et cetera.
So part of that is the job of the new CEO, I guess, but part of it is also the existing team, having a very strong view on the right product, right place, and where we are in the cycle. We've had a very, very intensive investment period around apartments and care suites. We're coming out of care suites. We're coming out of apartments. We're going into other product typologies. You can even see, with the deliveries that we have in forecasting for next year, [ roads are on them ]. We're starting to get to sort of almost the final stages of those buildings.
There's plenty for us to pivot towards, Arie, and it's really a matter of in that Golden Triangle where we can see good support for the end product. We're obviously going to go hard, but that will also be part of Andrew and the team and the new CEO thinking about where do we want to spend that next dollar in 2026.
And whilst we haven't, over this financial year, started maybe the same amount of development that we have in previous financial years, Andrew's team has remained very active in advancing design processes for our other care sites. Allum, where there's further -- there's further stage of development there, Lady Allum and Bream Bay as Brent mentioned as well.




Arie Dekker


I understand what you're looking to manage. So yes, the commitments that sit on the balance sheet at the end of financial year of $45 million, that pretty much is associated with those completions and finishing at Meadowbank in terms of further density. You're not looking to open anything up at this stage in FY '25?




Brent Pattison


Yes. No, and I think that's a good question. And hopefully, that's what we're providing assurance around. So you're exactly right, Arie. That's what it is. You can see in the graphics, scaffoldings are coming down, cranes are being removed, roofs are going on. In some instances, if we think about Elmwood, we're nearly ready to open the building. So a lot of the future debt, if you like, or development debt is already in-train or being spent or has been spent, I guess, to bring that new product to market.




Arie Dekker


That's helpful. And then final question just on this vein of questioning. So the reason you haven't looked to increase your facilities is pretty deliberate. You're essentially -- you're not worried about the risk of settlement timing in this market because actually, you're not looking to commit to a lot of new development. And so you'll sort of finish off what you committed to. It's not much and the settlement proceeds sort of come in. And for that reason, you haven't looked to increase your facility around that.




Brent Pattison


Yes. Sorry, you go ahead, Kathryn.




Kathryn Waugh


Yes. Brent can add to this. But, essentially, yes, Arie. I mean, we're sitting at $100 million of headroom today. That's plenty for what we need with the developments that we've got planned for the next 12 to 18 months. It's obviously something that we look at regularly. If the time comes in the future, then we will look at it. I talked about our key refinance date is out to '28, but obviously, we'll address it before we get to that point.




Brent Pattison


Yes. I think the other thing that we're mindful of, Arie, it's not a great time to be negotiating with banks' a favorable kind of financing facility at these sort of rates. So one of the hallmarks of Oceania has been to sort of peck windows, I guess, that bring our weighted average cost of capital down, bring diversity and tenure into our facilities, whether that's through bonds, whether that's through a refinancing event that Kathryn and I worked through, just trying to assist with that.
But there's plenty of headroom. And this is a deleveraging story for us. We've got some fantastic product that we have in market with a recovering housing market sentiment, albeit it keeps getting kicked down the road. But we do see a recovering housing market into '25, and we'll be focused on doing what we've done over the last 6 months, getting through that sort of unsold stock and delevering the balance sheet.




Arie Dekker


Great. And then just 2 quick final ones, hopefully. Just on the receivables, that balance of ORA receivables is climbing. The vast majority of it, you expect to realize within 12 months. Kathryn, could you just remind us what the approach is there in terms of what drives that growth and the short-term part of that ORA receivable to $74 million now? And then also what's driving the increase of the greater than 12 months from $10 million last year to $20 million this year.




Kathryn Waugh


Yes. Thanks, Arie. So yes, you're right. The short-term receivable is ticking up at $74 million at March. What I would say is, though, and we obviously analyze this every month, the portion of that, there's a high portion that's with under 3 months. And as we bring more and more care suites to market, we are naturally going to see that number increase, care suites and needs-based product.
It's one where we generally offer a 60-day deferral on entry because the person needs to be in that day or that week. And they're generally not having to sell the family home to pay that, but it's just a matter of getting the paperwork in order. So it's a low-risk thing for us on the care suites. Occasionally, we'll allow a portion of an IOU to defer a small amount for a short term as well. And so it generally, we'll build but not age, if that makes sense.
On the longer-term stuff, again, occasionally, sometimes we offer a 10% deferral or what you'll find is some of those have just only marginally ticked into the 12-month period. They're not delayed forever or not delayed till settlement, but they are more than 12 months. So we can't classify them a short term.




Arie Dekker


Sure. And then a final one for you, Brent, and, like, I appreciate it's not something you'd be there to execute on, but you guys have had some success in getting close to book or around booked for the divestments, albeit pretty small assets. Can you just sort of comment on whether the Board has considered divesting assets of larger size given the large value gap that's there and that being a potential means of sort of looking to close it?




Brent Pattison


Yes, I think that's a good question, Arie. I mean, it's frustrating when we think about the value gap, and part of that might have been sort of coming out of an index and not having a marginal buyer for the stock at that time. But I'm talking about the shares, obviously.
But from my perspective, we're in a situation where we look at the capital allocation of our sites. We looked at the portfolio transformation. So where do we want to be. Where do we know that there are good buying signals for residents. How do we create fantastic communities for people. And how do we make sure that these have embedded value that goes on, so how do we get that annuity.
So Kathryn, myself and the team went through, and we looked at sort of what's the trade-off between operating earnings. What's the trade-off around maintenance capital. What's the trade-off around competitive environment. What are our capital allocation rules and hurdle rates that we've got ahead. That's how we came up with our initial kind of divestment portfolio.
But we also know that we've got some crown jewels. So what do we think about those. Are we the best and highest owner of those and a deleveraging of the balance sheet. At this stage, we've taken a pretty prudent approach. We have tried to demonstrate to the market that we have kept our operating earnings kind of roughly in line and being able to recycle cash. And that's been our primary focus, first and foremost.
It will be for somebody else to consider. But I think we're pretty happy where the portfolio's at. I touched on it earlier, Arie. [ It's ] one of our total sites that represent about 85% of the $3 billion. So we think we've got the sort of portfolio that we want to keep. And we think that we're going to start to see some pretty attractive annuity DMA coming off there. Our occupancy is lifting, resident satisfaction's lifting. So that's a challenging one.
We're also talking about a market where the types of sites that we have divested, there's -- and we've spoken to before, a theme in the service offering of those sites, largely care-focused. And there's a reason why, for the market that's out there, that's desirable. When you start going into the other end of our portfolio, it doesn't have the same features that, obviously, that market would look for. So it would be a completely different proposition.




Operator


Your next question comes from Aaron Ibbotson with Forsyth Barr.




Aaron Ibbotson


Brent, good luck with your future plans and thanks for good, robust discussions. I got a couple of questions. I guess my first question is on what I would call core debt, I'm not sure what you would call it, but basically, the difference between what you highlight as development assets and net debt.
So a year ago, you had $600 million of development assets and $550 million, call it, of net debt. Now you still got $612 million over development assets, but $630 million of net debt, call it. So there's a quite material increase and particularly, in the second half, there was a big jump.
So I'm just trying to understand your view of this and how you expect this core debt to develop as you potentially, depending on what the market does, sell down some of your inventory. Is this quarter that's going to continue to sort of creep up, this difference between these 2 numbers?




Kathryn Waugh


Yes. Thanks, Aaron. It's Kathryn here. It's a good question. I mean, a couple of years ago, 3, 4 years ago, core debt, we'd really only use it as a kind of month-on-month working capital to have a buffer and occasionally, from time to time, we'd use it for dividends. If you remember when we did the project to purchase Remuera Rise and Bream Bay, we used our core debt facility at that time, which is why it's ended up at a higher, more stable level.
And we have also been using it recently to buy small parcels of land. So you will have seen our disclosures and we've been buying a few of the pieces of land at the back of The Helier. So I guess that explains why it's where it is at the moment. To your question about how do you see it...




Aaron Ibbotson


I'm sorry. Kathryn?




Kathryn Waugh


Yes?




Aaron Ibbotson


Buying land should not increase it, because presumably, you pay and then you put that land in unsold, undeveloped plan, no? So I'm looking at Slide 14 here, and I'm comparing the $612 million with your net debt number. So if you buy land for $20 million, that $612 million goes up by $20 million and your net debt goes up by $20 million. So that gap does not open up because of land acquisitions.




Kathryn Waugh


No, I understand, I understand. I was just touching on the drawn amount to start with. So -- but kind of -- sorry, rounding out what I was saying. So the drawn amount, kind of that's where we've got to the level it is. If I answer your question first about how we see it going forward and what's going to happen with that core debt, we touched on, a few times, myself and Brent, about how, as we sell down developments, that cash obviously goes against the development facility in the first instance.
Going forward, once we're at a cash-neutral position, which we're expecting we will be by the end of this next financial year with The Helier, we can use those funds to be kind of allocated against our corporate facility. So that will see us bringing that number right down and having more of a headroom in our working capital. And you'll note this morning, you also touched on how we can move between the 2 facilities, so between our corporate and our development. And so that's kind of the roadmap for where it's going. And yes, I don't know if Brent wants to add anything about the…




Aaron Ibbotson


Sorry Kathryn, I'm not asking -- sorry, Kathryn, I don't really mind which facility you put it in and how much you draw. I'm looking at the total overall amount, yes? So you reported net debt of roughly $630 million and development assets of $612 million. That's a negative $20 million.
At the half year, you reported $634 million of development assets and roughly $607 million of net debt. That was a $25 million positive. So your -- the way I would think about core debt has gone up by $45 million over the last 6 months. We don't have to call it core debt. We can just call it the difference between these 2 numbers.
It's gone up by $45 million in the second half, so effectively, what I'm saying is your development assets seem to have gone down a lot more than I would have expected given what your sales proceeds are and how much CapEx you're spending. So I'm just trying to understand maybe these are the ORA receivables or something. But I'm just trying to understand why the difference between these 2 numbers have gone up by $45 million in the second half since the first half.




Kathryn Waugh


Yes. Okay, I understand.




Brent Pattison


So some it, Aaron, might be buybacks. So that's probably a consideration.




Aaron Ibbotson


That was positive in the second half according to disclosures.




Brent Pattison


Yes. So I'm just trying to think about what is driving that difference that you've just given us. So let us answer it, call you off-line so that we've got time to just work through that. We don't have the materials in front of us. But if I think about what's happening with the development assets, some of it's going to be valuation. Some of that's going to be buybacks and how we've used the facilities, effectively, in our switching.




Aaron Ibbotson


So your unsold new stock, has it been valued down in the half?




Brent Pattison


Not on mass scale, but yes, the other point that I'd add to these numbers is these come from CBRE valuation. So they are subject to movements in things like in-going prices, even other little changes, like parts of sites being changed, I guess, the treatment of how they're valued. We've had parts of sites that have been moved from being treated as development land, actually, back to going concern, so it comes out of some of the buckets in here, if you can really dig down to that level of detail.
The other one on which you point -- which you referenced as well, Aaron, is we refer to, on this analysis, for -- I guess, for conservatism, we refer to unsold stock per our CBRE evaluations, which doesn't account for deferred settlements or, yes, for sites that are -- there's a bunch of The Helier sales, which are not included in our unsold new stock, which settled after balance [ debt ], for example. So that receivable is the other side of it.



Aaron Ibbotson


Yes. It's just a bit unnerving when these numbers move unexpectedly by such large amounts. But anyway, second question for me. Just -- you touched on CapEx and $100 million being comfortably enough to finish off, I'm not sure if that's a net or a gross number, but I think it would be really helpful for me and maybe for others, if you could go through what CapEx you've got remaining on sort of the 3 or 4 projects you're finishing this year, so Elmwood, Waterford and Awatere.
How much -- I mean, if I look at the pictures, it looks like it's not that much left, but I remember thinking that for The Helier and there was quite a lot left. So I'm just curious to understand, is this, what, $20 million a village or less? What are we looking here, approximately, to finish these 4 listed projects this year? I appreciate there's other CapEx as well.




Kathryn Waugh


Yes, yes. No, you're right. So I think the easiest way of probably looking at it as if I look back to the question that Arie asked, which was around the -- in our stat account where we talk about what are we committed to. So we committed to another $45 million in the next 12 months.
That covers those kind of the top half of the slide that Brent had of the pictures that are underway. That doesn't include the cost of Franklin. We are out for tender on that at the moment. So it includes what we need to finish, the earthworks, but not the development as such.
So I view it as a $45 million for Elmwood, Waterford and Awatere and Meadowbank. And then Franklin, as we said, we're the controllers of that destiny of when we start. When we do start, Stage 1 will be a handful of villas. We're also going to start the development of the community center and the care facility at that time.




Aaron Ibbotson


That's super helpful, Kathryn. But just to spell it out, though, I guess Arie and I are asking the same questions in different ways. But looking at this then and looking at your sort of wait-and-see approach to a few of the new developments, which personally makes sense to me. It looks like CapEx can fall pretty dramatically this year, and then again, next. Is that fair, assuming no other dramatic developments?




Brent Pattison


Well, we can't -- we don't have a crystal ball, Aaron, on where the market goes. But I think in essence, yes. I mean that's all part of this transformation of the portfolio. We grew the portfolio from $900 million to $3 billion. And now we're going through a tapering. We had COVID and other activities that kind of meant that we were truncated with all of our developments coming on stream at the same time. Helpfully or unhelpfully, all of those developments, as you are aware, were large-scale capital intensive apartments and/or care buildings.
So I think what Kathryn and the team are referring to is there's some flexibility, I guess, in terms of how and when and in what proportions we allocate our capital going forward. We're not going to be stuck in the ground for 3 or 4 years with delivery of 190 apartments or 160 care suites or things of that nature. So that's a long answer to a short -- to your question. But yes, capital can moderate from here.




Heath Milne


And the nuance is that this time, 18 months, 24 months ago, we had twice as much under construction as we do at the moment, committed. And this time last year, I had I think 409 units. So whether we made new decisions or not, we were committed to those projects. Whereas now, we don't -- we're not giving guidance as to what those CapEx numbers are going to be. We have more control over whether we accelerate or delay further development.




Operator
The next question comes from Stephen Ridgewell with Craigs IP.




Stephen Ridgewell


Just first, first of all, good to see the pivot and I see your development strategy to more broad acre and general tapering of development activity in the next couple of years. Just first one for Kathryn, just for the divestments that you've announced and looking to settle, what is the expected EBITDA impact from those divestments, please?




Kathryn Waugh


For the future ones, yes, good question. I might have to come back to you on that one. The ones that were sold today, it's only about $100,000 impact. Going forward, it will be between $1 million and $1.5 million. So for FY '25, it should be between $1 million and $1.5 million.




Stephen Ridgewell


Okay. That's helpful. And then I guess just on the improvement in aged care EBITDA we saw in the second half. I mean, it was good to see following the DHB funding increase. I guess just interested, do you see that run rate in the second half is kind of a good base level as we enter currently FY '25 year? That $12 million per half, is that a sustainable run rate? Were there other kind of cost pressures that we should be mindful of that perhaps sort of dials back a little bit from where it's been. And then can you -- also just interested in occupancy rate towards the end of the period.




Brent Pattison


I think those are good question, Stephen. We're actually really pleased with the direction of travel in the care business. It's been hard yards. We overinvested during COVID, as you know. We're starting to unwind that. I made a comment a couple of years ago that we've become full-time recruiters rather than running a business as we think about the unavailability of sort of clinical staff in particular.

So what we're seeing is a very pleasing improvement in our wage-to-revenue ratios we're seeing a really positive improvement in our occupancy, and some of our sites are setting up around 100%. And as we're selling through our care suites and some of our new developments, we're seeing EBITDA margins improving. We're seeing bed -- if we want to use non-GAAP measures, our EBITDA per bed materially improving. And that's before we get the windfall of some of this new innovation around private pain care and other forms of premiumization that's occurring in the portfolio.
If the government are of a mood to improve our funding, the net material improvement in our performance. And because we have the right sort of platform in place now, then hopefully, what happens is that it's true margin improvement for us rather than pass through.
So I think from where we're sitting, we are actually seeing, for the first time in a long time, a real improvement, cost coming down, stabilization of workforce, medical cost inputs are coming down, occupancies going up in premiumization, i.e., the share of the wallet from our residents is improving our overall kind of financial outcomes.




Stephen Ridgewell


Got it. That's helpful. And then maybe if I just go back to the -- I'd ask another question on -- I guess, if we go back to the interim results, I've probably asked this question at the time about sort of direction of travel. And I think the comments that we noted at the time was an expectation for management debt, that it would be kind of steady or perhaps down a bit, depending on, obviously, sort of activity at The Helier and a few other things.
We've seen net debt sort of pick up about $26 million half-on-half. I'm just interested compared to the internal projections that you had 6 months ago. What was kind of the key line item that was a little bit worse than expected? Was it mainly slower settlement at The Helier and some other sites? Like, just a little bit more color would be helpful, please.




Kathryn Waugh


Yes. Thanks, Stephen. I think probably the key thing is a few of those divestments we thought might have settled in March. So you will have seen we've had another $16 million of sales proceeds in April and May. We've got another site that's under contract at the moment. Had they fallen into 31 March, then we would be a lot steadier.
As you say, there's a $26 million left, $16 million of that is funds that we've received post the balance date. There's also a little bit of reinsurance funds that we would have hoped to have had by now, but that's kind of trickling through in May and June as well.




Brent Pattison


Yes. But also, I think if we address the -- we probably expect it to be a little bit further along in the sell down of The Helier. We did -- the team have done an outstanding job, Stephen, as it relates to sales, $476 million. That's the best performance we've actually had. All of the markers, from my perspective, were up. But those were very, very material kind of outcomes for us.
So as Kathryn said, $10 million in divestments and $16 million in other elements and then maybe 2, 3, 4 more sales at The Helier, we'd be back down to sort of our debt starting with a 5 rather than starting with a 6. And so that's probably giving us some of the confidence that you're hearing on the call around this kind of deleveraging and what's actually happening in the business.




Stephen Ridgewell


That's helpful. And just one last question from me again, sort of -- but maybe putting the front book to one side, and maybe just looking at the cash generation from the existing assets, which is something we do track pretty closely, and you have good disclosure as a company that we can actually work it out.
We can actually work it out for a lot of [ operators ], so we thank you for that. But I guess if you sort of look at the kind of operating cash flows and your backed out deal interest to allocate it to development, back out the new sales receipts and then subtract the maintenance CapEx that the company, on numbers, kind of burst out $27 million in FY '24.
And I guess I'm just interested, how much of that is start-up losses on new villages? Obviously, there's been a lot of new product that you've come out with in the last few years. And then, I guess, the pathway to really get into a positive cash generation or positive cash generation from existing or back book of assets. I think it would just be quite helpful how management kind of thinks about, perhaps, the time frame to achieve it as you start to kind of wind down the front yard, the development book in the next few years.




Kathryn Waugh


Yes. Thanks, Stephen. I'll start, and then I'll let Brent fill some of the gaps. So you're right about the operating losses. Where we've experienced that the most is on our care developments. And so as you know, we move over as many residents as we can to make them as efficient as they can from day 1.
But inevitably, until you've got a full building, there will be a little bit of a drag. And Elmwood comes online at the end of this year, so we'll have that impact in '25, but that is really the last of our brownfield care development. So we do expect that kind of drag that we've experienced over the last couple of years will disappear in the future. And I might let Brent talk to…




Brent Pattison


I think you've covered it wonderfully, Kathryn. I think all that's happened, Stephen, is that we've had this pivot out of care, so we're doing the last of that large-scale premium care and those assets are really -- you've got to operationalize them from day dot. And as a consequence, they come with a pretty heavy operating impact.
We're stopping that. We're moving away from that. We feel like we've got a pretty full portfolio now of where we want to be around care. And it goes to my sentiment around wage-to-revenues coming down. Occupancy is going up, but also the disruption that we've had in our numbers in past years.
We've decanted residents, undertaken an intensive developments around care. We're kind of at the end of that. So Elmwood is the last sort of major key suite delivery. And therefore, people will start to get confidence around 18,000, including DMF. We would be moving well into the 20s and possibly into the 30s over time. So that's probably what the strategic intent is. We've just got to deliver it to it.




Operator


Your next question comes from Nick Mar with Macquarie.




Nick Mar


Just on the new sales stock. I was just wondering if you can provide any color. You kind of mentioned, "I will start reporting it when we get to an appropriate level." Any color on where you think that should be for the business?




Kathryn Waugh


I think a nice rule of thumb will be when we're at a point where there's nothing over 12 months, really. And so it's kind of the general churn of what we're bringing to market each year. It's coming through. Yes, I don't have a magic number, Nick. I'll probably stop disclosing it when people stop asking about it.




Brent Pattison


I think the other thing that I'd say, Nick, is that we brought a lot to market. And what's helpful is that of the $350-odd million, there's $50 million that you can't sell anyway because you've got a resident that's already in occupation from previously being decanted. So you're down to $300 million.
Of that $300 million, $200 million of it is the last 12 months. And I think the desire is to get through it as quickly as we can. The $88 million that's left over, we're already -- we're starting to see really good kind of applications on that part of the portfolio. So the team are desiring to have, as Kathryn said, sort of stock sitting not least than 12 months old from a seasonality point of view. But we're starting to make the sort of traction that the market would expect us to be making on the inventories that we built up.




Nick Mar


No, that's great. And then I know there will be some sort of difference in views as the new CEO comes in, but sort of medium-term development out for this business, and I think $250 million to $300 million, as you've talked about before, where do you guys stand today?




Brent Pattison


I think we probably stand to the -- sort of to the lower of that booking. I don't think we're going to be rewarded for bringing 300 units to market tomorrow until we can demonstrate that we've got through the stock that we've got. So the desire by the business is always to be in sort of the lower bands of 30% to 35% from a gearing perspective.
That can change a lot by just having in -- your asset values being considered in a different way. But I think the reality is, Nick, that the market is probably tapering. The market is moving to product that you can see greater and faster recycling of cash. And it's at least, probably for us, in terms of the development of our pipeline, around 250, 300 units per year.
It's actually right product, right place and an ability to demonstrate presales and adoption of the product that we're delivering. I think as a consequence of that, we're probably something starting with a 2 rather than ambitiously starting with a 3.




Nick Mar


And on the back of that, where do you see that sort of $250 million of undeveloped land and WIP sitting? Where do you think that needs to sit as you transition to that sort of follow-up [ cadence ] of development?




Brent Pattison


So you mean in terms of land holding costs, meaning turns or how quickly we turn that soil? I wasn't -- I'm not entirely sure, Nick, what the line of questioning there.




Nick Mar


Sorry, the sort of $112 million of undeveloped land and $147 million of WIP at the moment. In aggregate, does that need to go up or down or sideways to deliver what you're talking about in terms of the medium-term target [ you're building ]?




Brent Pattison


Right. Yes, okay. I think for us, we've got enough in the consented pipeline, and we're in locations that we know we've got to have the right sort of residents at the end of it. But we've always been curious around -- and intentional around building optionality into the pipeline.
When we're in more favorable market conditions, we did some acquisitions. Andrew looks at property opportunities every day. There's availability of land banks. So I think as market conditions improve, it then allows us to just be a bit more expansionary as we think about key locations that we might not be in that we want to be in. But within the existing portfolio, then we've got plenty of time just to develop out what we have.


Operator
Next question comes from Shane Solly with Harbour Asset Management.


Shane Solly
I've got 2 quick questions. The first one, just picking up on the -- getting cash neutral at The Helier in FY '25, what was the sort of key stepping stones to get to cash neutral in FY '25?


Brent Pattison
Not too many more sales, to be honest, Shane. I think the reality is that this project is going to demonstrate some pretty compelling free cash flow above the original investment. It's also going to develop -- it's going to give a pretty outstanding development margin. We don't put a lot of weight on development margins, obviously. We focus on cash.
But I think from our perspective, if we think about the cadence that we're seeing if we think about the inquiry, elevated inquiry levels that we've got, we've got a lot of confidence that a bunch of sales ahead of us and get us there pretty quickly and leave plenty of cash for that sort of upside that the market has been expecting.


Shane Solly
Great. And just a second question then. In terms of your confidence to lift your build rate, and I appreciate what you've just kind of gotten to Nick, but, just, what would actually see you want to lift that build rate? What are the sort of preconditions that you need to see?


Brent Pattison
Well, I think it's about the confidence of the residents. So if it's a care product, we've got to basically see that there's still a willingness for share of wallet, i.e., government/resident paying combinations. If it's apartments and villas, then that's kind of right product, right place.
So we've got some fantastic sites that we would accelerate with just some better market conditions. An obvious one is Lady Allum. We've built a beautiful care building there. It's already fully occupied and great reputation and there are sites available for some apartment developments.
And those apartments would have outstanding views and be highly attractive to buyers and they're present, particularly as other participants, other competitors have pulled the -- hold the product in close proximity to ours. So the market is opening up for us to develop. We need confidence that residents are going to be able to sell through the houses or be able to sell through the share portfolios or other forms of assets to move into occupation with us.


Operator
Your next question is a follow-up question from Aaron Ibbotson.


Aaron Ibbotson
Apologies, but I just need to follow up on your sort of unsold new stock and the valuation of it, because it's -- if I look relative to the half year, you've delivered -- what did you deliver in the second half? 120 or something. And then you sold for $60 million or something like that. So you delivered 120 units and then you sold for $60 million. So I'm just trying to understand how this number went down by $69 million or whatever you said during the call.


Brent Pattison
Yes, I think…


Aaron Ibbotson
That's quite a big number.


Brent Pattison
Yes. So I think probably, given we are sort of 15 minutes over what we have allocated, Aaron. Certainly, Kathryn, I, Heath, we're here. We're happy to sort of answer that question, and we're happy to make it available for others, so can we take that off-line so that we can actually do the maths that you've just done to actually provide the right response?


Aaron Ibbotson
Absolutely. Thank you.


Operator
There are no further questions on the teleconference at this time. I'll now hand it back to Brent, Kathryn and Heath to answer any questions from the webcast.


Brent Pattison
There was just a question -- well, there are a couple of questions from the website, but I'm pretty confident that we've covered those and they're were actually just around visibility of sales, and, I think, we've been very transparent about that. There were some comments around these, and I think we've canvassed that to a degree. We'll certainly circle back on this last question that Aaron's raised.
I would say, in conclusion, this is my last time doing this for Oceania and it has been an absolute privilege for me to work with this team, and I love this job very much. And I think Oceania has delivered a fair result to the market. We've got plenty of cleaning ahead of us, and that's a great opportunity for the incoming CEO.
But I do want to thank everybody for their support of our business. We've certainly enjoyed the robustness of these discussions over the years. and we're really proud of what we've done. So thank you for people, making time available and engaging with us in the way that you do.


Kathryn Waugh
Thank you, everyone.

[SailorRob]

Well, it would certainly help if they weren't operating at a day to day of loss of $42M, + net interest costs have increased by $3M.
That's a lot of sales/resales to just break even.

But apparently some on here don't think they are losing money day to day...
They did in FYE23 & have basically doubled that operating loss in the last financial year

Operating cash flow and new cash from sales of occupational right agreements, what we call ORAs have been a strong performance at $85.4 million, up 22% and $226.3 million, up 27% on PCP.


Losing cents to gain dollars is a great game to play.

[Greekwatchdog]

Thanks for Posting Sailor.

[SailorRob]

Heath Milne


Yes. Well, it's interesting, Arie, because as we build, our debt goes up, so we get hammered for that. But also, we're in a situation where we need to obviously sort of temper that pipeline. So if we think about into FY '26, we're moving into these broad acre developments, and they allow for staging, they allow for acceleration of capital if necessary.


God damn it, run the bloody company in the best interests of your owners like your fiduciary duty states.

Do not run it on their damn opinions.

[SailorRob]

Thanks for Posting Sailor.


No problem, busy day so only starting to go through it now.

So far very very happy.

[SailorRob]

Make sure you carefully consider the below when analysing cashflows. Very important.


Arie Dekker


Great. And then just 2 quick final ones, hopefully. Just on the receivables, that balance of ORA receivables is climbing. The vast majority of it, you expect to realize within 12 months. Kathryn, could you just remind us what the approach is there in terms of what drives that growth and the short-term part of that ORA receivable to $74 million now? And then also what's driving the increase of the greater than 12 months from $10 million last year to $20 million this year.




Kathryn Waugh


Yes. Thanks, Arie. So yes, you're right. The short-term receivable is ticking up at $74 million at March. What I would say is, though, and we obviously analyze this every month, the portion of that, there's a high portion that's with under 3 months. And as we bring more and more care suites to market, we are naturally going to see that number increase, care suites and needs-based product.
It's one where we generally offer a 60-day deferral on entry because the person needs to be in that day or that week. And they're generally not having to sell the family home to pay that, but it's just a matter of getting the paperwork in order. So it's a low-risk thing for us on the care suites. Occasionally, we'll allow a portion of an IOU to defer a small amount for a short term as well. And so it generally, we'll build but not age, if that makes sense.
On the longer-term stuff, again, occasionally, sometimes we offer a 10% deferral or what you'll find is some of those have just only marginally ticked into the 12-month period. They're not delayed forever or not delayed till settlement, but they are more than 12 months. So we can't classify them a short term.

[SailorRob]

Incredible earnings call;

Arie Dekker
Can you just sort of comment on whether the Board has considered divesting assets of larger size given the large value gap that's there and that being a potential means of sort of looking to close it?

Brent

Are you fing mad?


Brents actual answer must be studied in great detail by each and every one of you.

[SailorRob]

I'd be interested in hearing what percentage you plan on increasing it to at this price.


It's not just a function of the price, but also my understanding of the Business.

To go over much over 10% I would need to do an immense amount of work, which I intend to do. If I am comfortable with what I think I already know, then the potential is there to go to 20% plus. Who knows, maybe even 40%. This is how you get seriously rich. You have to know when to swing for the fences.

I am very confident this business is worth far in excess of NTA. If I keep just NTA value as a massive margin of safety to my actual estimated value and I am sure enough to go say 30% and the business gets valued by the market at NTA at some point and that NTA will be much higher too... Then that's some pretty serious stuff.

Berkshire, although I already owned a lot purchased pre $200, I knew enough to swing seriously at the fence at $260 despite being told I was an idiot by all share traders greatest fools. But I know Berkshire a lot better than OCA.

[SailorRob]

Operating losses increased by 20M which ain't good. Refer P49 top right


Umm, that's a cash flow statement old boy.

In the West we use something called Accrual accounting, best you study up on what that means.

Then figure out what 'operating' for this company actually means, what are its actual operations?

Then go through the income statement and carefully analyse the 'revaluations' and exactly how they come about. Is it just someone making it up with the stroke of a pen? Or is it something more substantial? And what exactly is it?

[X-men]

Lol ..if so true ...why big fundies are not loading up....

Big fundies bought high n sold low then retail investors are munching it....

Oh wait....thier analysts are not smart like U....lol

U r full of crap sailor moon...

[Daytr]

Umm, that's a cash flow statement old boy.

In the West we use something called Accrual accounting, best you study up on what that means.

Then figure out what 'operating' for this company actually means, what are its actual operations?

Then go through the income statement and carefully analyse the 'revaluations' and exactly how they come about. Is it just someone making it up with the stroke of a pen? Or is it something more substantial? And what exactly is it?

Really who knew. 🙄
Cash in vs bigger amount of cash out.
Operating loss for what they charge residents in weekly fees etc vs what it costs to operate the villages.

Nice put down in the other thread by the way.
You really are getting desperate.

[SailorRob]

Really who knew. 
Cash in vs bigger amount of cash out.
Operating loss for what they charge residents in weekly fees etc vs what it costs to operate the villages.

Nice put down in the other thread by the way.
You really are getting desperate.


Day Trader,

Why don't you look on page 55 where the operating segments are laid out in a proper income statement method for all to see?

Why are you disingenuously picking data from a cash flow statement that has little to do with what you are trying to show?

You could also look at page 59 where expenses are detailed.

[bull....]

Operator Your first question comes from Bianca Fledderus with UBS.


Bianca Fledderus

So first question from me is just around your new unit sale prices on Slide 12. Overall, that's looking good, but apartment new sale prices fell. And I know you mentioned that depends on geography and products. But I was a bit surprised by that -- given that's what The Helier will be included in, so would you be able to talk about what's driving that decline?




Brent Pattison


Yes. Good question, Bianca. I think for us, it was really just the mix. So if we think about The Helier, the influence in that FY '24 year has only been 13 IOU and 4 care products. So as a consequence, we haven't yet seen the material uptick that's going to occur in the apartment side. We've been selling through, obviously, some of our Awatere product in Hamilton, which has the least [ in value ] BayView, Eden, the last of Eden, Bellevue, et cetera.
So most of it is actually just mix rather than anything that we see untoward in our actual apartment levels. Looking ahead, we obviously see stabilizing pricing in the market. We haven't been a price takeout. We've been a price setter and we're expecting levels to be up around that, if not well in excess of that as we sell through some of those premium products.




Bianca Fledderus


Okay. And then just following up on The Helier. So you mentioned 25% of apartments are sold or under application and 20% of care suites. Could you share what percentage are actually sold?




Brent Pattison


So we have 13 that have been -- 13 IOU that have been recognized in April '24. And we have 4 care residents. We have 7 under application, where we've seen settlements in May -- April and May of IOU and 2 additional applications for care residence.




Bianca Fledderus


Okay. Okay. And then -- yes. Okay. So you mentioned the residential property market is still challenging and impacting sales at that village. And so with these more recent ones, I guess, did you have to lower prices at that village or offer any sort of increased incentives?




Brent Pattison


We haven't lowered prices, no. And I know that's a question that's been on people's minds. It's actually been more of just about confidence. People love the product. Lots of people are sitting there waiting for a stabilization in market. It's less about their expectations of what they're going to get from their homes, because a lot of the homes are obviously in the $5 million, $6 million, $7 million range that they are selling.
They just want confidence that if they market and go through that change, that there's going to be a willing buyer on the other end. So it's actually been less about market prices and more actually about an incoming buyer. Are they going to be able to finance it. Are they going to be able to afford that financing at higher interest rates.
As Adrian moves us to hopefully lower interest rates towards the end of this year or early next year, then I just think that it will help with sentiment. So people love the product. People are happy with the price. People are happy with the services, but they need to see some confidence. And as people know, there's an abundance of listing. So eventually, the market will clear that abundance of listings.




Bianca Fledderus


Yes. Okay. But -- so based on that, it sounds like first half of '25 may still be quite weak on sales for The Helier and then hopefully, we'll see an improvement in sort of second half of '25 for that village?




Brent Pattison


Yes. I think we're not necessarily seeing it the same as that, but I think we're just being cautious. And we know that it's something that people are focused. That's a flagship property for us, so we're been cautious. But what we have done is run various scenarios. And under each of those scenarios, we're confident that we will be cash positive with the sales that we'll make out to FY '25. So we would have recovered our investment effectively.




Bianca Fledderus


Yes. Okay. And then also there was a decent uplift in payments to suppliers and employees. And I remember you mentioned that The Helier would have high OpEx from day one. Could you talk about what drove the uplift? And how much of that is driven by the opening of The Helier?




Kathryn Waugh


Bianca, it's Kathryn here. I haven't got specific numbers for the call. But yes, as you mentioned, a few of our sites, because of the timing of openings, will be running at slight operating loss for the few months and The Helier, being one and also some of the other developments Brent had spoken to. That's natural in the cycle of it.
And because of the level of service that we provide and the experience that we want for residents, we've always had the motto that the operating model will be there 100% on day 1, even if there's only 1 resident and that will decrease over time. The other thing you will have seen is in our Village segment, there's an intentional additional investment in marketing spend, in particular.
We've been putting some more money to brand awareness. And you guys, if you got on early for the call, we'll have seen our recent TVC campaign, so -- and we're really proud of what that's done and the insights it's bringing to future residents and there's intentional spend from that.




Bianca Fledderus


Okay. And will that continue into FY '25? The marketing spend and all of that?




Brent Pattison


Yes. So what happens, the latest advertisement, Father and Son, as part of a series of properties that we had. So the first property was our residents telling their stories. The second property was around a couple playing piano in our care suites. The third property was around some residents moving into our apartments and taking their treasured dining room table. And the last has really been this notion around the care and the quality of care that we provide. So as a person's needs change, we are there. And I'm sure you love the theme song around sort of, "lean on me," and that's part of what we're trying to get to.
That is the last of a major spend. We've seen significant increase in familiarity, brand awareness, and we're excited with the properties that we've developed. So that marketing will taper. Where that marketing gets directed, Bianca, is into our inquiry levels, into our research and resident insights to drive -- it's more demand driven around improving our sales cadence and performance.




Bianca Fledderus


Okay. Great. And then last question for me. So you disposed of some assets in FY '24, so more in the first half of '25. Is that, essentially, the completion of your disposal program? Or are there any other assets you are considering selling.




Kathryn Waugh


No. There are some more left there, Bianca. In our financial statements. We have a disclosure as to the quantum of those. So yes, there are still a handful, but we'd hope to have those underway by the end of 30 September. So at the interim, you'll hear more from us on those.




Operator


Your next question comes from Arie Dekker with Jarden.




Arie Dekker


Just starting on the development pipeline. So you give a clear steer to nearing completion for most of it in '25. Outside of Meadowbank and Franklin, where you're sort of commencing works. Are you going to commence anything else into FY '25. And can you just talk about what we should be sort of expecting based on that for delivery into FY '26, because it's looking a bit done if you don't.




Heath Milne


Yes. Well, it's interesting, Arie, because as we build, our debt goes up, so we get hammered for that. But also, we're in a situation where we need to obviously sort of temper that pipeline. So if we think about into FY '26, we're moving into these broad acre developments, and they allow for staging, they allow for acceleration of capital if necessary.
Two obvious developments in [ Nam?ra ], which is in Franklin and Auckland, but also the acquisition that we did some time back, Bream Bay, which is in Ruak?k?, which allowed us to access a large side across the road as part of that transaction. Coupled with that, we'll be continuing, we said earlier, future site developments at BayView future development sites. We are at Lady Allum, et cetera.
So part of that is the job of the new CEO, I guess, but part of it is also the existing team, having a very strong view on the right product, right place, and where we are in the cycle. We've had a very, very intensive investment period around apartments and care suites. We're coming out of care suites. We're coming out of apartments. We're going into other product typologies. You can even see, with the deliveries that we have in forecasting for next year, [ roads are on them ]. We're starting to get to sort of almost the final stages of those buildings.
There's plenty for us to pivot towards, Arie, and it's really a matter of in that Golden Triangle where we can see good support for the end product. We're obviously going to go hard, but that will also be part of Andrew and the team and the new CEO thinking about where do we want to spend that next dollar in 2026.
And whilst we haven't, over this financial year, started maybe the same amount of development that we have in previous financial years, Andrew's team has remained very active in advancing design processes for our other care sites. Allum, where there's further -- there's further stage of development there, Lady Allum and Bream Bay as Brent mentioned as well.




Arie Dekker


I understand what you're looking to manage. So yes, the commitments that sit on the balance sheet at the end of financial year of $45 million, that pretty much is associated with those completions and finishing at Meadowbank in terms of further density. You're not looking to open anything up at this stage in FY '25?




Brent Pattison


Yes. No, and I think that's a good question. And hopefully, that's what we're providing assurance around. So you're exactly right, Arie. That's what it is. You can see in the graphics, scaffoldings are coming down, cranes are being removed, roofs are going on. In some instances, if we think about Elmwood, we're nearly ready to open the building. So a lot of the future debt, if you like, or development debt is already in-train or being spent or has been spent, I guess, to bring that new product to market.




Arie Dekker


That's helpful. And then final question just on this vein of questioning. So the reason you haven't looked to increase your facilities is pretty deliberate. You're essentially -- you're not worried about the risk of settlement timing in this market because actually, you're not looking to commit to a lot of new development. And so you'll sort of finish off what you committed to. It's not much and the settlement proceeds sort of come in. And for that reason, you haven't looked to increase your facility around that.




Brent Pattison


Yes. Sorry, you go ahead, Kathryn.




Kathryn Waugh


Yes. Brent can add to this. But, essentially, yes, Arie. I mean, we're sitting at $100 million of headroom today. That's plenty for what we need with the developments that we've got planned for the next 12 to 18 months. It's obviously something that we look at regularly. If the time comes in the future, then we will look at it. I talked about our key refinance date is out to '28, but obviously, we'll address it before we get to that point.




Brent Pattison


Yes. I think the other thing that we're mindful of, Arie, it's not a great time to be negotiating with banks' a favorable kind of financing facility at these sort of rates. So one of the hallmarks of Oceania has been to sort of peck windows, I guess, that bring our weighted average cost of capital down, bring diversity and tenure into our facilities, whether that's through bonds, whether that's through a refinancing event that Kathryn and I worked through, just trying to assist with that.
But there's plenty of headroom. And this is a deleveraging story for us. We've got some fantastic product that we have in market with a recovering housing market sentiment, albeit it keeps getting kicked down the road. But we do see a recovering housing market into '25, and we'll be focused on doing what we've done over the last 6 months, getting through that sort of unsold stock and delevering the balance sheet.




Arie Dekker


Great. And then just 2 quick final ones, hopefully. Just on the receivables, that balance of ORA receivables is climbing. The vast majority of it, you expect to realize within 12 months. Kathryn, could you just remind us what the approach is there in terms of what drives that growth and the short-term part of that ORA receivable to $74 million now? And then also what's driving the increase of the greater than 12 months from $10 million last year to $20 million this year.




Kathryn Waugh


Yes. Thanks, Arie. So yes, you're right. The short-term receivable is ticking up at $74 million at March. What I would say is, though, and we obviously analyze this every month, the portion of that, there's a high portion that's with under 3 months. And as we bring more and more care suites to market, we are naturally going to see that number increase, care suites and needs-based product.
It's one where we generally offer a 60-day deferral on entry because the person needs to be in that day or that week. And they're generally not having to sell the family home to pay that, but it's just a matter of getting the paperwork in order. So it's a low-risk thing for us on the care suites. Occasionally, we'll allow a portion of an IOU to defer a small amount for a short term as well. And so it generally, we'll build but not age, if that makes sense.
On the longer-term stuff, again, occasionally, sometimes we offer a 10% deferral or what you'll find is some of those have just only marginally ticked into the 12-month period. They're not delayed forever or not delayed till settlement, but they are more than 12 months. So we can't classify them a short term.




Arie Dekker


Sure. And then a final one for you, Brent, and, like, I appreciate it's not something you'd be there to execute on, but you guys have had some success in getting close to book or around booked for the divestments, albeit pretty small assets. Can you just sort of comment on whether the Board has considered divesting assets of larger size given the large value gap that's there and that being a potential means of sort of looking to close it?




Brent Pattison


Yes, I think that's a good question, Arie. I mean, it's frustrating when we think about the value gap, and part of that might have been sort of coming out of an index and not having a marginal buyer for the stock at that time. But I'm talking about the shares, obviously.
But from my perspective, we're in a situation where we look at the capital allocation of our sites. We looked at the portfolio transformation. So where do we want to be. Where do we know that there are good buying signals for residents. How do we create fantastic communities for people. And how do we make sure that these have embedded value that goes on, so how do we get that annuity.
So Kathryn, myself and the team went through, and we looked at sort of what's the trade-off between operating earnings. What's the trade-off around maintenance capital. What's the trade-off around competitive environment. What are our capital allocation rules and hurdle rates that we've got ahead. That's how we came up with our initial kind of divestment portfolio.
But we also know that we've got some crown jewels. So what do we think about those. Are we the best and highest owner of those and a deleveraging of the balance sheet. At this stage, we've taken a pretty prudent approach. We have tried to demonstrate to the market that we have kept our operating earnings kind of roughly in line and being able to recycle cash. And that's been our primary focus, first and foremost.
It will be for somebody else to consider. But I think we're pretty happy where the portfolio's at. I touched on it earlier, Arie. [ It's ] one of our total sites that represent about 85% of the $3 billion. So we think we've got the sort of portfolio that we want to keep. And we think that we're going to start to see some pretty attractive annuity DMA coming off there. Our occupancy is lifting, resident satisfaction's lifting. So that's a challenging one.
We're also talking about a market where the types of sites that we have divested, there's -- and we've spoken to before, a theme in the service offering of those sites, largely care-focused. And there's a reason why, for the market that's out there, that's desirable. When you start going into the other end of our portfolio, it doesn't have the same features that, obviously, that market would look for. So it would be a completely different proposition.




Operator


Your next question comes from Aaron Ibbotson with Forsyth Barr.




Aaron Ibbotson


Brent, good luck with your future plans and thanks for good, robust discussions. I got a couple of questions. I guess my first question is on what I would call core debt, I'm not sure what you would call it, but basically, the difference between what you highlight as development assets and net debt.
So a year ago, you had $600 million of development assets and $550 million, call it, of net debt. Now you still got $612 million over development assets, but $630 million of net debt, call it. So there's a quite material increase and particularly, in the second half, there was a big jump.
So I'm just trying to understand your view of this and how you expect this core debt to develop as you potentially, depending on what the market does, sell down some of your inventory. Is this quarter that's going to continue to sort of creep up, this difference between these 2 numbers?




Kathryn Waugh


Yes. Thanks, Aaron. It's Kathryn here. It's a good question. I mean, a couple of years ago, 3, 4 years ago, core debt, we'd really only use it as a kind of month-on-month working capital to have a buffer and occasionally, from time to time, we'd use it for dividends. If you remember when we did the project to purchase Remuera Rise and Bream Bay, we used our core debt facility at that time, which is why it's ended up at a higher, more stable level.
And we have also been using it recently to buy small parcels of land. So you will have seen our disclosures and we've been buying a few of the pieces of land at the back of The Helier. So I guess that explains why it's where it is at the moment. To your question about how do you see it...




Aaron Ibbotson


I'm sorry. Kathryn?




Kathryn Waugh


Yes?




Aaron Ibbotson


Buying land should not increase it, because presumably, you pay and then you put that land in unsold, undeveloped plan, no? So I'm looking at Slide 14 here, and I'm comparing the $612 million with your net debt number. So if you buy land for $20 million, that $612 million goes up by $20 million and your net debt goes up by $20 million. So that gap does not open up because of land acquisitions.




Kathryn Waugh


No, I understand, I understand. I was just touching on the drawn amount to start with. So -- but kind of -- sorry, rounding out what I was saying. So the drawn amount, kind of that's where we've got to the level it is. If I answer your question first about how we see it going forward and what's going to happen with that core debt, we touched on, a few times, myself and Brent, about how, as we sell down developments, that cash obviously goes against the development facility in the first instance.
Going forward, once we're at a cash-neutral position, which we're expecting we will be by the end of this next financial year with The Helier, we can use those funds to be kind of allocated against our corporate facility. So that will see us bringing that number right down and having more of a headroom in our working capital. And you'll note this morning, you also touched on how we can move between the 2 facilities, so between our corporate and our development. And so that's kind of the roadmap for where it's going. And yes, I don't know if Brent wants to add anything about the…




Aaron Ibbotson


Sorry Kathryn, I'm not asking -- sorry, Kathryn, I don't really mind which facility you put it in and how much you draw. I'm looking at the total overall amount, yes? So you reported net debt of roughly $630 million and development assets of $612 million. That's a negative $20 million.
At the half year, you reported $634 million of development assets and roughly $607 million of net debt. That was a $25 million positive. So your -- the way I would think about core debt has gone up by $45 million over the last 6 months. We don't have to call it core debt. We can just call it the difference between these 2 numbers.
It's gone up by $45 million in the second half, so effectively, what I'm saying is your development assets seem to have gone down a lot more than I would have expected given what your sales proceeds are and how much CapEx you're spending. So I'm just trying to understand maybe these are the ORA receivables or something. But I'm just trying to understand why the difference between these 2 numbers have gone up by $45 million in the second half since the first half.




Kathryn Waugh


Yes. Okay, I understand.




Brent Pattison


So some it, Aaron, might be buybacks. So that's probably a consideration.




Aaron Ibbotson


That was positive in the second half according to disclosures.




Brent Pattison


Yes. So I'm just trying to think about what is driving that difference that you've just given us. So let us answer it, call you off-line so that we've got time to just work through that. We don't have the materials in front of us. But if I think about what's happening with the development assets, some of it's going to be valuation. Some of that's going to be buybacks and how we've used the facilities, effectively, in our switching.




Aaron Ibbotson


So your unsold new stock, has it been valued down in the half?




Brent Pattison


Not on mass scale, but yes, the other point that I'd add to these numbers is these come from CBRE valuation. So they are subject to movements in things like in-going prices, even other little changes, like parts of sites being changed, I guess, the treatment of how they're valued. We've had parts of sites that have been moved from being treated as development land, actually, back to going concern, so it comes out of some of the buckets in here, if you can really dig down to that level of detail.
The other one on which you point -- which you referenced as well, Aaron, is we refer to, on this analysis, for -- I guess, for conservatism, we refer to unsold stock per our CBRE evaluations, which doesn't account for deferred settlements or, yes, for sites that are -- there's a bunch of The Helier sales, which are not included in our unsold new stock, which settled after balance [ debt ], for example. So that receivable is the other side of it.



Aaron Ibbotson


Yes. It's just a bit unnerving when these numbers move unexpectedly by such large amounts. But anyway, second question for me. Just -- you touched on CapEx and $100 million being comfortably enough to finish off, I'm not sure if that's a net or a gross number, but I think it would be really helpful for me and maybe for others, if you could go through what CapEx you've got remaining on sort of the 3 or 4 projects you're finishing this year, so Elmwood, Waterford and Awatere.
How much -- I mean, if I look at the pictures, it looks like it's not that much left, but I remember thinking that for The Helier and there was quite a lot left. So I'm just curious to understand, is this, what, $20 million a village or less? What are we looking here, approximately, to finish these 4 listed projects this year? I appreciate there's other CapEx as well.




Kathryn Waugh


Yes, yes. No, you're right. So I think the easiest way of probably looking at it as if I look back to the question that Arie asked, which was around the -- in our stat account where we talk about what are we committed to. So we committed to another $45 million in the next 12 months.
That covers those kind of the top half of the slide that Brent had of the pictures that are underway. That doesn't include the cost of Franklin. We are out for tender on that at the moment. So it includes what we need to finish, the earthworks, but not the development as such.
So I view it as a $45 million for Elmwood, Waterford and Awatere and Meadowbank. And then Franklin, as we said, we're the controllers of that destiny of when we start. When we do start, Stage 1 will be a handful of villas. We're also going to start the development of the community center and the care facility at that time.




Aaron Ibbotson


That's super helpful, Kathryn. But just to spell it out, though, I guess Arie and I are asking the same questions in different ways. But looking at this then and looking at your sort of wait-and-see approach to a few of the new developments, which personally makes sense to me. It looks like CapEx can fall pretty dramatically this year, and then again, next. Is that fair, assuming no other dramatic developments?




Brent Pattison


Well, we can't -- we don't have a crystal ball, Aaron, on where the market goes. But I think in essence, yes. I mean that's all part of this transformation of the portfolio. We grew the portfolio from $900 million to $3 billion. And now we're going through a tapering. We had COVID and other activities that kind of meant that we were truncated with all of our developments coming on stream at the same time. Helpfully or unhelpfully, all of those developments, as you are aware, were large-scale capital intensive apartments and/or care buildings.
So I think what Kathryn and the team are referring to is there's some flexibility, I guess, in terms of how and when and in what proportions we allocate our capital going forward. We're not going to be stuck in the ground for 3 or 4 years with delivery of 190 apartments or 160 care suites or things of that nature. So that's a long answer to a short -- to your question. But yes, capital can moderate from here.




Heath Milne


And the nuance is that this time, 18 months, 24 months ago, we had twice as much under construction as we do at the moment, committed. And this time last year, I had I think 409 units. So whether we made new decisions or not, we were committed to those projects. Whereas now, we don't -- we're not giving guidance as to what those CapEx numbers are going to be. We have more control over whether we accelerate or delay further development.




Operator
The next question comes from Stephen Ridgewell with Craigs IP.




Stephen Ridgewell


Just first, first of all, good to see the pivot and I see your development strategy to more broad acre and general tapering of development activity in the next couple of years. Just first one for Kathryn, just for the divestments that you've announced and looking to settle, what is the expected EBITDA impact from those divestments, please?




Kathryn Waugh


For the future ones, yes, good question. I might have to come back to you on that one. The ones that were sold today, it's only about $100,000 impact. Going forward, it will be between $1 million and $1.5 million. So for FY '25, it should be between $1 million and $1.5 million.




Stephen Ridgewell


Okay. That's helpful. And then I guess just on the improvement in aged care EBITDA we saw in the second half. I mean, it was good to see following the DHB funding increase. I guess just interested, do you see that run rate in the second half is kind of a good base level as we enter currently FY '25 year? That $12 million per half, is that a sustainable run rate? Were there other kind of cost pressures that we should be mindful of that perhaps sort of dials back a little bit from where it's been. And then can you -- also just interested in occupancy rate towards the end of the period.




Brent Pattison


I think those are good question, Stephen. We're actually really pleased with the direction of travel in the care business. It's been hard yards. We overinvested during COVID, as you know. We're starting to unwind that. I made a comment a couple of years ago that we've become full-time recruiters rather than running a business as we think about the unavailability of sort of clinical staff in particular.

So what we're seeing is a very pleasing improvement in our wage-to-revenue ratios we're seeing a really positive improvement in our occupancy, and some of our sites are setting up around 100%. And as we're selling through our care suites and some of our new developments, we're seeing EBITDA margins improving. We're seeing bed -- if we want to use non-GAAP measures, our EBITDA per bed materially improving. And that's before we get the windfall of some of this new innovation around private pain care and other forms of premiumization that's occurring in the portfolio.
If the government are of a mood to improve our funding, the net material improvement in our performance. And because we have the right sort of platform in place now, then hopefully, what happens is that it's true margin improvement for us rather than pass through.
So I think from where we're sitting, we are actually seeing, for the first time in a long time, a real improvement, cost coming down, stabilization of workforce, medical cost inputs are coming down, occupancies going up in premiumization, i.e., the share of the wallet from our residents is improving our overall kind of financial outcomes.




Stephen Ridgewell


Got it. That's helpful. And then maybe if I just go back to the -- I'd ask another question on -- I guess, if we go back to the interim results, I've probably asked this question at the time about sort of direction of travel. And I think the comments that we noted at the time was an expectation for management debt, that it would be kind of steady or perhaps down a bit, depending on, obviously, sort of activity at The Helier and a few other things.
We've seen net debt sort of pick up about $26 million half-on-half. I'm just interested compared to the internal projections that you had 6 months ago. What was kind of the key line item that was a little bit worse than expected? Was it mainly slower settlement at The Helier and some other sites? Like, just a little bit more color would be helpful, please.




Kathryn Waugh


Yes. Thanks, Stephen. I think probably the key thing is a few of those divestments we thought might have settled in March. So you will have seen we've had another $16 million of sales proceeds in April and May. We've got another site that's under contract at the moment. Had they fallen into 31 March, then we would be a lot steadier.
As you say, there's a $26 million left, $16 million of that is funds that we've received post the balance date. There's also a little bit of reinsurance funds that we would have hoped to have had by now, but that's kind of trickling through in May and June as well.




Brent Pattison


Yes. But also, I think if we address the -- we probably expect it to be a little bit further along in the sell down of The Helier. We did -- the team have done an outstanding job, Stephen, as it relates to sales, $476 million. That's the best performance we've actually had. All of the markers, from my perspective, were up. But those were very, very material kind of outcomes for us.
So as Kathryn said, $10 million in divestments and $16 million in other elements and then maybe 2, 3, 4 more sales at The Helier, we'd be back down to sort of our debt starting with a 5 rather than starting with a 6. And so that's probably giving us some of the confidence that you're hearing on the call around this kind of deleveraging and what's actually happening in the business.




Stephen Ridgewell


That's helpful. And just one last question from me again, sort of -- but maybe putting the front book to one side, and maybe just looking at the cash generation from the existing assets, which is something we do track pretty closely, and you have good disclosure as a company that we can actually work it out.
We can actually work it out for a lot of [ operators ], so we thank you for that. But I guess if you sort of look at the kind of operating cash flows and your backed out deal interest to allocate it to development, back out the new sales receipts and then subtract the maintenance CapEx that the company, on numbers, kind of burst out $27 million in FY '24.
And I guess I'm just interested, how much of that is start-up losses on new villages? Obviously, there's been a lot of new product that you've come out with in the last few years. And then, I guess, the pathway to really get into a positive cash generation or positive cash generation from existing or back book of assets. I think it would just be quite helpful how management kind of thinks about, perhaps, the time frame to achieve it as you start to kind of wind down the front yard, the development book in the next few years.




Kathryn Waugh


Yes. Thanks, Stephen. I'll start, and then I'll let Brent fill some of the gaps. So you're right about the operating losses. Where we've experienced that the most is on our care developments. And so as you know, we move over as many residents as we can to make them as efficient as they can from day 1.
But inevitably, until you've got a full building, there will be a little bit of a drag. And Elmwood comes online at the end of this year, so we'll have that impact in '25, but that is really the last of our brownfield care development. So we do expect that kind of drag that we've experienced over the last couple of years will disappear in the future. And I might let Brent talk to…




Brent Pattison


I think you've covered it wonderfully, Kathryn. I think all that's happened, Stephen, is that we've had this pivot out of care, so we're doing the last of that large-scale premium care and those assets are really -- you've got to operationalize them from day dot. And as a consequence, they come with a pretty heavy operating impact.
We're stopping that. We're moving away from that. We feel like we've got a pretty full portfolio now of where we want to be around care. And it goes to my sentiment around wage-to-revenues coming down. Occupancy is going up, but also the disruption that we've had in our numbers in past years.
We've decanted residents, undertaken an intensive developments around care. We're kind of at the end of that. So Elmwood is the last sort of major key suite delivery. And therefore, people will start to get confidence around 18,000, including DMF. We would be moving well into the 20s and possibly into the 30s over time. So that's probably what the strategic intent is. We've just got to deliver it to it.




Operator


Your next question comes from Nick Mar with Macquarie.




Nick Mar


Just on the new sales stock. I was just wondering if you can provide any color. You kind of mentioned, "I will start reporting it when we get to an appropriate level." Any color on where you think that should be for the business?




Kathryn Waugh


I think a nice rule of thumb will be when we're at a point where there's nothing over 12 months, really. And so it's kind of the general churn of what we're bringing to market each year. It's coming through. Yes, I don't have a magic number, Nick. I'll probably stop disclosing it when people stop asking about it.




Brent Pattison


I think the other thing that I'd say, Nick, is that we brought a lot to market. And what's helpful is that of the $350-odd million, there's $50 million that you can't sell anyway because you've got a resident that's already in occupation from previously being decanted. So you're down to $300 million.
Of that $300 million, $200 million of it is the last 12 months. And I think the desire is to get through it as quickly as we can. The $88 million that's left over, we're already -- we're starting to see really good kind of applications on that part of the portfolio. So the team are desiring to have, as Kathryn said, sort of stock sitting not least than 12 months old from a seasonality point of view. But we're starting to make the sort of traction that the market would expect us to be making on the inventories that we built up.




Nick Mar


No, that's great. And then I know there will be some sort of difference in views as the new CEO comes in, but sort of medium-term development out for this business, and I think $250 million to $300 million, as you've talked about before, where do you guys stand today?




Brent Pattison


I think we probably stand to the -- sort of to the lower of that booking. I don't think we're going to be rewarded for bringing 300 units to market tomorrow until we can demonstrate that we've got through the stock that we've got. So the desire by the business is always to be in sort of the lower bands of 30% to 35% from a gearing perspective.
That can change a lot by just having in -- your asset values being considered in a different way. But I think the reality is, Nick, that the market is probably tapering. The market is moving to product that you can see greater and faster recycling of cash. And it's at least, probably for us, in terms of the development of our pipeline, around 250, 300 units per year.
It's actually right product, right place and an ability to demonstrate presales and adoption of the product that we're delivering. I think as a consequence of that, we're probably something starting with a 2 rather than ambitiously starting with a 3.




Nick Mar


And on the back of that, where do you see that sort of $250 million of undeveloped land and WIP sitting? Where do you think that needs to sit as you transition to that sort of follow-up [ cadence ] of development?




Brent Pattison


So you mean in terms of land holding costs, meaning turns or how quickly we turn that soil? I wasn't -- I'm not entirely sure, Nick, what the line of questioning there.




Nick Mar


Sorry, the sort of $112 million of undeveloped land and $147 million of WIP at the moment. In aggregate, does that need to go up or down or sideways to deliver what you're talking about in terms of the medium-term target [ you're building ]?




Brent Pattison


Right. Yes, okay. I think for us, we've got enough in the consented pipeline, and we're in locations that we know we've got to have the right sort of residents at the end of it. But we've always been curious around -- and intentional around building optionality into the pipeline.
When we're in more favorable market conditions, we did some acquisitions. Andrew looks at property opportunities every day. There's availability of land banks. So I think as market conditions improve, it then allows us to just be a bit more expansionary as we think about key locations that we might not be in that we want to be in. But within the existing portfolio, then we've got plenty of time just to develop out what we have.


Operator
Next question comes from Shane Solly with Harbour Asset Management.


Shane Solly
I've got 2 quick questions. The first one, just picking up on the -- getting cash neutral at The Helier in FY '25, what was the sort of key stepping stones to get to cash neutral in FY '25?


Brent Pattison
Not too many more sales, to be honest, Shane. I think the reality is that this project is going to demonstrate some pretty compelling free cash flow above the original investment. It's also going to develop -- it's going to give a pretty outstanding development margin. We don't put a lot of weight on development margins, obviously. We focus on cash.
But I think from our perspective, if we think about the cadence that we're seeing if we think about the inquiry, elevated inquiry levels that we've got, we've got a lot of confidence that a bunch of sales ahead of us and get us there pretty quickly and leave plenty of cash for that sort of upside that the market has been expecting.


Shane Solly
Great. And just a second question then. In terms of your confidence to lift your build rate, and I appreciate what you've just kind of gotten to Nick, but, just, what would actually see you want to lift that build rate? What are the sort of preconditions that you need to see?


Brent Pattison
Well, I think it's about the confidence of the residents. So if it's a care product, we've got to basically see that there's still a willingness for share of wallet, i.e., government/resident paying combinations. If it's apartments and villas, then that's kind of right product, right place.
So we've got some fantastic sites that we would accelerate with just some better market conditions. An obvious one is Lady Allum. We've built a beautiful care building there. It's already fully occupied and great reputation and there are sites available for some apartment developments.
And those apartments would have outstanding views and be highly attractive to buyers and they're present, particularly as other participants, other competitors have pulled the -- hold the product in close proximity to ours. So the market is opening up for us to develop. We need confidence that residents are going to be able to sell through the houses or be able to sell through the share portfolios or other forms of assets to move into occupation with us.


Operator
Your next question is a follow-up question from Aaron Ibbotson.


Aaron Ibbotson
Apologies, but I just need to follow up on your sort of unsold new stock and the valuation of it, because it's -- if I look relative to the half year, you've delivered -- what did you deliver in the second half? 120 or something. And then you sold for $60 million or something like that. So you delivered 120 units and then you sold for $60 million. So I'm just trying to understand how this number went down by $69 million or whatever you said during the call.


Brent Pattison
Yes, I think…


Aaron Ibbotson
That's quite a big number.


Brent Pattison
Yes. So I think probably, given we are sort of 15 minutes over what we have allocated, Aaron. Certainly, Kathryn, I, Heath, we're here. We're happy to sort of answer that question, and we're happy to make it available for others, so can we take that off-line so that we can actually do the maths that you've just done to actually provide the right response?


Aaron Ibbotson
Absolutely. Thank you.


Operator
There are no further questions on the teleconference at this time. I'll now hand it back to Brent, Kathryn and Heath to answer any questions from the webcast.


Brent Pattison
There was just a question -- well, there are a couple of questions from the website, but I'm pretty confident that we've covered those and they're were actually just around visibility of sales, and, I think, we've been very transparent about that. There were some comments around these, and I think we've canvassed that to a degree. We'll certainly circle back on this last question that Aaron's raised.
I would say, in conclusion, this is my last time doing this for Oceania and it has been an absolute privilege for me to work with this team, and I love this job very much. And I think Oceania has delivered a fair result to the market. We've got plenty of cleaning ahead of us, and that's a great opportunity for the incoming CEO.
But I do want to thank everybody for their support of our business. We've certainly enjoyed the robustness of these discussions over the years. and we're really proud of what we've done. So thank you for people, making time available and engaging with us in the way that you do.


Kathryn Waugh
Thank you, everyone.

thx for posting.

Some very evasive comments from management to some questions in there. thank goodness those analyst's ask some good questions

[aquaman]

https://www.sharetrader.co.nz/images/misc/quote_icon.png Originally Posted by Daytr https://www.sharetrader.co.nz/images/buttons/viewpost-right.png (https://www.sharetrader.co.nz/showthread.php?p=1053640#post1053640)
Really who knew. 
Cash in vs bigger amount of cash out.
Operating loss for what they charge residents in weekly fees etc vs what it costs to operate the villages.

Nice put down in the other thread by the way.
You really are getting desperate.





Day Trader,

Why don't you look on page 55 where the operating segments are laid out in a proper income statement method for all to see?

Why are you disingenuously picking data from a cash flow statement that has little to do with what you are trying to show?

You could also look at page 59 where expenses are detailed.

Morning Gents, Im trying to understand the debate/discussion you two are having, which i do enjoy reading but quite often goes way beyond my intellect level. Please correct me if im wrong but surely the cost to operate is above what they charge residents if the occupation levels are low ie newer development that has not had time to sell units to its full potential, but once occupation levels rise then this would become cash positive. So while there are a greater number of newer developements the operating costs will be higher than the residents contribution but this will likely change as more residents fill the halls, or am i over simplifying this?

[SailorRob]

https://www.sharetrader.co.nz/images/misc/quote_icon.png Originally Posted by Daytr https://www.sharetrader.co.nz/images/buttons/viewpost-right.png (https://www.sharetrader.co.nz/showthread.php?p=1053640#post1053640)
Really who knew. 
Cash in vs bigger amount of cash out.
Operating loss for what they charge residents in weekly fees etc vs what it costs to operate the villages.

Nice put down in the other thread by the way.
You really are getting desperate.






Morning Gents, Im trying to understand the debate/discussion you two are having, which i do enjoy reading but quite often goes way beyond my intellect level. Please correct me if im wrong but surely the cost to operate is above what they charge residents if the occupation levels are low ie newer development that has not had time to sell units to its full potential, but once occupation levels rise then this would become cash positive. So while there are a greater number of newer developements the operating costs will be higher than the residents contribution but this will likely change as more residents fill the halls, or am i over simplifying this?


You are exactly right,

In the earnings call I posted yesterday they highlighted how they have full staff and service for the 'hotel' even is there is only one guest.

The issue we are debating however goes beyond this.

He is just looking at the cashflow statement and looking at cash in vs cash out for the period and there are two seperate, three actually, issues with this.

1. A cash flow statement just follows cash over a certain period, so if they make a massive payment for serves over the next 10 years, that will look awful for this particular period, but for the next 9 years will look great. This is why we have income statements to smooth out the income/expenses to match the periods they are applicable.

2. The line item on the cash flow statement 'payments to suppliers and employees' is not detailed as to what these payments are for and what they are to go against in revenues.

3. The information he is trying to convey (operating expenses and revenues) is highlighted in great detail and appropriately timed just a few pages down as I have highlighted.

What he is doing is obfuscation.

But on top of all this, you are right in what you have observed as well.

[SailorRob]

You are exactly right,

In the earnings call I posted yesterday they highlighted how they have full staff and service for the 'hotel' even is there is only one guest.

The issue we are debating however goes beyond this.

He is just looking at the cashflow statement and looking at cash in vs cash out for the period and there are two seperate, three actually, issues with this.

1. A cash flow statement just follows cash over a certain period, so if they make a massive payment for serves over the next 10 years, that will look awful for this particular period, but for the next 9 years will look great. This is why we have income statements to smooth out the income/expenses to match the periods they are applicable.

2. The line item on the cash flow statement 'payments to suppliers and employees' is not detailed as to what these payments are for and what they are to go against in revenues.

3. The information he is trying to convey (operating expenses and revenues) is highlighted in great detail and appropriately timed just a few pages down as I have highlighted.

What he is doing is obfuscation.

But on top of all this, you are right in what you have observed as well.


And actually a 4th issue is that people are misunderstanding what this businesses operations actually are, the operations are not just running villages and care facilities, the business operations is also to a very large degree property development.


​

[winner69]

My buddy Rob said Daytr “ What he is doing is obfuscation”

I’d say Oceania themselves are doing the obfuscating …and they are masters of it

[ValueNZ]

It's not just a function of the price, but also my understanding of the Business.

To go over much over 10% I would need to do an immense amount of work, which I intend to do. If I am comfortable with what I think I already know, then the potential is there to go to 20% plus. Who knows, maybe even 40%. This is how you get seriously rich. You have to know when to swing for the fences.

I am very confident this business is worth far in excess of NTA. If I keep just NTA value as a massive margin of safety to my actual estimated value and I am sure enough to go say 30% and the business gets valued by the market at NTA at some point and that NTA will be much higher too... Then that's some pretty serious stuff.

Berkshire, although I already owned a lot purchased pre $200, I knew enough to swing seriously at the fence at $260 despite being told I was an idiot by all share traders greatest fools. But I know Berkshire a lot better than OCA.
Great response, that all makes sense. Thanks for posting the earnings call too.

[ValueNZ]

My buddy Rob said Daytr “ What he is doing is obfuscation”

I’d say Oceania themselves are doing the obfuscating …and they are masters of it
A claim like that should be substantiated.

Winner, please tell us exactly what is obfuscated.

[Daytr]

And actually a 4th issue is that people are misunderstanding what this businesses operations actually are, the operations are not just running villages and care facilities, the business operations is also to a very large degree property development.


​

Why do you keep stating the obvious, as if that's not a given. In my original post about this I stated it was excluding the related property development proceeds. So things like DMF, sales & resales are subsidizing the difference between the cost of running the villages and the amount of fees generated from residents.

I highlighted exactly what I wanted to highlight.
An ongoing & increased loss of the day to day running of villages. Yes new developments will impact this until they are sold but not to the tune of $40M.

Other retirement industry operators seem to operate at a day to day profit despite facing the same challenges of new development occupancy.

Anyway, beautiful Saturday here & I'm off to enjoy it.

[SailorRob]

Why do you keep stating the obvious, as if that's not a given. In my original post about this I stated it was excluding the related property development proceeds. So things like DMF, sales & resales are subsidizing the difference between the cost of running the villages and the amount of fees generated from residents.

I highlighted exactly what I wanted to highlight.
An ongoing & increased loss of the day to day running of villages. Yes new developments will impact this until they are sold but not to the tune of $40M.

Other retirement industry operators seem to operate at a day to day profit despite facing the same challenges of new development occupancy.

Anyway, beautiful Saturday here & I'm off to enjoy it.


Your comments on points 1,2 and 3 would also be funny to read.

[mistaTea]

So much squabbling 🫣🤭

[Mrbuyit]

Will we actually hear back about the ~45M gap Aaron asked about..


There seemed to be a lot of umming and aahing for a property development company.

[bull....]

the analyst aron asked good question around cashflow , management could not answer about discrepancies. they will get back to him privately

[Mrbuyit]

Also unless i misinterpreted Brent mentions that the incoming residents need to unload properties in the 5-7m range, is this for real?

[SailorRob]

the analyst aron asked good question around cashflow , management could not answer about discrepancies. they will get back to him privately


I thought it was arooon no?

[Balance]

My buddy Rob said Daytr “ What he is doing is obfuscation”

I’d say Oceania themselves are doing the obfuscating …and they are masters of it

Obfuscation is one word for what Brent & OCA were doing. Clueless could be another?

From the Q & A :

Aaron Ibbotson
Apologies, but I just need to follow up on your sort of unsold new stock and the valuation of it, because it's -- if I look relative to the half year, you've delivered -- what did you deliver in the second half? 120 or something. And then you sold for $60 million or something like that. So you delivered 120 units and then you sold for $60 million. So I'm just trying to understand how this number went down by $69 million or whatever you said during the call.


Brent Pattison
Yes, I think…


Aaron Ibbotson
That's quite a big number.


Brent Pattison
Yes. So I think probably, given we are sort of 15 minutes over what we have allocated, Aaron. Certainly, Kathryn, I, Heath, we're here. We're happy to sort of answer that question, and we're happy to make it available for others, so can we take that off-line so that we can actually do the maths that you've just done to actually provide the right response?


Aaron Ibbotson
Absolutely. Thank you.


Operator
There are no further questions on the teleconference at this time. I'll now hand it back to Brent, Kathryn and Heath to answer any questions from the webcast.


Brent Pattison
There was just a question -- well, there are a couple of questions from the website, but I'm pretty confident that we've covered those and they're were actually just around visibility of sales, and, I think, we've been very transparent about that. There were some comments around these, and I think we've canvassed that to a degree. We'll certainly circle back on this last question that Aaron's raised.
I would say, in conclusion, this is my last time doing this for Oceania and it has been an absolute privilege for me to work with this team, and I love this job very much. And I think Oceania has delivered a fair result to the market. We've got plenty of cleaning ahead of us, and that's a great opportunity for the incoming CEO.
But I do want to thank everybody for their support of our business. We've certainly enjoyed the robustness of these discussions over the years. and we're really proud of what we've done. So thank you for people, making time available and engaging with us in the way that you do.

[SailorRob]

Also unless i misinterpreted Brent mentions that the incoming residents need to unload properties in the 5-7m range, is this for real?

I think you have to be honest, was pretty detailed and clear what he said, or so I thought.

[nztx]

A fair dallop of borrowings in latest report

Also a fairly large dallop of pie in the sky values up - is where the illusive deep value is hiding
if it can be pinned down ? ;)

seems to me that the poor unfortunates who happen to fall into a few of these shares might be waiting a very very long time to see any of it ;)

[SailorRob]

Obfuscation is one word for what Brent & OCA were doing. Clueless could be another?

From the Q & A :

Aaron Ibbotson
Apologies, but I just need to follow up on your sort of unsold new stock and the valuation of it, because it's -- if I look relative to the half year, you've delivered -- what did you deliver in the second half? 120 or something. And then you sold for $60 million or something like that. So you delivered 120 units and then you sold for $60 million. So I'm just trying to understand how this number went down by $69 million or whatever you said during the call.


Brent Pattison
Yes, I think…


Aaron Ibbotson
That's quite a big number.


Brent Pattison
Yes. So I think probably, given we are sort of 15 minutes over what we have allocated, Aaron. Certainly, Kathryn, I, Heath, we're here. We're happy to sort of answer that question, and we're happy to make it available for others, so can we take that off-line so that we can actually do the maths that you've just done to actually provide the right response?


Aaron Ibbotson
Absolutely. Thank you.


Operator
There are no further questions on the teleconference at this time. I'll now hand it back to Brent, Kathryn and Heath to answer any questions from the webcast.


Brent Pattison
There was just a question -- well, there are a couple of questions from the website, but I'm pretty confident that we've covered those and they're were actually just around visibility of sales, and, I think, we've been very transparent about that. There were some comments around these, and I think we've canvassed that to a degree. We'll certainly circle back on this last question that Aaron's raised.
I would say, in conclusion, this is my last time doing this for Oceania and it has been an absolute privilege for me to work with this team, and I love this job very much. And I think Oceania has delivered a fair result to the market. We've got plenty of cleaning ahead of us, and that's a great opportunity for the incoming CEO.
But I do want to thank everybody for their support of our business. We've certainly enjoyed the robustness of these discussions over the years. and we're really proud of what we've done. So thank you for people, making time available and engaging with us in the way that you do.

Balance, this is not a easy company to analyse, you should start somewhere else.

Grow into it, will take time.

[SailorRob]

A fair dallop of borrowings in latest report

Also a fairly large dallop of pie in the sky values up - is where the illusive deep value is hiding
if it can be pinned down ? ;)

seems to me that the poor unfortunates who happen to fall into a few of these shares might be waiting a very very long time to see any of it ;)

Spend some time studying how these values are derived.

Report back, less the gormless emojis.

Thanks.

[nztx]

Spend some time studying how these values are derived.

Report back, less the gormless emojis.

Thanks.


Thanks for confirmation of the long wait ahead :)

[bull....]

Obfuscation is one word for what Brent & OCA were doing. Clueless could be another?

From the Q & A :

Aaron Ibbotson
Apologies, but I just need to follow up on your sort of unsold new stock and the valuation of it, because it's -- if I look relative to the half year, you've delivered -- what did you deliver in the second half? 120 or something. And then you sold for $60 million or something like that. So you delivered 120 units and then you sold for $60 million. So I'm just trying to understand how this number went down by $69 million or whatever you said during the call.


Brent Pattison
Yes, I think…


Aaron Ibbotson
That's quite a big number.


Brent Pattison
Yes. So I think probably, given we are sort of 15 minutes over what we have allocated, Aaron. Certainly, Kathryn, I, Heath, we're here. We're happy to sort of answer that question, and we're happy to make it available for others, so can we take that off-line so that we can actually do the maths that you've just done to actually provide the right response?


Aaron Ibbotson
Absolutely. Thank you.


Operator
There are no further questions on the teleconference at this time. I'll now hand it back to Brent, Kathryn and Heath to answer any questions from the webcast.


Brent Pattison
There was just a question -- well, there are a couple of questions from the website, but I'm pretty confident that we've covered those and they're were actually just around visibility of sales, and, I think, we've been very transparent about that. There were some comments around these, and I think we've canvassed that to a degree. We'll certainly circle back on this last question that Aaron's raised.
I would say, in conclusion, this is my last time doing this for Oceania and it has been an absolute privilege for me to work with this team, and I love this job very much. And I think Oceania has delivered a fair result to the market. We've got plenty of cleaning ahead of us, and that's a great opportunity for the incoming CEO.
But I do want to thank everybody for their support of our business. We've certainly enjoyed the robustness of these discussions over the years. and we're really proud of what we've done. So thank you for people, making time available and engaging with us in the way that you do.

yep how does no one at OCA know where 60m odd went :scared:

[Balance]

yep how does no one at OCA know where 60m odd went :scared:

Just a suspicion on my part that Brent is already and long gone from caring too much about OCA - he might be there in body but his mind has long departed to whatever he is intending to do next?

[winner69]

From Annual Report Total Comprehensive Income by segment -

Care. $18.6m
Villages $73.1m
Other $21.2m LOSS

Other is admin and support costs …probably HQ

So there we have it - Care and Villages are profitable …profitable enough to subsidise the fat cats in HQ

[winner69]

Just a suspicion on my part that Brent is already and long gone from caring too much about OCA - he might be there in body but his mind has long departed to whatever he is intending to do next?

Agree mate ….it’s pretty obvious eh

Bit of a worry when says there’s ‘plenty of cleaning’ to be done by the new CEO ….wonder what cleaning really means

[Balance]

From Annual Report Total Comprehensive Income by segment -

Care. $18.6m
Villages $73.1m
Other $21.2m LOSS

Other is admin and support costs …probably HQ

So there we have it - Care and Villages are profitable …profitable enough to subsidise the fat cats in HQ

Please to explain where expenses were booked against?

[Baa_Baa]

... deleted, need more thought.

[mistaTea]

A claim like that should be substantiated.

Winner, please tell us exactly what is obfuscated.

Brent Pattison's responses in the investor call exhibit signs of evasiveness, particularly in how he addresses specific questions with broad, non-committal answers and deflects to general market conditions or future expectations. Here's a detailed assessment:

1. **Apartment Sale Prices (Slide 12):**
- **Evasiveness:** Brent attributes the decline in apartment sale prices to a "mix" issue, referencing the influence of The Helier's sales and other products without providing concrete details on why this mix specifically caused the decline.
- **Lack of Specificity:** He mentions selling through products in Hamilton and other locations but does not detail how these impacted the overall price.

2. **Sales and Applications for The Helier:**
- **Evasiveness:** When asked about the percentage of apartments sold, Brent provides numbers but mixes them with under-application figures, potentially causing confusion about the actual sold units.
- **Clarity Issues:** His explanation includes different statuses (sold, under application) without clearly differentiating them.

3. **Impact of the Residential Property Market:**
- **Evasiveness:** Brent deflects from discussing any direct price reductions or incentives by focusing on market confidence and the broader economic environment.
- **Ambiguity:** His explanation is more about the overall sentiment rather than addressing whether specific measures like price reductions were taken.

4. **Marketing Spend:**
- **Evasiveness:** Kathryn, responding for Brent, doesn't provide specific numbers for future marketing spend but talks broadly about the impact and direction of marketing efforts.
- **Generalization:** The response is vague about future expenditure, indicating a continuation without clear financial specifics.

5. **Development Pipeline:**
- **Evasiveness:** Brent discusses the broader strategy and market conditions affecting development decisions without committing to specific projects or numbers.
- **Avoidance:** He emphasizes the flexibility and scenario planning without detailing immediate or concrete actions.

6. **CapEx and Future Development:**
- **Evasiveness:** When asked about the specific CapEx remaining for ongoing projects, Kathryn provides a general figure and mentions the control over the timing of future expenditures.
- **Non-committal:** The response does not break down costs by project or provide a clear forecast.

7. **Debt and Facility Use:**
- **Evasiveness:** Brent and Kathryn discuss the use of facilities and headroom but avoid providing detailed explanations of the increased core debt and its future trajectory.
- **Deflection:** Brent mentions general strategic decisions and market conditions without addressing the specific financial adjustments.

8. **Divestment Impact on EBITDA:**
- **Evasiveness:** Kathryn's response indicates a need to revert with specific numbers, suggesting unpreparedness or avoidance of detailed impact disclosure.
- **Lack of Detail:** The response lacks immediate, precise figures, implying a degree of evasiveness.

In conclusion, Brent Pattison's responses often reflect a tendency to provide broad, non-specific answers, focusing on general market conditions and future expectations rather than addressing direct queries with precise data or commitments. This approach can be interpreted as evasive, potentially to avoid highlighting unfavorable details or uncertainties.

[peat]

The quote is from 18 months ago when price was in low 70's - sad but panned out that way. As per my other posts around that time I wont be backing up the truck but may buy a few more as am working still (in the insurance industry, yes we have the Zespri claim, though I dont deal with such large stuff myself). Possibly also increase my diversification by getting some SUM


For OCA , technically the March - April rise was still corrective, ie not bullish , mid April - mid May downturn impulsive bearish. so we are still in a bear market with the new low on 14 May. That daily candle was a hammer though, so could be a bottom, but too soon to tell with only 8 days trading since then. Its nice to see RSI staying above 30 even during the down phase.

15120


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

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

[Baa_Baa]

From Annual Report Total Comprehensive Income by segment -

Care. $18.6m
Villages $73.1m
Other $21.2m LOSS

Other is admin and support costs …probably HQ

So there we have it - Care and Villages are profitable …profitable enough to subsidise the fat cats in HQ

It's only profitable because the 'Total comprehensive income' is skewed by +$60.7m Village Operations "change in fair value of investment property", and a +41.2m Care Operations "gain on revaluation of property, plant etc". Neither of these are 'real income' so if they were taken out, the +$70.5 total falls to a -$31.5m 'Comprehensive loss'.

So the questions I have are: a) is it plausible that combined property has achieved a revaluation upwards of +$102m, esp in the current property market?, and b) should these revaluations be included in an income statement at all?

[Balance]

Brent Pattison's responses in the investor call exhibit signs of evasiveness, particularly in how he addresses specific questions with broad, non-committal answers and deflects to general market conditions or future expectations. Here's a detailed assessment:

In conclusion, Brent Pattison's responses often reflect a tendency to provide broad, non-specific answers, focusing on general market conditions and future expectations rather than addressing direct queries with precise data or commitments. This approach can be interpreted as evasive, potentially to avoid highlighting unfavorable details or uncertainties.

If that's how Brent had been handling queries & visits from institutional shareholders and brokers/analysts, hardly a wonder that the stock has been struggling to find support!

For those who are unaware, most of the institutional investors these days will not invest in a company until their analysts have visited a company and/or have a good discussion with the management of the company. If they find that the management are evasive and non-specific when they are asked specific questions, those are red flags which mean they avoid the stock.

[SailorRob]

It's only profitable because the 'Total comprehensive income' is skewed by +$60.7m Village Operations "change in fair value of investment property", and a +41.2m Care Operations "gain on revaluation of property, plant etc". Neither of these are 'real income' so if they were taken out, the +$70.5 total falls to a -$31.5m 'Comprehensive loss'.

So the questions I have are: a) is it plausible that combined property has achieved a revaluation upwards of +$102m, esp in the current property market?, and b) should these revaluations be included in an income statement at all?

Baa_Baa, have a look at how these Revaluations work, it's all detailed in there.

I'm the biggest skeptic, but honestly have a look.

[winner69]

It's only profitable because the 'Total comprehensive income' is skewed by +$60.7m Village Operations "change in fair value of investment property", and a +41.2m Care Operations "gain on revaluation of property, plant etc". Neither of these are 'real income' so if they were taken out, the +$70.5 total falls to a -$31.5m 'Comprehensive loss'.

So the questions I have are: a) is it plausible that combined property has achieved a revaluation upwards of +$102m, esp in the current property market?, and b) should these revaluations be included in an income statement at all?

BaaBaa ..a very good question (as Brent would say)

Oceania have classified most of their care suites as Property, Plant and Equipment and account for revaluations in a Revaluation Reserve and shows up in Other Comprehensive Income.

And yes total revaluations (property and care units were over $100m in F24. The combined does boost the Balance Sheet as it a component of Shareholder Equity….the ‘value’ of the company.

Oceania seems to highlight Total Comprehensive Income as the profit they made …rather than just the reported NPAT

They went great lengths in educating the market why the Total Comprehensive Income is the real profit figure …below is what they used a few years ago as to how it works

Clear as mud eh

[Snow Leopard]

It's only profitable because the 'Total comprehensive income' is skewed by +$60.7m Village Operations "change in fair value of investment property", and a +41.2m Care Operations "gain on revaluation of property, plant etc". Neither of these are 'real income' so if they were taken out, the +$70.5 total falls to a -$31.5m 'Comprehensive loss'.

So the questions I have are: a) is it plausible that combined property has achieved a revaluation upwards of +$102m, esp in the current property market?, and b) should these revaluations be included in an income statement at all?

IF you are taking out those revalutions you may also want to reverse out the depreciation and impairments as well, which would make things less worse.

You can play the game of what you wish to adjust for when forming your 'true' picture of how the company is doing....
But I have to say that my analyses of the accounts shows that this is poorest performance in the last four years!

[winner69]

IF you are taking out those revalutions you may also want to reverse out the depreciation and impairments as well, which would make things less worse.

You can play the game of what you wish to adjust for when forming your 'true' picture of how the company is doing....
But I have to say that my analyses of the accounts shows that this is poorest performance in the last four years!

I’ll second that …not one of their better years

[Baa_Baa]

Baa_Baa, have a look at how these Revaluations work, it's all detailed in there.

I'm the biggest skeptic, but honestly have a look.

Where do I look? Thanks.

@Snow Leopard & @Winner69, thanks for your replies. I was wondering whether they are genuine 'revaluations' anyway, or if it's a co-incidence that the total assets have gone up by about the same amount, which could be a revaluation of existing assets, but could also be new property coming on the books from completed developments?

As @Winner69 says, "clear as mud".

[Baa_Baa]

... deleted, figured it out.

[Baa_Baa]

Baa_Baa, have a look at how these Revaluations work, it's all detailed in there.

I'm the biggest skeptic, but honestly have a look.

Page 64?

"Increases in the carrying amount arising on revaluation of land and buildings above cost arecredited to the asset revaluation reserve in other comprehensive income; increases that offset previous decreases taken through profit or loss are recognised in profit or loss. Decreases that offset previous increases of the same asset are charged against the asset revaluation reserve in other comprehensive income; all other decreases are charged to profit or loss. When revalued assets are sold, or held for sale, the amounts included in the reserve are transferred to retained earnings."

[SailorRob]

Page 64?

"Increases in the carrying amount arising on revaluation of land and buildings above cost arecredited to the asset revaluation reserve in other comprehensive income; increases that offset previous decreases taken through profit or loss are recognised in profit or loss. Decreases that offset previous increases of the same asset are charged against the asset revaluation reserve in other comprehensive income; all other decreases are charged to profit or loss. When revalued assets are sold, or held for sale, the amounts included in the reserve are transferred to retained earnings."

No, I'll post it later, but ultimately a lot of the revaluations occur as developments progress and when new ORA are signed. So it's reflective of actual realised values.

Sales of the crap assets at book back up the valuations.

[SailorRob]

But I have to say that my analyses of the accounts shows that this is poorest performance in the last four years!

Hi snow, do you mean your analysis?

Would you care to share with the thread just four of 5 bullet points to highlight why you think it's the poorest performance in 4 years?

Perhaps highlight 5 metrics against prior years to show what you're seeing.

Thanks in advance.

[mistaTea]

If that's how Brent had been handling queries & visits from institutional shareholders and brokers/analysts, hardly a wonder that the stock has been struggling to find support!

For those who are unaware, most of the institutional investors these days will not invest in a company until their analysts have visited a company and/or have a good discussion with the management of the company. If they find that the management are evasive and non-specific when they are asked specific questions, those are red flags which mean they avoid the stock.

Definitely not ideal when his answers are so vague.

But I can’t understand why he would do that? Clearly some head winds, but nothing insurmountable that would make him duck and dive like that?

Or is it more that he has just checked out and doesn’t give a sh1te anymore?

Some of you may have listened in on previous calls so can offer an opinion on whether this is how he usually is or just in this last call before he moves on.

[SailorRob]

Definitely not ideal when his answers are so vague.

But I can’t understand why he would do that? Clearly some head winds, but nothing insurmountable that would make him duck and dive like that?

Or is it more that he has just checked out and doesn’t give a sh1te anymore?

Some of you may have listened in on previous calls so can offer an opinion on whether this is how he usually is or just in this last call before he moves on.

The earnings call for me was brilliant, gave me more confidence than anything else. How they think about the business etc.

The most telling was the answer to 'why don't you sell assets to close the gap'

They think like Buffett.

[ValueNZ]

The earnings call for me was brilliant, gave me more confidence than anything else. How they think about the business etc.

The most telling was the answer to 'why don't you sell assets to close the gap'

They think like Buffett.
Funnily I thought the exact same thing. That Brent is speaking like a world-class capital allocator.

I wonder why he's leaving?

[mistaTea]

Funnily I thought the exact same thing. That Brent is speaking like a world-class capital allocator.

I wonder why he's leaving?


Christ I almost shat when I read that! lol.

Probably leaving because Buffett is about to announce that Brent will be the new CEO of Berkshire, he decided against Greg after studying OCA and realising Brent’s world class capital allocation skills.

lol.

[ValueNZ]

Does anyone know anything about the new CEO, Suzanne Dvorak? This is her bio on LinkedIn:

Suzanne is an experienced retirement living/aged care executive and external advisor.

As an Industrial Advisor to EQT Group, Suzanne advised in the acquisition of Stockland Retirement Living and was transitional CEO for the newly rebranded business, Levande – one of Australia’s largest retirement living providers with 10,000 residents and 58 retirement villages (formerly owned by Stockland).

Prior to her role at Levande, Suzanne was Managing Director of Bupa Villages and Aged Care – Australia, where she oversaw a team of more than 10,000 employees across 72 care homes to support the needs of 6000 residents.

Suzanne’s experience extends to Executive General Manager, Residential Communities at Australian Unity, with responsibility for the residential communities portfolio – including 18 retirement communities and five aged care residences.

As CEO of Vivir Healthcare, Suzanne was responsible for the delivery of care services to 20,000 patients at residential aged care facilities, hospitals, day therapy, community, medical centres, retirement villages and at home.

Suzanne has also dedicated her career to social justice initiatives, working across health services, government and not-for-profit organisations.

In 2018-19, Suzanne was Interim CEO at safe steps Family Violence Response Centre - Victoria’s state-wide first response service for women, young people and children experiencing family violence.

Following more than a decade leading the Australian team at reproductive healthcare provider, Marie Stopes International, Suzanne was appointed CEO of Save the Children Australia – heading the Australian contingent of the 29 member nation alliance and delivering programs in over 120 countries.

Suzanne has also worked for the United Nations Transitional Authority in Cambodia and Thailand, Telstra and the Australian Red Cross.

She is currently a Non-Executive Director of UNICEF and, in 2005, was recognised for her outstanding career achievements – winning the Hudson Community and Government Award at the National Telstra Business Women’s Awards.

[mistaTea]

Does anyone know anything about the new CEO, Suzanne Dvorak? This is her bio on LinkedIn:

Suzanne is an experienced retirement living/aged care executive and external advisor.

As an Industrial Advisor to EQT Group, Suzanne advised in the acquisition of Stockland Retirement Living and was transitional CEO for the newly rebranded business, Levande – one of Australia’s largest retirement living providers with 10,000 residents and 58 retirement villages (formerly owned by Stockland).

Prior to her role at Levande, Suzanne was Managing Director of Bupa Villages and Aged Care – Australia, where she oversaw a team of more than 10,000 employees across 72 care homes to support the needs of 6000 residents.

Suzanne’s experience extends to Executive General Manager, Residential Communities at Australian Unity, with responsibility for the residential communities portfolio – including 18 retirement communities and five aged care residences.

As CEO of Vivir Healthcare, Suzanne was responsible for the delivery of care services to 20,000 patients at residential aged care facilities, hospitals, day therapy, community, medical centres, retirement villages and at home.

Suzanne has also dedicated her career to social justice initiatives, working across health services, government and not-for-profit organisations.

In 2018-19, Suzanne was Interim CEO at safe steps Family Violence Response Centre - Victoria’s state-wide first response service for women, young people and children experiencing family violence.

Following more than a decade leading the Australian team at reproductive healthcare provider, Marie Stopes International, Suzanne was appointed CEO of Save the Children Australia – heading the Australian contingent of the 29 member nation alliance and delivering programs in over 120 countries.

Suzanne has also worked for the United Nations Transitional Authority in Cambodia and Thailand, Telstra and the Australian Red Cross.

She is currently a Non-Executive Director of UNICEF and, in 2005, was recognised for her outstanding career achievements – winning the Hudson Community and Government Award at the National Telstra Business Women’s Awards.

Only potential ‘blemish’ I can see could be her short stint at Levande.

But I actually think it is a good thing she was prepared to pull the pin when she could see there was a misalignment with her vision and the owners.

****

1. **Transition and Departure from Levande**: Suzanne Dvorak's tenure as CEO of Levande, a retirement living brand, was relatively short. She left the company after about seven months. While this could raise questions, it appears to be related to strategic differences rather than any specific controversy. Her departure was amicable, and she was praised for her contributions during a period of transition [oai_citation:1,EQT Infrastructure launches new retirement living brand Levande – with Suzanne Dvorak as CEO and David Gonski as Chair](https://www.theweeklysource.com.au/topic-acquisitions/eqt-infrastructure-launches-new-retirement-living-brand-levande-with-suzanne-dvorak-as-ceo-and-david-gonski-as-chair) [oai_citation:2,Kevin McCoy steps in as Interim CEO of third largest village portfolio, Levande, as Suzanne Dvorak departs](https://www.theweeklysource.com.au/in-the-headlines/kevin-mccoy-steps-in-as-interim-ceo-of-third-largest-village-portfolio-levande-as-suzanne-dvorak-departs) [oai_citation:3,Kevin McCoy to stay on at Levande as CEO - Australian Ageing Agenda](https://www.australianageingagenda.com.au/noticeboard/kevin-mccoy-to-stay-at-levande-as-ceo/).

2. **Strategic Differences**: During her time at Levande, there were indications that she was advocating for a model that included providing care services directly, which was not fully aligned with the strategic direction preferred by EQT, the owning company. This difference in vision might have contributed to her decision to leave [oai_citation:4,Kevin McCoy steps in as Interim CEO of third largest village portfolio, Levande, as Suzanne Dvorak departs](https://www.theweeklysource.com.au/in-the-headlines/kevin-mccoy-steps-in-as-interim-ceo-of-third-largest-village-portfolio-levande-as-suzanne-dvorak-departs) [oai_citation:5,Kevin McCoy to stay on at Levande as CEO - Australian Ageing Agenda](https://www.australianageingagenda.com.au/noticeboard/kevin-mccoy-to-stay-at-levande-as-ceo/).

[SailorRob]

Christ I almost shat when I read that! lol.

Probably leaving because Buffett is about to announce that Brent will be the new CEO of Berkshire, he decided against Greg after studying OCA and realising Brent’s world class capital allocation skills.

lol.

Anal incontinence must be bloody awful.

[SailorRob]

Does anyone know anything about the new CEO, Suzanne Dvorak? This is her bio on LinkedIn:

Suzanne is an experienced retirement living/aged care executive and external advisor.

As an Industrial Advisor to EQT Group, Suzanne advised in the acquisition of Stockland Retirement Living and was transitional CEO for the newly rebranded business, Levande – one of Australia’s largest retirement living providers with 10,000 residents and 58 retirement villages (formerly owned by Stockland).

Prior to her role at Levande, Suzanne was Managing Director of Bupa Villages and Aged Care – Australia, where she oversaw a team of more than 10,000 employees across 72 care homes to support the needs of 6000 residents.

Suzanne’s experience extends to Executive General Manager, Residential Communities at Australian Unity, with responsibility for the residential communities portfolio – including 18 retirement communities and five aged care residences.

As CEO of Vivir Healthcare, Suzanne was responsible for the delivery of care services to 20,000 patients at residential aged care facilities, hospitals, day therapy, community, medical centres, retirement villages and at home.

Suzanne has also dedicated her career to social justice initiatives, working across health services, government and not-for-profit organisations.

In 2018-19, Suzanne was Interim CEO at safe steps Family Violence Response Centre - Victoria’s state-wide first response service for women, young people and children experiencing family violence.

Following more than a decade leading the Australian team at reproductive healthcare provider, Marie Stopes International, Suzanne was appointed CEO of Save the Children Australia – heading the Australian contingent of the 29 member nation alliance and delivering programs in over 120 countries.

Suzanne has also worked for the United Nations Transitional Authority in Cambodia and Thailand, Telstra and the Australian Red Cross.

She is currently a Non-Executive Director of UNICEF and, in 2005, was recognised for her outstanding career achievements – winning the Hudson Community and Government Award at the National Telstra Business Women’s Awards.

Anyone calling themselves 'Ms', is a bit of a red flag.

Hopefully this is an exception.

[mistaTea]

Anal incontinence must be bloody awful.

You get used to it.

[SailorRob]

Page 64?

"Increases in the carrying amount arising on revaluation of land and buildings above cost arecredited to the asset revaluation reserve in other comprehensive income; increases that offset previous decreases taken through profit or loss are recognised in profit or loss. Decreases that offset previous increases of the same asset are charged against the asset revaluation reserve in other comprehensive income; all other decreases are charged to profit or loss. When revalued assets are sold, or held for sale, the amounts included in the reserve are transferred to retained earnings."


Yeah so it's more about the rest of the paragraph before what you have highlighted.

Page 64 only deals with 'PPE' property not investment property,


'Following initial recognition at cost, completed owner occupied freehold land and buildings and land and buildings under development are carried at fair value. Independent valuations are performed with sufficient regularity to ensure that the carrying amount does not differ materially from the assets’ fair value at balance date. Any depreciation at the date of valuation is deducted from the gross carrying value of the asset, and the net amount is restated to the revalued amount of the asset. In periods where no valuation is carried out, the asset is carried at its revalued amount plus any additions, less any impairment and less any depreciation incurred since the date of the last valuation'.




'A property under construction is classified as land and buildings within property, plant and equipment where the completed development will be classified as such and as investment
property where the completed development will be classified as an investment property. Fair value measurement on property under construction is only applied if the fair value is reliably measurable. Where the fair value of property under construction cannot be reliably determined the value is the fair value of the land plus the cost of work undertaken. Property under construction classified as land and buildings under development is revalued annually and is not depreciated'.


'Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are expensed to the Consolidated Statement of Comprehensive Income during the financial period in which they are incurred'.



So for the PPE property section, a lot of the revaluations are based on the progression of construction and this is very conservatively estimated.

For the investment property it is different again and detailed in another section.

[SailorRob]

BaaBaa ..a very good question (as Brent would say)

Oceania have classified most of their care suites as Property, Plant and Equipment and account for revaluations in a Revaluation Reserve and shows up in Other Comprehensive Income.

And yes total revaluations (property and care units were over $100m in F24. The combined does boost the Balance Sheet as it a component of Shareholder Equity….the ‘value’ of the company.

Oceania seems to highlight Total Comprehensive Income as the profit they made …rather than just the reported NPAT

They went great lengths in educating the market why the Total Comprehensive Income is the real profit figure …below is what they used a few years ago as to how it works

Clear as mud eh


Hi Winner,

As per the red txt, can you point me to where they highlight total comprehensive income? I thought they highlight 'Underlying earnings' which is a totally different thing.

Thanks in advance.

SR

[nztx]

Christ I almost shat when I read that! lol.

Probably leaving because Buffett is about to announce that Brent will be the new CEO of Berkshire, he decided against Greg after studying OCA and realising Brent’s world class capital allocation skills.

lol.


Wonder if a spare space has been identified alongside Grant Buffett down at Otago for a quieter post-crisis 'fade out of sight' lifestyle ? :)

[Ferg]

Thanks to SR for posting the transcript. It sounds like there was a testy exchange with Aaron which started with this question:


Aaron Ibbotson

[snip]my first question is on what I would call core debt, I'm not sure what you would call it, but basically, the difference between what you highlight as development assets and net debt.
So a year ago, you had $600 million of development assets and $550 million, call it, of net debt. Now you still got $612 million over development assets, but $630 million of net debt, call it. So there's a quite material increase and particularly, in the second half, there was a big jump.
So I'm just trying to understand your view of this and how you expect this core debt to develop as you potentially, depending on what the market does, sell down some of your inventory. Is this quarter that's going to continue to sort of creep up, this difference between these 2 numbers?

It appears as if Aaron caught Brent & Kathryn on the hop, but the numbers can be broken down like this:

FY23:

OCA FY23 presentation page 14 had a graph showing development debt of $446m (Aaron quoted $550m) and 'development assets' of $600m.
Development debt last year was made up of bonds of $225m + the development facility of $221m.
Development assets included land $112m, assets under construction $114m + unsold stock of $374m.


Note that the Corporate facility is excluded from the development debt calculation given that was used to fund the 'as built' acquisitions Remuera Rise & Bream Bay. Also note that 'development assets' includes the book value of 'Investment property under development' per note 3.1 and the book value of the column 'Freehold Land and Buildings Under Development' per note 3.2 plus the valuation of new unsold stock. The numbers reconcile ok.

Two issues I can see straight off with this graph is that I suspect some of the undeveloped land at Bream Bay is included in the assets, but has been excluded from liabilities, so there is a potential mismatch. In addition, the book value of the development assets includes fair value revaluations, which were never paid for using debt. But that is a technical observation to which we can turn a blind eye for now. But the point OCA are trying to make is they are showing they have assets that are worth this much that are either being developed or have been recently completed and are available for sale, and we only have this much debt on them. Fair enough.

So now we understand the numbers on that graph that Aaron was referring to.

FY24:

OCA FY24 presentation page 14 had a graph showing 'development debt' of $534m (Aaron quoted $630m) and 'development assets' of $612m.
Development debt this year is made up of bonds of $225m + the development facility of $309m.
Development assets included land $112m, assets under construction $147m + unsold stock of $353m. These values reconcile to assets under construction.


I suspect what caught them on the hop was the numbers quoted by Aaron were not quite right. But in answering such a question, you never 'guess' as to what the answer is. You defer until you have the numbers in front of you. And you certainly don't verbalise the musing that go in your head when you hear such a question. Notice Brent did handle the subsequent question correctly:


We're happy to sort of answer that question, and we're happy to make it available for others, so can we take that off-line so that we can actually do the maths that you've just done to actually provide the right response?

Back to Aaron's first question. What actually happened is 'development debt' increased by $88m but 'development assets' only increased by $12m during the year. This is what Aaron wants to understand - what is this gap of $76m? Notice Aaron thought it might be due to wholesale devaluations of unsold stock which was not the case. And I suspect it has nothing to do with transfers between the Corporate and development facilities given the balance on the Corporate facility remained unchanged (happy to be proved wrong).

This is typical of the sort of question and/or analysis you get when you look at half the picture. An answer eventually came out that there were deferred settlements on some new sales plus other musings. This is what I can see when we look at a few different numbers:

Firstly Accounts Receivable increased from $109m to $125m which would account for *at least* $16m. In the transcript we heard new sales must pay down the development facility. As the AR balance increases, then the development debt facility is not repaid. This $16m is further proved by comparing new sales volumes x average sale prices, to the actual receipts for new ORAs during the period.
This is a surprise to me that OCA are offering care suite ORAs 'on tick' per the urgent needs comment and also the 10% deferred settlements. But it is what it is.
The reason I say 'at least' $16m is because we do not know the split of new sale receivables versus resale receivables. In addition, receivables in excess of 12 months increased by $10m during the year - some of that could also be from sales of new stock.
Also, note that the cost of 'other assets under development' increased in value by $33m.
Lastly, under the 'completed investment property' section in note 3.1 there is $60m of capitalised expenditure that was not transferred from 'investment property under development'. Last year this figure was $5m. I suspect that $60m was also paid for using the development facility but it is not showing up under the 'development assets'. They mentioned the ability to shuffle funds between facilities - maybe this is that.


Adding all this up: $16m in AR + $33m other assets + $60m capitalised directly - $21m reduction in new stock = $88m which more than explains the 'gap' of $76m.

Conclusion: explained / solved. Not an issue.

Kathryn: where shall I send my bill? :)

[mistaTea]

Thanks to SR for posting the transcript. It sounds like there was a testy exchange with Aaron which started with this question:



It appears as if Aaron caught Brent & Kathryn on the hop, but the numbers can be broken down like this:

FY23:

OCA FY23 presentation page 14 had a graph showing development debt of $446m (Aaron quoted $550m) and 'development assets' of $600m.
Development debt last year was made up of bonds of $225m + the development facility of $221m.
Development assets included land $112m, assets under construction $114m + unsold stock of $374m.


Note that the Corporate facility is excluded from the development debt calculation given that was used to fund the 'as built' acquisitions Remuera Rise & Bream Bay. Also note that 'development assets' includes the book value of 'Investment property under development' per note 3.1 and the book value of the column 'Freehold Land and Buildings Under Development' per note 3.2 plus the valuation of new unsold stock. The numbers reconcile ok.

Two issues I can see straight off with this graph is that I suspect some of the undeveloped land at Bream Bay is included in the assets, but has been excluded from liabilities, so there is a potential mismatch. In addition, the book value of the development assets includes fair value revaluations, which were never paid for using debt. But that is a technical observation to which we can turn a blind eye for now. But the point OCA are trying to make is they are showing they have assets that are worth this much that are either being developed or have been recently completed and are available for sale, and we only have this much debt on them. Fair enough.

So now we understand the numbers on that graph that Aaron was referring to.

FY24:

OCA FY24 presentation page 14 had a graph showing 'development debt' of $534m (Aaron quoted $630m) and 'development assets' of $612m.
Development debt this year is made up of bonds of $225m + the development facility of $309m.
Development assets included land $112m, assets under construction $147m + unsold stock of $353m. These values reconcile to assets under construction.


I suspect what caught them on the hop was the numbers quoted by Aaron were not quite right. But in answering such a question, you never 'guess' as to what the answer is. You defer until you have the numbers in front of you. And you certainly don't verbalise the musing that go in your head when you hear such a question. Notice Brent did handle the subsequent question correctly:



Back to Aaron's first question. What actually happened is 'development debt' increased by $88m but 'development assets' only increased by $12m during the year. This is what Aaron wants to understand - what is this gap of $76m? Notice Aaron thought it might be due to wholesale devaluations of unsold stock which was not the case. And I suspect it has nothing to do with transfers between the Corporate and development facilities given the balance on the Corporate facility remained unchanged (happy to be proved wrong).

This is typical of the sort of question and/or analysis you get when you look at half the picture. An answer eventually came out that there were deferred settlements on some new sales plus other musings. This is what I can see when we look at a few different numbers:

Firstly Accounts Receivable increased from $109m to $125m which would account for *at least* $16m. In the transcript we heard new sales must pay down the development facility. As the AR balance increases, then the development debt facility is not repaid. This $16m is further proved by comparing new sales volumes x average sale prices, to the actual receipts for new ORAs during the period.
This is a surprise to me that OCA are offering care suite ORAs 'on tick' per the urgent needs comment and also the 10% deferred settlements. But it is what it is.
The reason I say 'at least' $16m is because we do not know the split of new sale receivables versus resale receivables. In addition, receivables in excess of 12 months increased by $10m during the year - some of that could also be from sales of new stock.
Also, note that the cost of 'other assets under development' increased in value by $33m.
Lastly, under the 'completed investment property' section in note 3.1 there is $60m of capitalised expenditure that was not transferred from 'investment property under development'. Last year this figure was $5m. I suspect that $60m was also paid for using the development facility but it is not showing up under the 'development assets'. They mentioned the ability to shuffle funds between facilities - maybe this is that.


Adding all this up: $16m in AR + $33m other assets + $60m capitalised directly - $21m reduction in new stock = $88m which more than explains the 'gap' of $76m.

Conclusion: explained / solved. Not an issue.

Kathryn: where shall I send my bill? :)

Good post Ferg, and logically laid out.

But how do we test/verify the various assumptions you have made?

1. Inclusion/exclusion mismatches for specific assets and liabilities.

2. Impact of fair value revaluations on book values.

3..Accounts Receivable increases and deferred settlements affecting development debt.

4. Unaccounted capitalised expenditure and fund shuffling.

[SailorRob]

Thanks to SR for posting the transcript. It sounds like there was a testy exchange with Aaron which started with this question:



It appears as if Aaron caught Brent & Kathryn on the hop, but the numbers can be broken down like this:

FY23:

OCA FY23 presentation page 14 had a graph showing development debt of $446m (Aaron quoted $550m) and 'development assets' of $600m.
Development debt last year was made up of bonds of $225m + the development facility of $221m.
Development assets included land $112m, assets under construction $114m + unsold stock of $374m.


Note that the Corporate facility is excluded from the development debt calculation given that was used to fund the 'as built' acquisitions Remuera Rise & Bream Bay. Also note that 'development assets' includes the book value of 'Investment property under development' per note 3.1 and the book value of the column 'Freehold Land and Buildings Under Development' per note 3.2 plus the valuation of new unsold stock. The numbers reconcile ok.

Two issues I can see straight off with this graph is that I suspect some of the undeveloped land at Bream Bay is included in the assets, but has been excluded from liabilities, so there is a potential mismatch. In addition, the book value of the development assets includes fair value revaluations, which were never paid for using debt. But that is a technical observation to which we can turn a blind eye for now. But the point OCA are trying to make is they are showing they have assets that are worth this much that are either being developed or have been recently completed and are available for sale, and we only have this much debt on them. Fair enough.

So now we understand the numbers on that graph that Aaron was referring to.

FY24:

OCA FY24 presentation page 14 had a graph showing 'development debt' of $534m (Aaron quoted $630m) and 'development assets' of $612m.
Development debt this year is made up of bonds of $225m + the development facility of $309m.
Development assets included land $112m, assets under construction $147m + unsold stock of $353m. These values reconcile to assets under construction.


I suspect what caught them on the hop was the numbers quoted by Aaron were not quite right. But in answering such a question, you never 'guess' as to what the answer is. You defer until you have the numbers in front of you. And you certainly don't verbalise the musing that go in your head when you hear such a question. Notice Brent did handle the subsequent question correctly:



Back to Aaron's first question. What actually happened is 'development debt' increased by $88m but 'development assets' only increased by $12m during the year. This is what Aaron wants to understand - what is this gap of $76m? Notice Aaron thought it might be due to wholesale devaluations of unsold stock which was not the case. And I suspect it has nothing to do with transfers between the Corporate and development facilities given the balance on the Corporate facility remained unchanged (happy to be proved wrong).

This is typical of the sort of question and/or analysis you get when you look at half the picture. An answer eventually came out that there were deferred settlements on some new sales plus other musings. This is what I can see when we look at a few different numbers:

Firstly Accounts Receivable increased from $109m to $125m which would account for *at least* $16m. In the transcript we heard new sales must pay down the development facility. As the AR balance increases, then the development debt facility is not repaid. This $16m is further proved by comparing new sales volumes x average sale prices, to the actual receipts for new ORAs during the period.
This is a surprise to me that OCA are offering care suite ORAs 'on tick' per the urgent needs comment and also the 10% deferred settlements. But it is what it is.
The reason I say 'at least' $16m is because we do not know the split of new sale receivables versus resale receivables. In addition, receivables in excess of 12 months increased by $10m during the year - some of that could also be from sales of new stock.
Also, note that the cost of 'other assets under development' increased in value by $33m.
Lastly, under the 'completed investment property' section in note 3.1 there is $60m of capitalised expenditure that was not transferred from 'investment property under development'. Last year this figure was $5m. I suspect that $60m was also paid for using the development facility but it is not showing up under the 'development assets'. They mentioned the ability to shuffle funds between facilities - maybe this is that.


Adding all this up: $16m in AR + $33m other assets + $60m capitalised directly - $21m reduction in new stock = $88m which more than explains the 'gap' of $76m.

Conclusion: explained / solved. Not an issue.

Kathryn: where shall I send my bill? :)


Excellent post Ferg and I agree with your analysis as well as how they handled it on the call. I also did not recognise the numbers Aaron was highlighting, particularly the development debt. And his line of questioning made it seem like he didn't really understand the accounting. Where was he suggesting the money had disappeared to?


Absolutely the right thing to do is not get into an argument with an analyst or tell them you think their numbers are wrong. Sort it offline and make the answers available to all shareholders.


Now there was another comment you made in your post that I would like to highlight and encourage everyone to think over very carefully as I think it perfectly highlights something that a lot of people are missing.

'the book value of the development assets includes fair value revaluations, which were never paid for using debt'

[SailorRob]

Good post Ferg, and logically laid out.

But how do we test/verify the various assumptions you have made?

1. Inclusion/exclusion mismatches for specific assets and liabilities.

2. Impact of fair value revaluations on book values.

3..Accounts Receivable increases and deferred settlements affecting development debt.

4. Unaccounted capitalised expenditure and fund shuffling.


The best way is to;

Get the Summerset IPO document and read that in its entirety.

Read all of the Summerset Annual reports and pay very particular attention to the notes to the financial statements, study the way the numbers move over the years particularly between the three statements.

Get the Oceania IPO document and study it in its entirety

Read all of the OCA reports and follow the same process as you did with Summerset.

Along the way while you are doing this work, stop often and ponder the economics and the nuances that are outside of the financial statements.

Read the Focused compounding analysis that ValueNZ posted

Study the Sharetrader SUM forum from 2011 through 2014.

Meet up with someone on Ferg or Mav's level of understanding of these businesses and spend a day or two talking it over and getting them to explain anything you don't understand after already having undertaken the work above.

[mistaTea]

The best way is to;

Get the Summerset IPO document and read that in its entirety.

Read all of the Summerset Annual reports and pay very particular attention to the notes to the financial statements, study the way the numbers move over the years particularly between the three statements.

Get the Oceania IPO document and study it in its entirety

Read all of the OCA reports and follow the same process as you did with Summerset.

Along the way while you are doing this work, stop often and ponder the economics and the nuances that are outside of the financial statements.

Read the Focused compounding analysis that ValueNZ posted

Study the Sharetrader SUM forum from 2011 through 2014.

Meet up with someone on Ferg or Mav's level of understanding of these businesses and spend a day or two talking it over and getting them to explain anything you don't understand after already having undertaken the work above.

But Ferg has done all of that and still made a number of assumptions…

[SailorRob]

Below are the Revenue and net profit figures for SummerSet from 2013 through 2023.

The reason I have used SUM is that nobody is challenging the business model like they are with OCA

What you all need to ask yourselves is how can net profit be higher than total revenue for a decade, AND for it to be true and accepted by the market.

These businesses are not easy to understand and the accounting is very complicated, which is forced on them by the rules. The conventional rules are not made for businesses like these.

Some things to think about, the inter relation between the operating business and the development business, the relationship between CAPEX and the cash flow statement and the OPEX and the income statement. Think about how the development margins are displayed and recognised on the income statement.

And finally and most importantly, think about the biggest reward and the very golden Goose - the ORA money is totally invisible on the income statement. You will never see this as profit, only the DMF and even then only as it's recognised/accrued. You will see the benefits of having this money appear over time through the income statement but in a convoluted way.

I will be blunt here, most people on this forum have no business owning this company, the accounting is extremely complex and the model is not easy to understand as we see here every day.


Revenue 45, 54, 68, 86, 100, 137, 154, 172, 202, 237, 270

NPAT. 34, 54, 84, 145, 239, 214, 175, 230, 543, 269, 436.

[SailorRob]

But Ferg has done all of that and still made a number of assumptions…


None of the small assumptions change the bigger picture - that he is comfortable the points raised by Aaron are not material.

[bull....]

Thanks to SR for posting the transcript. It sounds like there was a testy exchange with Aaron which started with this question:



It appears as if Aaron caught Brent & Kathryn on the hop, but the numbers can be broken down like this:

FY23:

OCA FY23 presentation page 14 had a graph showing development debt of $446m (Aaron quoted $550m) and 'development assets' of $600m.
Development debt last year was made up of bonds of $225m + the development facility of $221m.
Development assets included land $112m, assets under construction $114m + unsold stock of $374m.


Note that the Corporate facility is excluded from the development debt calculation given that was used to fund the 'as built' acquisitions Remuera Rise & Bream Bay. Also note that 'development assets' includes the book value of 'Investment property under development' per note 3.1 and the book value of the column 'Freehold Land and Buildings Under Development' per note 3.2 plus the valuation of new unsold stock. The numbers reconcile ok.

Two issues I can see straight off with this graph is that I suspect some of the undeveloped land at Bream Bay is included in the assets, but has been excluded from liabilities, so there is a potential mismatch. In addition, the book value of the development assets includes fair value revaluations, which were never paid for using debt. But that is a technical observation to which we can turn a blind eye for now. But the point OCA are trying to make is they are showing they have assets that are worth this much that are either being developed or have been recently completed and are available for sale, and we only have this much debt on them. Fair enough.

So now we understand the numbers on that graph that Aaron was referring to.

FY24:

OCA FY24 presentation page 14 had a graph showing 'development debt' of $534m (Aaron quoted $630m) and 'development assets' of $612m.
Development debt this year is made up of bonds of $225m + the development facility of $309m.
Development assets included land $112m, assets under construction $147m + unsold stock of $353m. These values reconcile to assets under construction.


I suspect what caught them on the hop was the numbers quoted by Aaron were not quite right. But in answering such a question, you never 'guess' as to what the answer is. You defer until you have the numbers in front of you. And you certainly don't verbalise the musing that go in your head when you hear such a question. Notice Brent did handle the subsequent question correctly:



Back to Aaron's first question. What actually happened is 'development debt' increased by $88m but 'development assets' only increased by $12m during the year. This is what Aaron wants to understand - what is this gap of $76m? Notice Aaron thought it might be due to wholesale devaluations of unsold stock which was not the case. And I suspect it has nothing to do with transfers between the Corporate and development facilities given the balance on the Corporate facility remained unchanged (happy to be proved wrong).

This is typical of the sort of question and/or analysis you get when you look at half the picture. An answer eventually came out that there were deferred settlements on some new sales plus other musings. This is what I can see when we look at a few different numbers:

Firstly Accounts Receivable increased from $109m to $125m which would account for *at least* $16m. In the transcript we heard new sales must pay down the development facility. As the AR balance increases, then the development debt facility is not repaid. This $16m is further proved by comparing new sales volumes x average sale prices, to the actual receipts for new ORAs during the period.
This is a surprise to me that OCA are offering care suite ORAs 'on tick' per the urgent needs comment and also the 10% deferred settlements. But it is what it is.
The reason I say 'at least' $16m is because we do not know the split of new sale receivables versus resale receivables. In addition, receivables in excess of 12 months increased by $10m during the year - some of that could also be from sales of new stock.
Also, note that the cost of 'other assets under development' increased in value by $33m.
Lastly, under the 'completed investment property' section in note 3.1 there is $60m of capitalised expenditure that was not transferred from 'investment property under development'. Last year this figure was $5m. I suspect that $60m was also paid for using the development facility but it is not showing up under the 'development assets'. They mentioned the ability to shuffle funds between facilities - maybe this is that.


Adding all this up: $16m in AR + $33m other assets + $60m capitalised directly - $21m reduction in new stock = $88m which more than explains the 'gap' of $76m.

Conclusion: explained / solved. Not an issue.

Kathryn: where shall I send my bill? :)

i dont think arron got it wrong
is it not pg 15. 612m of development assets and pg 16 net debt of 637m what aroon is talking about? the development assets dont cover the increase in debt

[winner69]

Hi Winner,

As per the red txt, can you point me to where they highlight total comprehensive income? I thought they highlight 'Underlying earnings' which is a totally different thing.

Thanks in advance.

SR

Even the other day in the results release it was put first -

Total Comprehensive Income of $70.5m and Net Profit after Tax of $31.5m for the year ended 31 March 2024 were 104.3% and 104.5% higher than the prior corresponding period of $34.5m and $15.4m respectively.

And they have at times educated punters as to what it means like in that graphic I posted yesterday

Usually a bigger number than NPAT so why not skite about it.

Yes they do Underlying Earnings as well but you get the feeling they prefer Underlying EBITDA more

It’s the Oceania way of doing things …put out heaps of metrics ..helps the obfuscating

[kiwical]

I will be blunt here, most people on this forum have no business owning this company, the accounting is extremely complex and the model is not easy to understand as we see here every day.


I don't get this statement. I have investments in many companies I don't fully understand. Personally I don't think it's necessary to have a nuts and bolt deep understanding of every nuance of a business. If that were true I doubt anyone would invest in anything. My main reason for buying OCA is the ageing population. Simple as that for me!

[Bikeguy]

“My main reason for buying OCA is the ageing population. Simple as that for me![/QUOTE]”

Seems like a pretty fair opinion to me, no one escapes this (aging) and it’s a fundamental driver of these businesses

[Ferg]

None of the small assumptions change the bigger picture - that he is comfortable the points raised by Aaron are not material.

That is correct.

Given the convoluted nature of the accounts I set aside some time once a year to fully reconcile the OCA accounts so that I know what is going on. I did that last night. I start with the Opening values on the Balance Sheet and then process every debit and credit for every line (plus some more) by processing the values from the P&L, the cash flow, various notes and the presentation. This allows me to 'prove' the closing values on the Balance Sheet. It's no small task hence my closing quip to Kathryn. I do it to see what has been going on behind the scenes and if there are any accounting 'funnies' that concern me.

Addressing mistaTea's question these statements are not assumptions: $60m capex coded directly to investment property which is not a 'development asset', $33m capex on dev assets and negative $21m reduction in new stock. These 3 alone add to $72m, versus $76m to be explained. The last 2 items are known to directly impact dev debt per statements made by OCA. If someone wants to prove how the other $60m capex was funded then I'm all ears but it is a very safe assumption this was funded by dev debt if you analyse the numbers. As an aside (and the BS / sniff test), it is business 101 to use long term debt to fund long term assets so it makes sense. Based on the flow of debits and credits, and the requirement for new sales to repay dev debt, the last $4m must be sitting in accounts receivable, although I suspect the actual value is higher given other factors. And if it's not that then it's not material to answering the question.

I often see people jump to conclusions (online and in the real world) and assume something is incorrect based on their not understanding something. I hope the professional analysts are not starting from that position. It's a shame OCA couldn't answer it succinctly because it is not a good look - but it wasn't helped by Aaron quoting the wrong numbers. But OCA did not help by departing from the historic norm and using dev debt for non dev assets and not explaining that clearly enough.

[Ferg]

i dont think arron got it wrong
is it not pg 15. 612m of development assets and pg 16 net debt of 637m what aroon is talking about? the development assets dont cover the increase in debt

'Development assets' is a specific measure used by OCA per the reason I outlined. To compare just the movement in that to the movement in total or nett debt is only looking at half the picture. If you follow the numbers I posted and the references, you will see the $60m of capex coded directly to investment property was (inadvertently) omitted by Aaron. So whilst he might not be 'wrong' with the numbers he quoted, he was 'wrong' with the comparison he tried to make.

[Balance]

“My main reason for buying OCA is the ageing population. Simple as that for me!”

Seems like a pretty fair opinion to me, no one escapes this (aging) and it’s a fundamental driver of these businesses[/QUOTE]

Fair opinion indeed but it's the equivalent of saying that everyone has to eat and that's a good reason to invest in growing food?