ARV - Arvida Retirement Villages

[percy]

No surprise these guys have been buying.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARV/407154/389133.pdf

[winner69]

No surprise these guys have been buying.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARV/407154/389133.pdf

Wonder what they paid for the other 32 million shares over the years

[percy]

Wonder what they paid for the other 32 million shares over the years

A wonder what they will be worth in a couple of years...?

[ronaldson]

Indeed. However the last/most recent 4m+ have been purchased at an average of around $1.16 per share according to the SPH Notice. That's somewhat reassuring for existing holders, as I have always regarded the ACC investment team as among the best local operators.

On the other hand the market has fallen sharply over the months that ACC has been accumulating, in spite of their cumulative acquisitions, which is not so positive.

What do folk make of MET's result announced this morning, in context?

[winner69]

Indeed. However the last/most recent 4m+ have been purchased at an average of around $1.16 per share according to the SPH Notice. That's somewhat reassuring for existing holders, as I have always regarded the ACC investment team as among the best local operators.

On the other hand the market has fallen sharply over the months that ACC has been accumulating, in spite of their cumulative acquisitions, which is not so positive.

What do folk make of MET's result announced this morning, in context?

I wonder if there’s any NZX stock ACC haven’t got …probably got a few of everything

Got to keep buying as the levies keep rolling in ….just went over the 5% so wouldn’t say there was real conviction in owning ARV

NZX doesn’t seem to have coal miners, tobacco or munitions stocks so they safe there

[winner69]

At least ARV share price didn’t close under a buck ….that would have been an embarrassment

[X-men]

It is stuffed....gone...

[Muse]

Hope not.

Just bought my second ever tranche in this today for a dollar.

Wake me up in 10 years.

[justakiwi]

As my kids would say .... dramatic much! :rolleyes:


It is stuffed....gone...

[X-men]

If u bought 8 years ago...u are not making any money...your money is depreciated....the share price same 8 years ago

[justakiwi]

I don't hold ARV, but they have paid dividends for at least the last five years. Unless you plan on selling, the current share price is not particularly relevant. Your investment has returned you dividend income, which has more than likely provided a better return than a bank deposit would have.

Your argument is only valid if you are a trader, rather than a long term investor, and in actual fact, probably not even then.


If u bought 8 years ago...u are not making any money...your money is depreciated....the share price same 8 years ago

[troyvdh]

justakiwi..Many thanks for that post.
Sadly I believe that the opinion that X-men is a perfect example of NZ Inc typical opinion of the share market.
Investment...to people like him....kinda requires immediate returns ....I could go on here.

[X-men]

Your initial investment needs to appreciate too plus a return...that u can call it an investment

[justakiwi]

Actually no it doesn’t. A standard bank account is an “investment.” You earn interest on your deposit, but that’s all. Your original deposit doesn’t grow/appreciate in value. It actually does the opposite. Investing in shares is a little different. Some companies are great for dividend income, but the share price doesn’t increase much over time. Other companies pay no dividends but the share price appreciates significantly. Some, do a bit of both.

Over the long term, most share prices will increase to some extent, but right now, global and domestic events/influences, are seriously effecting share prices. KFL, for example - I am well and truly in the “red” in terms of capital gain right now but the dividends I have been paid since I first bought in, plus the very lucrative historical warrants issues, make my overall, long term return very positive. You have to look at both capital and income return. Having said that, if you hold a company that pays no dividends, then yes, right now your initial investment may well have depreciated. But as I keep having to point out, unless you are buying penny stocks or spec stocks, it’s temporary.

I also look at it from the point of view that my investing has motivated me to save significantly more money than I would have, before I started investing. I’ve saved around $25000 in the last four years, on a low income. I would never have achieved that had I been saving in the bank - at deposit interest rates over that time, there was zero real motivation to save. Slightly more right now with better rates, but that won’t last forever.

I think you need to do some reading up on the overall subject and modify your beliefs, because they have the potential to influence your decision making - which could have a detrimental impact on your investments.


Your initial investment needs to appreciate too plus a return...that u can call it an investment

[Aaron]

Highlights the need for a decent dividend.

How will Arvida pay a dividend out of downward revaluations in property prices and a slower building program with reduced margins on new builds?

Looking at operating cashflow in the 2022 accounts they include the full sale proceeds of units as well as the full redemption so over a number of years the difference will be the management fee. I would have thought splitting the unit holders portion out and putting this through the financing portion of the cashflow statement would make more sense as during the years they are building and selling lots of units, operating cashflow gets overstated and if building slows down and in years more units are sold operating cashflow will be understated, although as I write this I realise they can hold onto the unit and pay nothing out, until another buyer is found.

Sorry these ideas only occur to me as I write them down and think a step further.

[Ferg]

Looking at operating cashflow in the 2022 accounts they include the full sale proceeds of units as well as the full redemption so over a number of years the difference will be the management fee. I would have thought splitting the unit holders portion out and putting this through the financing portion of the cashflow statement would make more sense as during the years they are building and selling lots of units, operating cashflow gets overstated and if building slows down and in years more units are sold operating cashflow will be understated.

An interesting thought about the cash flow treatment of the ORAs and I agree. IMO it should be split between operating and financing for the ORA payments made to outgoing residents. The financing part of the CF should be the initial ORA receipts less the gross ORA payments. The difference between gross and nett ORA payments (which is retained management fees and expense reimbursements) should go through the operating part of the cash flow given those funds are used to pay for operating expenses.

For example: incoming resident pays $1m. Previous resident paid $800k, but the RV keeps say $250k out of the $800k and repays $550k to the outgoing resident's estate.

Cashflow would show:

operating cash flows: DMF received/realised +$250k
financing cash flows: ORA receipts $+1m
financing cash flows: ORA payments -$800k
Nett cash flow = +$450k


As opposed to showing:

ORA receipts +$1m
ORA payments -$550k
Nett cash flow +$450k


By providing greater transparency we can then see if dividends are being funded from realised or unrealised DMF and/or if they are being funded from operating cash flows or financing cash flows. Two very different things, although dividends funded from financing cashflows could be from the unrealised portions of DMF rather than loans. The unrealised DMF will eventually end up in the P&L of the RV, but jut not right now. We could probably back solve this for each RV.

But asking for more transparency might be asking too much of the industry.....

[Aaron]

Thanks for replying Ferg. No difference in cashflows overall admittedly.

My only thought was while they are building and selling new units Operating cashflow looks even better than your example as the units are brand new with no ORA to be refunded when the new unit is sold. The ORA receipts are showing as operating earnings whereas it is more in the nature of interest free finance.

I am sure the auditor would have noted this if they felt the accounts did not provide a "true & fair view". Thats what they get paid for.

Even in your example Operating Cashflow is higher but I suppose in your example the $200k capital gain in property value is a realised capital gain and therefore profit of the business, even if it is not taxable. So maybe that is the best way to present it. But with the cancellation or slowing down of building new units the operating cashflow is likely to take a big hit over the next few years unless we get a pivot on interest rates.

Using your example except incoming resident pays $1mill for a brand new unit;

Operating Cashflow = $1,000,000

Or

Using your example I think the mgmt fee works out at 31.25% (250/800)

Operating cashflow = $312,500
Financing cashflow = $687,500

$1mill operating cashflow or $312,500 it is all in the presentation.

I imagine if building stops and property prices fall the presentation could change in future years. Bring on the pivot.

[Ferg]

Hello Aaron

You raise some good points about new builds.

The trouble with splitting out the $1m receipt as you have is that the RV doesn't not know how long the client will be in residence. The deduction could be anything from 10% to 40% depending on length of tenure, and what has been put on account. Whereas with the outgoing resident, this figure is known given it is deducted from the payout.

[Aaron]

Thanks, I did not fully understand how the management fee is charged when posting.

Makes sense to up the fee if they reside longer. I was worrying that if a resident lived 20 years then a 30% fee in simple terms is only 1.5% per year. Not a good yield on a rental.

Better do some more study.

[BlackPeter]

Thanks, I did not fully understand how the management fee is charged when posting.

Makes sense to up the fee if they reside longer. I was worrying that if a resident lived 20 years then a 30% fee in simple terms is only 1.5% per year. Not a good yield on a rental.

Better do some more study.

Obviously - DMF is not the only fee they get, but you are right - if residents live above average age, they get a better deal. Life is not fair :p ;

On the other hand ... life insurance companies do live with this issue (the uncertainty about the duration of an individual life) quite well ... and the underlying maths and stats is well established.

I don't think we need to be worried about retirement villages loosing out this way ... unless all their clients find at the same time the holy grail of eternal life (or is it the philosophers stone?) ...

[ronaldson]

I don't see you could charge more than 30% DMF even over an extended timeframe, and some providers are at 20%. Property price gains are almost a given over the "normal" occupation timeframe so the asset is always earning.

But it has become fashionable to advertise that the weekly fee is fixed and will not be increased. With inflation I think it is that commitment that can be more detrimental to providers if longevity kicks in.

However it is a competitive industry to a greater extent than most, which offers a lot of choice in terms of nature of accommodation, available amenities, location, standard of care, weekly fee and so on, and occupancy is the critical factor. Everyone weighs up the quality of the offer before making their entry decision so providers are driven to be as attractive as possible.

[Muse]

Monster volume today at close.

Suspect it's to do with Jarden's sector research from this week.

In fact looks like the largest daily volume post float.

[winner69]

Monster volume today at close.

Suspect it's to do with Jarden's sector research from this week.

In fact looks like the largest daily volume post float.

Yep 25 million at days end

Might be something to do with that ‘adjust’ session they said was today …what ever that means

But $1.00 doesn’t look too bright does it …be $1.05 again on Monday

[percy]

Monster volume today at close.

Suspect it's to do with Jarden's sector research from this week.

In fact looks like the largest daily volume post float.

Looks as though one seller sold in 3 parcels a total of 24,129,251 shares.
According to NZ Companies Office it must be one of the following major holders.

Shareholders in Allocation:
Allocation 1:120998625 shares (16.80%)

FORSYTH BARR CUSTODIANS LIMITED
Forsyth Barr Limited, 35 The Octagon, Dunedin Central, Dunedin, 9016 , New Zealand
Allocation 2:46928799 shares (6.52%)

NATIONAL NOMINEES LIMITED
80 Queen Street, Level 4, Auckland Central, Auckland, 1010 , New Zealand
Allocation 3:40445761 shares (5.62%)

GENERATE KIWISAVER PUBLIC TRUST NOMINEE LIMITED
Level 16, Sap Tower, 151 Queen Street, Auckland, 1010 , New Zealand
Allocation 4:33642449 shares (4.67%)

Accident Compensation Corporation
19 Aitken Street, Thorndon, Wellington, 6011 , New Zealand
Allocation 5:30762600 shares (4.27%)

[Greekwatchdog]

Trading was extended to meet the quarterly rebalancing of the NZX and FTSE Russell Indices, with Arvida Group, Serko, Tourism Holdings and Vista Group falling out of the FTSE Small Cap Index, and Channel Infrastructure entering the NZX 50 in place of Restaurant Brands.

[winner69]

Yep 25 million at days end

Might be something to do with that ‘adjust’ session they said was today …what ever that means

But $1.00 doesn’t look too bright does it …be $1.05 again on Monday

Prob ACC …they know when to cut their losses ….just making that up :)

More likely consolidated orders from many fundies

[Greekwatchdog]

Prob ACC …they know when to cut their losses ….just making that up :)

For you W69. Trading was extended to meet the quarterly rebalancing of the NZX and FTSE Russell Indices, with Arvida Group, Serko, Tourism Holdings and Vista Group falling out of the FTSE Small Cap Index, and Channel Infrastructure entering the NZX 50 in place of Restaurant Brands.

[percy]

I would guess some one bought these.?

[troyvdh]

What's going on.....insider information perhaps...like debate on ST indicates ARV represents value ...more so than some others...I smell something fishy....sad.

[Greekwatchdog]

What's going on.....insider information perhaps...like debate on ST indicates ARV represents value ...more so than some others...I smell something fishy....sad.

Trading was extended to meet the quarterly rebalancing of the NZX and FTSE Russell Indices, with Arvida Group, Serko, Tourism Holdings and Vista Group falling out of the FTSE Small Cap Index, and Channel Infrastructure entering the NZX 50 in place of Restaurant Brands.

[Muse]

Trading was extended to meet the quarterly rebalancing of the NZX and FTSE Russell Indices, with Arvida Group, Serko, Tourism Holdings and Vista Group falling out of the FTSE Small Cap Index, and Channel Infrastructure entering the NZX 50 in place of Restaurant Brands.

Yes - but did any if those have an all time high daily volume?

But at any rate - two sides to a coin - and means someone(s) saw value to make a very large purchase. Would imagine the block would have been priced at some discount to trailing VWAP (or perhaps $1 just seemed like a nice most round of numbers lol)

[nztx]

Prob ACC …they know when to cut their losses ….just making that up :)

More likely consolidated orders from many fundies


did they get indigestion over some of the others in the sector ? :)

[bull....]

broke the $1 support :scared: might be trying to catch up to oca ?

[troyvdh]

95 cents !

[X-men]

Gone.... bankrupt!!! Sell!

[justakiwi]

You said the same thing in different words, a few weeks ago. Wasn't true then. Isn't true now.


Gone.... bankrupt!!! Sell!

[troyvdh]

X ..why did you post that....Is that your humour or what.

TBH....I also am guilty of posting ...quite distasteful quips...but at least I admit it...

[bull....]

arv wants to catch up to oca , the force binds everything together

[nztx]

Jeeze .. what did I miss here .. any forecasts on where the bottom may lay ? :)

[bull....]

Jeeze .. what did I miss here .. any forecasts on where the bottom may lay ? :)

ultimate lowest bottom it could go is zero cents

[bull....]

anyway i think the company should tell us if they use kumera or not ? might give us a indication of costs

[justakiwi]

Corrected it for you.

anyway i think the company should tell us if they use Kūmara not ? might give us a indication of costs

[troyvdh]

I understand that where Kumara is harvested the most has been decimated...

[nztx]

I understand that where Kumara is harvested the most has been decimated...


but how are ARV's kumara's doing ?

Are there many planted out the back ? :)

[Charlie]

ACC and FB buying in .
correct me if Im wrong .
Seems ACC paid $1.17 a share av ?
Purchases of 4,148,368 shares for consideration of NZD $4,831,196.40.

[winner69]

Maybe an Investor News will come out next week

Once market sees they are going well with increased sales and margins share price will recover a lot of recent losses

It was about $1.25 was announced …..financials probably better state now so could get back to that level pretty quickly.

[Greekwatchdog]

Maybe an Investor News will come out next week

Once market sees they are going well with increased sales and margins share price will recover a lot of recent losses

It was about $1.25 was announced …..financials probably better state now so could get back to that level pretty quickly.

I don't know W69. SUM result hasn't done much for their share price and I thought that was pretty good considering head winds and SUM's commentary was positive. Its been nice adding under a $1.


Like you say we must be due a Investor Update. What is it? Heads you win, tails you win?

[BlackPeter]

I don't know W69. SUM result hasn't done much for their share price and I thought that was pretty good considering head winds and SUM's commentary was positive. Its been nice adding under a $1.


Like you say we must be due a Investor Update. What is it? Heads you win, tails you win?

Makes sense.
SUM has been treated pretty lenient by the market in the recent property downturn and is therefore still pretty much fully priced. Market just priced this good news already in.

ARV (and RYM, OCA) however have been relentlessly down ramped (as well in this forum). For sure - if they come out with good news this will be a surprise for the market and the reaction should be accordingly.

Assuming my html exercise below works, the following table should demonstrate that SUM's SP is much closer to NTA than the other three contenders, and SUM's PE (while still good) is the dearest of the four. Why should investors pick this one over the others?




SUM
ARV
OCA
RYM


SP
$8.68
$0.94
$0.75
$5.45


forw PE
8.6
4.8
7.7
6.1


forw CAGR
2.1
1.6
3.9
4.6


SP/NTA
0.92
0.49
0.56
0.76

[winner69]

BP isn’t it a shame that things aren’t always equal in the world ….like everything trades at same multiples

The relativities you show could be just a reflection of how the multitudes see each of them from a prospects / risk / management ability etc etc perspective

Like SUM seen as much better than ARV and ‘prices’ it accordingly

All subjective though eh …can’t please everybody

[BlackPeter]

BP isn’t it a shame that things aren’t always equal in the world ….like everything trades at same multiples

The relativities you show could be just a reflection of how the multitudes see each of them from a prospects / risk / management ability etc etc perspective

Like SUM seen as much better than ARV and ‘prices’ it accordingly

All subjective though eh …can’t please everybody

Sure ... if everybody would have the same viewpoint and the same method to value things we would not have a market. Market works only if somebody wants to buy (which means they think the thing is good value) and somebody wants to sell at the same price (which often means they think it is too dear).

However - we know that market has a tendency to change their views (just look at both SUM and RYM history) - and often it might be sufficient to trigger this change if somebody starts barking up another tree ... though, admittedly - you could argue that somebody starts barking up another tree when the market changes its view. Chicken - egg?

Anyway - nobody can predict the future, but I find it helpful to use some tangible values instead of just relying on the ups and downs of human moods (i.e. hype trend) to measure for my benefit whether a stock is over-, under- or fairly valued. Each to their own.

[Entrep]

SUM has better properties and lower gearing AFAIK

[Greekwatchdog]

Announcement

Arvida Group Limited (NZX:ARV) advises that an extension to its current bank debt facility was executed yesterday. The bank facility limit has been increased by $100 million to $675 million and ASB has been introduced to the syndicated facility alongside ANZ and BNZ. The additional $100 million has a 3.5 year tenure.
In addition, an amendment to the interest coverage ratio (ICR) has been approved by the syndicate members. The ICR is amended to 1.75x for the next four financial reporting periods to and including 30 September 2024 and is calculated based on an adjusted EBITDA with all interest cost included. All development gains are now included in the calculation. All other material terms and conditions remain unchanged.
As at 31 March 2023, $500 million of bank facilities were drawn.
Total facilities (inclusive of $125 million of retail bonds) are $800 million. Interest rate hedging of $220 million is in place at a weighted average interest rate of 2.8% (excluding margin and line fees).

[BlackPeter]

SUM has better properties and lower gearing AFAIK

Better properties? Obviously depends on what you mean. They might have more upmarket properties (though, if you are only looking at the new stuff, I am not sure), but whether they are better in terms of value/cost, this I don't know.

Lower gearing - Are you sure? In my spreadsheet they are sort of rubbing shoulders - both slightly above 60% liabilities / assets. But of course - there are a million different ways to measure that. Long live the diversity!

[Greekwatchdog]

Investor news update

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARV/409551/392164.pdf

[ronaldson]

Worth a careful read.

Interesting that 298 ORAs settled in the second half year, with March the best month on record for new and resale gains. But the 215 units constructed/delivered is below the target of 250 which in turn appears to understate earlier assertions I drew attention to on this thread previously that the expectation was actually 270. And the CEO purposefully draws attention to the ongoing pivot, whereby the proportion of needs-based accommodation upon listing in 2014 was 79% and has now reduced to just 43% and will further reduce due to government underfunding and staffing difficulties/increasing costs. This seems to be common to all the listed operators, a real canary for Government to take note.

On another note, although comprehensively insured, flooding has damaged 39 of 99 villas at Parklane in Auckland as well as the ground floor of the serviced apartment building and the Community Centre, so major damage yet to be remediated. Very unfortunate, given retirement complexes throughout NZ otherwise proved remarkably resilient to the recent weather events.

[winner69]

Worth a careful read.

Interesting that 298 ORAs settled in the second half year, with March the best month on record for new and resale gains. But the 215 units constructed/delivered is below the target of 250 which in turn appears to understate earlier assertions I drew attention to on this thread previously that the expectation was actually 270. And the CEO purposefully draws attention to the ongoing pivot, whereby the proportion of needs-based accommodation upon listing in 2014 was 79% and has now reduced to just 43% and will further reduce due to government underfunding and staffing difficulties/increasing costs. This seems to be common to all the listed operators, a real canary for Government to take note.

On another note, although comprehensively insured, flooding has damaged 39 of 99 villas at Parklane in Auckland as well as the ground floor of the serviced apartment building and the Community Centre, so major damage yet to be remediated. Very unfortunate, given retirement complexes throughout NZ otherwise proved remarkably resilient to the recent weather events.

Yep a few not so good numbers in that update

New sales down heaps is one

[BlackPeter]

Yep a few not so good numbers in that update

New sales down heaps is one

New sales down is not good (though it doesn't look that dramatic either, if you annualize the numbers - doesn't it?), however - resale margins and gains on sales seem to be the best ever. All on page 5 of the pamphlet.

This is good :):

[Onemootpoint]

New sales down is not good (though it doesn't look that dramatic either, if you annualize the numbers - doesn't it?), however - resale margins and gains on sales seem to be the best ever. All on page 5 of the pamphlet.

This is good :):

I seem to agree :) It is better than expected given the headwinds in the property sector. It has to turn at some point; when is the question.

[Baa_Baa]

The Arvida results, which I think are very encouraging given the macro circumstances, and to a similar extent RYM and SUM, imo are illustrating the resilience in the sector, despite headwinds, and how the RV company's can and do pivot to respond.

There's no way any of these are going out of business and all of them are priced at massive discounts to NTA/NAV, which long term value investors will be very interested in. Again imo, it's not about picking the absolute lowest entry or accumulation price anymore.

The so called 'forward looking' market will pick up on these extreme discounts and realise the long term value on offer. They are also looking increasingly attractive to momentum traders looking for capital gains as well, though they might want a bit more confirmation that the current discounts aren't going to go deeper.

Personally I've moved from picking a sector winner to owning a share of the whole sector, balanced of course. A share of all of them seems to me to be a prudent long term investment that I can rebalance as time goes by, but at this moment in time picking winners seems a pointless exercise. Just buying steep unsustainable discounts to NTA/NAV seems the right thing to do.

[Greekwatchdog]

For Bars update. Outperfrom Target $1.75

Arvida Group's (ARV) 4Q investor update gave us three main takeaways; (1) demand remains strong with the number of resales largely flat versus 2H22 (albeit we acknowledge two extra months of Arena Living), with both margins and price coming in ahead of our expectations and up versus last year. This bodes well for the sector overall and needs to be viewed against a backdrop of record low housing turnover. (2) New sales were weaker than anticipated with substantially fewer unit sales at lower margins but at higher prices; we believe the miss relative to our expectations relates to fewer care suites sold and a large proportion of deliveries weighted towards the very end of the financial year. (3) ARV is slowing down development. ARV delivered 215 units in FY23, below our 270 unit forecast and its 250 unit guidance as the delivery of 57 apartments in Aria Bay has been pushed to June 2023. More significantly, ARV guided to a similar delivery number in FY24, including Aria Bay. This suggests a material slowdown in build run-rate in FY24. We think this is the right thing to do and will look for more details on the implications for capex and free cash flow at the FY23 result.

What's changed?


Earnings: FY23/FY24/FY25 underlying profit +2%/0%/-1%. Annuity EBITDA +6%/-1%/-2%.
Target price: Decreased to NZ$1.75 (from NZ$1.80).


Prudent development management
ARV will complete 215 units in FY23, below its 250 target and our forecast of 270 units. The -55 deviation relative to our expectations reflects delays experienced at its 57 apartment Aria Bay apartment development (Browns Bay in Auckland). This is now expected to be completed in June 2023 (1H24). ARV moderated its FY24 build rate expectations to be "equivalent" to FY23. This will comprise of the 57 Aria Bay apartments, with the remainder being villas. With rising debt levels (and investor scrutiny), we view ARV's tempering of its build rate profile as prudent to manage forward debt levels. We lower our FY24 and FY25 net debt estimates by -2% and -4% respectively, reflecting lower capex.

[ronaldson]

I believe this share traded at 93c at market close on 31 March 2023 and is now fairly solid at 105c which is a good recovery, in % terms anyway.

Looking forward to the results announcement on 30 May, which along with RYM later this week and OCA next week will give a decent overview how the sector is really going.

[bull....]

looks like a head and shoulders bottom on the daily chart

[ronaldson]

I believe this share traded at 93c at market close on 31 March 2023 and is now fairly solid at 105c which is a good recovery, in % terms anyway.

Looking forward to the results announcement on 30 May, which along with RYM later this week and OCA next week will give a decent overview how the sector is really going.


Two trading days on and buyers at 112c sellers 113c. This is a big reversal of sentiment in 7 weeks!

[Sideshow Bob]

https://www.nzx.com/announcements/412221

Highlights:
• Underlying profit[1] of $88.0 million, up 20%
• Total sales of $376.4 million, up 16%
• 215 new units delivered
• Gearing at 30.5%
• NTA at $1.90 per share
• Final dividend of 2.35 cents per share

[percy]

https://www.nzx.com/announcements/412221

Highlights:
• Underlying profit[1] of $88.0 million, up 20%
• Total sales of $376.4 million, up 16%
• 215 new units delivered
• Gearing at 30.5%
• NTA at $1.90 per share
• Final dividend of 2.35 cents per share

Crikey that looks good.

[X-men]

Gearing at 30%....lowest in the sector and better than other property stocks

[Greekwatchdog]

Thats an outstanding result in a brutal environment and was a steal in the $0.90's. Management are clearly working hard and shareholders should be full of confidence going forward.

[Rawz]

face value that looks like a great result and well managed balance sheet by the looks of it

[Habits]

Thats an outstanding result in a brutal environment and was a steal in the $0.90's. Management are clearly working hard and shareholders should be full of confidence going forward.

Low of 91 cents compared to NTA more than twice

Picked some up recently

[trader_jackson]

Absolutely stunning result given the times - underlying profit per share up 27% and net implied value up 24% in the past 2 years and NTA at $1.90 yet share price isn't really much above $1 despite strong growth on all fronts... dividend hasn't been massively cut like others are having to do either.

[Rawz]

Absolutely stunning result given the times - underlying profit per share up 27% and net implied value up 24% in the past 2 years and NTA at $1.90 yet share price isn't really much above $1 despite strong growth on all fronts... dividend hasn't been massively cut like others are having to do either.

You have been saying this is cheap and a huge buy for awhile now.. nice work

[ronaldson]

Share price up 30% since 1 April.

Can't argue with that.

And I thought the results announcement was better than the market initially gave credit. So maybe a bit still to prove?

[whatsup]

Share price up 30% since 1 April.

Can't argue with that.

And I thought the results announcement was better than the market initially gave credit. So maybe a bit still to prove?

When is their next report due ?

[X-men]

November 2023

[WAIKEN]

There has been some very strong buying days in Arvida in the past quarter especially on 30 June
Are they perhaps a takeover target?

[X-men]

All companies on the nzx will be taken over....will be no more listed companies...lol


It was end of month....fundies are rebalancing thier portfolio

[kiora]

There has been some very strong buying days in Arvida in the past quarter especially on 30 June
Are they perhaps a takeover target?

Try this
Under "ETFs positioned on Arvida Group Limited" at bottom of page

https://www.marketscreener.com/quote/stock/ARVIDA-GROUP-LIMITED-20708484/

[justakiwi]

For anyone who is interested:

Arvida is included.

https://mailchi.mp/nzx.com/virtual-investor-event-19jul23?e=a16d6df77c (https://mailchi.mp/nzx.com/virtual-investor-event-19jul23?e=a16d6df77c)

[Greekwatchdog]

For anyone who is interested:

Arvida is included.

https://mailchi.mp/nzx.com/virtual-investor-event-19jul23?e=a16d6df77c (https://mailchi.mp/nzx.com/virtual-investor-event-19jul23?e=a16d6df77c)

Thanks JAK.

[Greekwatchdog]

So annual meeting this arvo. Looking forward to some update on how things are going and how the market is looking.

[winner69]

So annual meeting this arvo. Looking forward to some update on how things are going and how the market is looking.


Doesn’t seem to be online either

And 3.30 on a Friday

Seems they want to avoid shareholders

[thegreatestben]

Or they're anticipating heading to the pub to celebrate?

[ronaldson]

Well, I'm sure at least the presentation and the usual Chair and CEO addresses will be released to NZX this afternoon at some point. Just keep watching.

With the meeting in Christchurch anyway my attendance has definitely been "avoided", but it's my habit to proxy to NZSA. So it's only Q & A participation that's missing.

[thegreatestben]

I don't really have time to read the ARV material so I got AI to do a SWOT based on the presentation from today.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARV/415087/398918.pdf

Strengths:
- Increasing care funding rates
- Investment in employee brand and career development
- High retention rate of 70%
- Focus on capital discipline and cash management
- Proactive strategy for resilient growth


Weaknesses:
- Capital market sentiment overhangs total shareholder returns
- Gender pay gap of 0.5%
- Shortages in care workforce


Opportunities:
- Lower reported Covid infection rates positive for continued normalisation of care occupancy
- Focus on supporting teams with career development
- Intensive/brownfield builds phased, preference to higher value sites
- Conversion of care beds/serviced apartments to premiumise


Threats:
- Challenges in the economy and property market
- Pending regulatory reviews and sector focus
- Casual workforce has increased in the current environment
- Sales momentum

[ronaldson]

You/AI missed the bit in the Chairman's Report as follows:-

" However, in balancing the payment of dividends against the capital requirements of the Company, including the requirement to fund the growth of our portfolio, the Board has adopted a lower distribution range of 30% to 50% of full year underlying profit going forward. Dividends are expected to be at the bottom end of this revised range until operating conditions improve and business cashflows mature. "

[winner69]

You/AI missed the bit in the Chairman's Report as follows:-

" However, in balancing the payment of dividends against the capital requirements of the Company, including the requirement to fund the growth of our portfolio, the Board has adopted a lower distribution range of 30% to 50% of full year underlying profit going forward. Dividends are expected to be at the bottom end of this revised range until operating conditions improve and business cashflows mature. "

They said that at full year …except the for FY24 has extended to ‘going forward etc’

[winner69]

Don’t know what words went with this ASM presentation slide but not really that inspiring…esp if they were trying to impress.

[Baa_Baa]

Don’t know what words went with this ASM presentation slide but not really that inspiring…esp if they were trying to impress.

Maybe they picked a time period that shows ARV:NZX at least parity, whereas if they'd chosen the whole dataset, it doesn't look good at all https://invst.ly/10r4w6

[winner69]

Maybe they picked a time period that shows ARV:NZX at least parity, whereas if they'd chosen the whole dataset, it doesn't look good at all https://invst.ly/10r4w6

Be good times as it catches up again

[Baa_Baa]

Be good times as it catches up again

Possibly, though I'd expected a reply that the comparison of ARV SP to NZX50 is not valid, as one doesn't include dividend returns and the other does. A comparison against the NZX50 Capital index (dividends excluded). Crazy how volatile these RV's SP are. https://invst.ly/10r51e

[percy]

Reading through the AGM notes I am very impressed at how well Directors/Management have managed the business.
Plenty of issues,Covid,sector staffing shortages,the property market slow down,rising costs of wages and construction,all safely navigated.
Their low gearing together with the lower build rate means the business is well placed to concentrate on operational cash flow.
"Over time we would expect to see a significant uplift in resale gains and the realisation of deferred
management fees, along with increases in care and village fees. This will improve the cash flow
performance of our operations. "

[Snow Leopard]

Don’t know what words went with this ASM presentation slide but not really that inspiring…esp if they were trying to impress.

What it shows is that generally ARV outperforms the NZ50G and after a minor period of underperformance the good times are coming back.

Celebrations with Tui's for everyone. :)

[bottomfeeder]

What it shows is that generally ARV outperforms the NZ50G and after a minor period of underperformance the good times are coming back.

Celebrations with Tui's for everyone. :)

Something very positive coming from the retirement sector.

[troyvdh]

My mother resides in a Arvida home in CHCH.The manger there often works various shifts including weekends.I also know two managers of other Arvida homes (ex nurses like me).The attitude and dedication to their work is something Ive seldom seen in any institution.The same goes for all the staff I have meet.
Disc.Hold ARV.

[winner69]

Many days lately ARV share price looks weak in the morning and even seems to be heading to 120 or below

How like a little warrior it resolutely fights back and hangs around the 125/126 mark

Good sign punters are supporting them

[Dlownz]

https://www.nzherald.co.nz/hawkes-bay-today/news/havelock-north-aged-care-units-sudden-closure-announcement-shocks-residents-families/VUHQV4RQ6BDJPLETHIWJR6EWCQ/
Another care unit closing down. They say staffing shortage but I've heard other things as the nursing number are actually not too bad their. Maybe the latest funding upgrade just didn't cut the mustard.

[winner69]

https://www.nzherald.co.nz/hawkes-bay-today/news/havelock-north-aged-care-units-sudden-closure-announcement-shocks-residents-families/VUHQV4RQ6BDJPLETHIWJR6EWCQ/
Another care unit closing down. They say staffing shortage but I've heard other things as the nursing number are actually not too bad their. Maybe the latest funding upgrade just didn't cut the mustard.

According to Portfolio Summary at March Mary Doyle is their biggest site …….429 villa’s, units, care, beds etc in total

[Greekwatchdog]

Xmas time in the sector. Investor News attached. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARV/419731/404817.pdfhttp://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARV/419731/404817.pdf

[winner69]

Gains on sales in H1 about $38m …less than the $43m reported last year

This signals Underlying profit will be less (significantly?) than the $39m reported last year

Not a good result ….even if excuse is a lot of sales were made in last month of F23

[BlackPeter]

Gains on sales in H1 about $38m …less than the $43m reported last year

This signals Underlying profit will be less (significantly?) than the $39m reported last year

Not a good result ….even if excuse is a lot of sales were made in last month of F23

SUM eating their lunch?

[winner69]

Banks sorted for a few more years

Interesting debt increased by $130m to $775m over last six months …no worries


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARV/420740/406096.pdf

[Balance]

Banks sorted for a few more years

Interesting debt increased by $130m to $775m over last six months …no worries


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARV/420740/406096.pdf


So debt continues to be used to pay dividends?

[winner69]

So debt continues to be used to pay dividends?

Seems to be the case Balance

[Greekwatchdog]

For Bar out this morning. Make your own mind up

NEUTRAL


Arvida Group (ARV) provided an update on drawn debt, implying meaningfully higher debt versus our and Visible Alpha consensus forecasts. The higher than expected debt is likely predominantly driven by higher development capex, but also worse than expected cash collection from new sales and resales. ARV also announced it has restructured its debt facilities: now split between NZ$450m of development facilities, excluded from Interest Coverage Ratio (ICR) covenants, and core facilities. This greatly improves ARV's ICR coverage. We view the aged care sector as attractive in the context of NZ equities. For a significant re-rating to take place we believe the operators need to demonstrate an ability to limit the increase in net debt and, eventually, to demonstrate an ability to generate positive free cash flow and deliver a decline in net debt. With this update we no longer believe that FY24 will see a slowdown in the build up of net debt for ARV and downgrade it to NEUTRAL with a decreased target price of NZ$1.30 (from NZ$1.55). We continue to view ARV as well positioned for long-term growth and consider the valuation highly undemanding.

What's changed?
Earnings: FY24/FY25/FY26 underlying earnings decreased -3%/-4%/-4% on higher interest, annuity EBITDA broadly unchanged.
Target price: Down to NZ$1.30 (from NZ$1.55) on higher net debt and decreased dividend forecasts.
Rating: Downgraded to NEUTRAL (from OUTPERFORM).
Higher than expected debt likely driven by a continued increase in capex
We increase our net debt estimate by ~+NZ$80m for 1H24 (similar increase for FY24), driven by (1) higher development capex spend. We had previously assumed a decrease in year-on-year development capex for ARV in 1H24, and we now expect it up ~+NZ$25m from 1H23 to ~NZ$130m, the highest half on record for the company; (2) worse than expected cash collection from sales. In ARV's 2Q24 update it had flagged 'extended settlement timeframes are still a factor'. We decreased our cash collections in our previous publication but decrease them further in this update. We also cut our dividend forecasts given a likely increased focus on cash.


RYM and OCA our preferred sector picks — a combination of attractive valuation and falling capex
Our two preferred aged care names are OUTPERFORM rated Oceania Healthcare (OCA) and Ryman Healthcare (RYM). We expect both to see a more modest increase in net debt in FY24, with OCA largely flat and RYM up single digits; while for ARV and Summerset (SUM) we now forecast debt up >+25%. RYM is valued at a substantial discount relative to SUM and OCA, in-line with ARV after historically trading at a premium on our preferred metric of EV/annuity EBITDA. ARV is on a substantial discount to book value but we expect faster growth with OCA (it has a large discount to book value). While RYM, OCA and ARV all remain below book value, any re-rate back to book will require evidence of improving free cash flow which we see more likely with RYM and OCA.

[Balance]

25c TP downgrade by Forbar.

That is a big decrease.

[Greekwatchdog]

Some big volume going through today

[ronaldson]

Some big volume going through today

Over 3m traded at a VWAP of $1.15 so that may fix the price point until the next reporting is in and we learn how it actually is/has been.

[Greekwatchdog]

ACC Topping up...

For this disclosure,—
(a) Total number held in class: 45,079,435
(b) Total in class: 727,975,669
(c) Total percentage held in class: 6.192%
For last disclosure,—
(a) Total number held in class: 36,340,817
(b) Total in class: 723,577,532
(c) Total percentage held in class: 5.022%

[winner69]

ACC not buying today …share price down

[winner69]

Not a real surprise ARV share price down to $1.06

[Greekwatchdog]

Half Year Result

• Reported (IFRS) profit after tax of $90.0m, up 1% on 1H23
• Underlying profit[1] for 1H24 of $33.6m, down 14% on 1H23
• Total assets of $4.0 billion, up 10% on 1H23
• NTA $2.00, up 4% on 1H23
• Gearing ratio of 33.6%
• 285 sales of occupation rights for the half, up 6% on 1H23
• 94 new retirement units delivered
• Interim dividend of 1.20 cents per share, DRP at 2% discount
28 November 2023 – Arvida Group Limited (Arvida) today announced net profit after tax of $90.0 million and underlying profit of $33.6 million for the six months ended 30 September 2023.
Commenting on the first half result Arvida Chief Executive Jeremy Nicoll said the business had continued to perform well in tough operating conditions and a slow housing market.
“As the past few years have demonstrated, the need to remain responsive to market conditions is essential for continued business performance. Our ability to adapt as circumstances have required has enabled the business to grow while we have focused on restoring profitability.”
Operations
Arvida reported revenue of $122.1 million up 12% on higher care and village revenues.
Higher costs across the business, commissioning of new care centres, and investment in people and technology teams and systems had contributed to operating costs increasing 14% to $117.9 million.
CEO Jeremy Nicoll said good progress was being made to mature the business in areas identified as strategically important. A commitment made to enhancing our employee value proposition had already seen tangible benefits in higher engagement across teams, increased staff retention and lower turnover.
“Investing in our culture is important to providing person-centred care and market leading quality of service to our residents. Our team’s delivery of a quality resident experience was again confirmed in the latest annual community surveys with excellent net promoter scores recorded.”
Sales momentum
In the six months to 30 September 2023, Arvida recorded 285 sales comprising 102 new sales and 183 resales. Compared to the prior corresponding six month period, the gross value of sales was up 2% to $171.4 million.
“In a challenging housing market both the volume and value of our sales exceeded the same period last year,” said Mr Nicoll. “The second quarter though to September was our best ever with a solid upswing in resales activity.”
Unit pricing continued to increase with resale prices up 4% on 2023 valuations. Resale and development margins of 28% and 18% respectively were recorded.
Mr Nicoll noted that the level of retirement units under application was 24% ahead of the same time last year and at record levels. High turn outs were also being experienced at recent open days as Arvida’s brand and marketing campaigns successfully delivered strong lead generation.
Development activity
Development milestones in the period included Cambridge’s premier care suite centre opening at Lauriston Park in June, Aria Bay apartments completing mid-September, and the first villa stages at Whai Mauri Ora in Te Awamutu successfully launching mid-November.
94 new units were delivered in the half with an average price of $900,000 for apartments and $970,000 for villas. A further 106 new units are planned for delivery in the second half of the financial year.
A total of $138.3 million was spent on development in the first six months as investment continued.
Arvida said villa stages were currently under construction at seven of its retirement communities. In addition, construction of a new care centre and apartment building at the premium Queenstown Country Club was progressing well to a targeted completion date in the next financial year. Good progress was also being made at Bethlehem Shores with the podium slab having recently being poured.
Balance sheet
Total assets increased $0.3 billion to $4.0 billion over the six months, comprising $3.7 billion of investment property. The increase reflected land and development activity and an increase in the fair value of Arvida’s 36 retirement communities.
Independent valuation firms CBRE and Jones Lang LaSalle expressed confidence in an improved outlook for the housing market, reverting their near-term house price growth assumptions to be more in line with historical growth assumptions when assessing the value of investment property.
Net tangible asset value per share increased to $2.00 per share.
Arvida independent chair Anthony Beverley said that the Board and executive team had placed considerable focus on ensuring the company applied a robust framework to, and management of, capital capacity and commitments.
“Subsequent to balance date, we were pleased to announce the refinancing and restructure of our banking facilities into a revolving core and development facility. This included adjustment to the interest cover covenant ratio.”
“In combination, the restructured facilities provide us with additional flexibility in the current interest rate and economic environment, and are better aligned to our medium-term growth strategy,” said Mr Beverley.
With the refinancing, Arvida had over $125 million of headroom in bank facilities. Gearing at 33.6% continued to be within the Board’s target range of 25%-35%.
Dividend
Mr Beverley announced the Board had declared a dividend of 1.20 cents per share (cps) to be paid on 21 December 2023.
Shareholders can further support growth by participating in Arvida’s Dividend Reinvestment Plan. Shares will be offered at a discount of 2.0% to the market price, calculated in accordance with the Dividend Reinvestment Plan Offer.
 
Outlook
Early signs of an improving operating environment are emerging, with leading indicators pointing to the beginnings of a recovery in the housing market, less uncertainty present in the economic outlook and clearer government policy for the aged care sector and business generally. The demand for quality retirement living options and aged care remain compelling.

[winner69]

Jeez Underlying Profit down 14% to 33.6m is worse than what I thought

Numbers don’t seem to reconcile with the bullish commentary around sales etc …must have lost heaps on day to day operations

Not a good result at all

[Jenny Ruth]

Hi. My latest column on Just the Business is about retirement villages. It isn't about Arvida directly but does mention it.
You can read it here: https://justthebusinessjennyruth.substack.com/p/retirement-village-review-continues

[trader_jackson]

I actually thought the result was incredibly robust - ARV is trading at a near 50% discount to its NTA (surely property prices can't fall 50% from where they are currently..?) while having close to double the operating profits of OCA (yet not double the marketcap)... when considering the tough environment of the past year - high inflation and disruption (ie cost pressures) combined with a massive fall in property prices (ie revenue pressures), today's result shows that ARV has navigated this fairly well and at $1.06 is incredible value and that the panic fall from the $1.20's really isn't justified given inflation is now coming down and property prices are now flat or increasing. Oh, and they even paid a dividend.

[Balance]

Jeez Underlying Profit down 14% to 33.6m is worse than what I thought

Numbers don’t seem to reconcile with the bullish commentary around sales etc …must have lost heaps on day to day operations

Not a good result at all

Do the RV companies operate in a different universe from the other property related companies?

They are still posting huge increases in property valuations when the likes of KPG actually accept market realities and reduce their property valuations!

No wonder the RVs' NTAs have little credibility with the market.

[mike2020]

Do the RV companies operate in a different universe from the other property related companies?

They are still posting huge increases in property valuations when the likes of KPG actually accept market realities and reduce their property valuations!

No wonder the RVs' NTAs have little credibility with the market.

Are they not different sectors of the real estate market? Cant one get a decent idea off actual sales?

[trader_jackson]

I would have thought commercial property is very, very different to residential property, particularly in near term outlooks

[Balance]

I would have thought commercial property is very, very different to residential property, particularly in near term outlooks

Residential property values have fallen too like commercial properties - in many locations, by heck of a lot more.

Industrial property is the one bright spot according to JLL where demand outstrips supply in the main centres.

[Bjauck]

Residential property values have fallen too like commercial properties - in many locations, by heck of a lot more.

Industrial property is the one bright spot according to JLL where demand outstrips supply in the main centres.
Don’t independent valuers determine the RV valuations?

[trader_jackson]

Residential property values have fallen too like commercial properties - in many locations, by heck of a lot more.

Industrial property is the one bright spot according to JLL where demand outstrips supply in the main centres.

Over the coming year residential property prices are likely to be flat or some even say going up as much as 8% but I imagine commercial properties will continue to slide, with liquidity also deteriorating for commercial properties while improving for residential properties.

[ValueNZ]

Do the RV companies operate in a different universe from the other property related companies?

They are still posting huge increases in property valuations when the likes of KPG actually accept market realities and reduce their property valuations!

No wonder the RVs' NTAs have little credibility with the market.
Frankly NTA doesn't matter one bit anyway. But it seems like it would be in the villages best interest to reduce their property valuations if it creates a tax deductible expense for them.

[Maverick]

I actually thought the result was incredibly robust - ARV is trading at a near 50% discount to its NTA (surely property prices can't fall 50% from where they are currently..?) while having close to double the operating profits of OCA (yet not double the marketcap)... when considering the tough environment of the past year - high inflation and disruption (ie cost pressures) combined with a massive fall in property prices (ie revenue pressures), today's result shows that ARV has navigated this fairly well and at $1.06 is incredible value and that the panic fall from the $1.20's really isn't justified given inflation is now coming down and property prices are now flat or increasing. Oh, and they even paid a dividend.
Sorry Trader but ARV just aren't in a great spot for the foreseeable future as far as growth goes. Don’t write me off as being an OCA zealot trying to disparage all the others. I’m just passing on my learnings about the industry which 100% apply here.

The problem ARV has is the phase of its building cycle right now. They are throttling deliveries back to 200 p/a and they are going to be villas for the next few years. With that amount of delivery at their usual 15% margins it's not going to generate much free cash to offset either their current debt or cash flow. To put some context here ARV is a $4,ooo,ooo,ooo company.

Another problem is the cost of that debt, that will hopefully abate if interest rates fall but that's surely a wee way off. They aren't in a cash position to meaningfully pay it down. So that cost has shot up and will stay at these levels for some time.
Great they are shaving off bits of surplus greenfield but that's not enough to free up meaningful cash.

The last and biggest problem they have right now is their apartments. Aria is in a great suburb but average location. The photo of it in the presentation is taken from a horrible closed down liquor site car park and to the left is a bowling green. That's the view for residence. Loads of traffic too. It's also pretty empty so it has no vibe at the moment. It will be a slow sell. It will fill over the next 2 years but wont command the price that towers need to yield good margins.

Tower blocks only really work if you can build in super locations and are capital intensive. Plus they take 5 years from breaking dirt to fully selling.

Bethlehem apartments will generate moderate margins but they are many years away from being finished and fully sold down.
Queenstown will be great, really great, that's where an apartment block will work superbly. Sadly for investors that's 5 years away too and they only have about 30 apartments. Not enough to really help.

No wonder just about all the analysts' questions today were about capital management. ARV are a really good company and does great work but their delving into apartments is going to hold back profits for many years at this stage of their construction cycle. And again, building 200 villas p/a isn't enough to fill in enough profit growth during this time.

If you like apartments then OCA are coming out of this same tunnel of pain and if villas are your thing then SUM have this perfected.

No disrespect to ARV , they'll be fine in the end but why go through all those years and years and years of waiting when we can learn from others about the capital and patience required to make apartments work.

Jeremy mentioned things coming right when the property market does. This is definitely going to help substantially . It is probably the only thing that can improve things at this stage of building but for me that makes ARV more speculative on NZ housing than solid investing.

[bull....]

Frankly NTA doesn't matter one bit anyway. But it seems like it would be in the villages best interest to reduce their property valuations if it creates a tax deductible expense for them.

yep nta means garbage on these companies. cashflows is the main metric you should value them on.

[trader_jackson]

Sorry Trader but ARV just aren't in a great spot for the foreseeable future as far as growth goes. Don’t write me off as being an OCA zealot trying to disparage all the others. I’m just passing on my learnings about the industry which 100% apply here.

The problem ARV has is the phase of its building cycle right now. They are throttling deliveries back to 200 p/a and they are going to be villas for the next few years. With that amount of delivery at their usual 15% margins it's not going to generate much free cash to offset either their current debt or cash flow. To put some context here ARV is a $4,ooo,ooo,ooo company.

Another problem is the cost of that debt, that will hopefully abate if interest rates fall but that's surely a wee way off. They aren't in a cash position to meaningfully pay it down. So that cost has shot up and will stay at these levels for some time.
Great they are shaving off bits of surplus greenfield but that's not enough to free up meaningful cash.

The last and biggest problem they have right now is their apartments. Aria is in a great suburb but average location. The photo of it in the presentation is taken from a horrible closed down liquor site car park and to the left is a bowling green. That's the view for residence. Loads of traffic too. It's also pretty empty so it has no vibe at the moment. It will be a slow sell. It will fill over the next 2 years but wont command the price that towers need to yield good margins.

Tower blocks only really work if you can build in super locations and are capital intensive. Plus they take 5 years from breaking dirt to fully selling.

Bethlehem apartments will generate moderate margins but they are many years away from being finished and fully sold down.
Queenstown will be great, really great, that's where an apartment block will work superbly. Sadly for investors that's 5 years away too and they only have about 30 apartments. Not enough to really help.

No wonder just about all the analysts' questions today were about capital management. ARV are a really good company and does great work but their delving into apartments is going to hold back profits for many years at this stage of their construction cycle. And again, building 200 villas p/a isn't enough to fill in enough profit growth during this time.

If you like apartments then OCA are coming out of this same tunnel of pain and if villas are your thing then SUM have this perfected.

No disrespect to ARV , they'll be fine in the end but why go through all those years and years and years of waiting when we can learn from others about the capital and patience required to make apartments work.

Jeremy mentioned things coming right when the property market does. This is definitely going to help substantially . It is probably the only thing that can improve things at this stage of building but for me that makes ARV more speculative on NZ housing than solid investing.




What you're essentially saying is ARV are in a phase of growth and this growth will pay off in time - a classic case of short term pain for long term gain, except the pains they're experience right now aren't actually that bad (there's not huge backlogs of stock to sell through like SUM had at one point) - and within a few years (I don't think it will be as long as 5) the current investments they're making will be pumping - for 72% of Aria bay is actually be sold or under contract is pretty good in my view given it only opened a month or something ago - I imagine the vibe will be there fairly quickly with a bowling club just across the road with relatively good access (not only to the bowling club) but to the Sunday market, shops and even the beach within reach - Aria Bay has gone from strength to strength since ARV acquired it in 2015 or so - literally transformed it from a few houses around the place to a fully functioning fully catering village (coverage for all types of care) - I believe Aria Bay will be far better than you're giving it credit for (and I actually think it was good news the liquor site to have closed down!)

Clearly the market thinks things are all downhill from here - ARV have proven the market wrong before (a number of times), lets see if they can do it again!

[bottomfeeder]

I would rather have shares in a company with double the NTA value, than hold cash. The amount of money being thrown away around the world particularly in Europe and the middle east must be super inflationery. The Ukranian conflict is going through so much money for munitions, and the arms exchanged for currencey are just reforming into a part of the earth. The US is funding palestinians lives. They dont work, this money is like monopoly money. The net effect is monstrous inflation. It will take the next year to flow through. Similarly the value of NTA will reach a point soon where earnings will become appropriate to the value of assets. It just takes a little time. I would be getting out of cash real quick.

[Maverick]

What you're essentially saying is ARV are in a phase of growth and this growth will pay off in time - a classic case of short term pain for long term gain, except the pains they're experience right now aren't actually that bad (there's not huge backlogs of stock to sell through like SUM had at one point) - and within a few years (I don't think it will be as long as 5) the current investments they're making will be pumping - for 72% of Aria bay is actually be sold or under contract is pretty good in my view given it only opened a month or something ago - I imagine the vibe will be there fairly quickly with a bowling club just across the road with relatively good access (not only to the bowling club) but to the Sunday market, shops and even the beach within reach - Aria Bay has gone from strength to strength since ARV acquired it in 2015 or so - literally transformed it from a few houses around the place to a fully functioning fully catering village (coverage for all types of care) - I believe Aria Bay will be far better than you're giving it credit for (and I actually think it was good news the liquor site to have closed down!)

Clearly the market thinks things are all downhill from here - ARV have proven the market wrong
before (a number of times), lets see if they can do it again!
Have you actually visited Aria, Trader?

Count the verandah furniture , go to The Sands around the corner, buy a coffee within , count their balcony stuff (purely as a reference point) and tell me ARV really have sold 72%…I see 3 so far…seriously , tell me what you are observing.

Apartments just don’t sell that fast , that’s history where ever you get your data from.
Anyway Aria is just part of the ARV fabric so let’s not cause too much of a side show on that one delivery.

I’ve offered my hard gained knowledge on 5 yrs of learning in this industry. Take from my offering to you as you wish.

[SailorRob]

I would rather have shares in a company with double the NTA value, than hold cash. The amount of money being thrown away around the world particularly in Europe and the middle east must be super inflationery. The Ukranian conflict is going through so much money for munitions, and the arms exchanged for currencey are just reforming into a part of the earth. The US is funding palestinians lives. They dont work, this money is like monopoly money. The net effect is monstrous inflation. It will take the next year to flow through. Similarly the value of NTA will reach a point soon where earnings will become appropriate to the value of assets. It just takes a little time. I would be getting out of cash real quick.


Some very good points here, that said double the NTA value is meaningless and saying something will reach the point where it will become more appropriate to value the assets off earnings... when the hell did we ever not value an asset based on earnings or future earnings????

That is the ONLY way to EVER value an asset.

NTA of Apple is 50 god damned times less than the market cap. Let me put it another way, the market price of Apple is 50 times its tangible assets. Is this wrong? Even if you think Apple is dramatically overvalued it's still worth orders of magnitude more than tangible assets.

So now we all agree on that.... Could it be feasible that another company is worth a tiny fraction of its tangible assets????

Of course it is.

[SailorRob]

Sorry Trader but ARV just aren't in a great spot for the foreseeable future as far as growth goes. Don’t write me off as being an OCA zealot trying to disparage all the others. I’m just passing on my learnings about the industry which 100% apply here.

The problem ARV has is the phase of its building cycle right now. They are throttling deliveries back to 200 p/a and they are going to be villas for the next few years. With that amount of delivery at their usual 15% margins it's not going to generate much free cash to offset either their current debt or cash flow. To put some context here ARV is a $4,ooo,ooo,ooo company.

Another problem is the cost of that debt, that will hopefully abate if interest rates fall but that's surely a wee way off. They aren't in a cash position to meaningfully pay it down. So that cost has shot up and will stay at these levels for some time.
Great they are shaving off bits of surplus greenfield but that's not enough to free up meaningful cash.

The last and biggest problem they have right now is their apartments. Aria is in a great suburb but average location. The photo of it in the presentation is taken from a horrible closed down liquor site car park and to the left is a bowling green. That's the view for residence. Loads of traffic too. It's also pretty empty so it has no vibe at the moment. It will be a slow sell. It will fill over the next 2 years but wont command the price that towers need to yield good margins.

Tower blocks only really work if you can build in super locations and are capital intensive. Plus they take 5 years from breaking dirt to fully selling.

Bethlehem apartments will generate moderate margins but they are many years away from being finished and fully sold down.
Queenstown will be great, really great, that's where an apartment block will work superbly. Sadly for investors that's 5 years away too and they only have about 30 apartments. Not enough to really help.

No wonder just about all the analysts' questions today were about capital management. ARV are a really good company and does great work but their delving into apartments is going to hold back profits for many years at this stage of their construction cycle. And again, building 200 villas p/a isn't enough to fill in enough profit growth during this time.

If you like apartments then OCA are coming out of this same tunnel of pain and if villas are your thing then SUM have this perfected.

No disrespect to ARV , they'll be fine in the end but why go through all those years and years and years of waiting when we can learn from others about the capital and patience required to make apartments work.

Jeremy mentioned things coming right when the property market does. This is definitely going to help substantially . It is probably the only thing that can improve things at this stage of building but for me that makes ARV more speculative on NZ housing than solid investing.





The level and depth of your knowledge of this industry and these companies is stunning.


Really, anyone investing anything that is meaningful to them into any of these companies should be at a similar level as you, but nobody is. Great you have a handle on the competition and rest of the industry too.

Bum boy analysts simply don't have the time to do this type of work in amongst their other corporate nonsense tasks.

[troyvdh]

MMM interesting abuse.
However where do folk think ARV will be in say 5 years..its previous high I believe was 2 dollars...Id be happy with 20 percent pa...Bye all means carry on the abuse.

[trader_jackson]

Have you actually visited Aria, Trader?

Count the verandah furniture , go to The Sands around the corner, buy a coffee within , count their balcony stuff (purely as a reference point) and tell me ARV really have sold 72%…I see 3 so far…seriously , tell me what you are observing.

Apartments just don’t sell that fast , that’s history where ever you get your data from.
Anyway Aria is just part of the ARV fabric so let’s not cause too much of a side show on that one delivery.

I’ve offered my hard gained knowledge on 5 yrs of learning in this industry. Take from my offering to you as you wish.

Yes I have visited Aria, and The Sands multiple times - touring multiple rooms and facilities at both villages, including visiting The Sands shortly after it opened, and driving past it many, many times since then - I can tell you there was no 'vibe' in the early days then either and they took years to sell all of them despite the amazingly good location, vibe and balcony counting aside, the fact is The Sands is not a fully integrated village - eg no dementia care so if your loved one gets this, you'll have to move down the road to the likes of Aria Bay. Additionally, I have lived around that area for several years and thus have seen both of these villages in their prior states and now their fully developed states. Lastly, I had a love one at Aria Bay and he had nothing but positive things to say about them as did the wider family, he passed away earlier this year. So, yes, I would say I know these 2 villages particularly well.

Although I was a shareholder in ARV, I couldn't partake in the July 2015 cap raise to buy Aria's villages, but back then Aria Bay only had a total of 90 beds and ORA's (57 rest home beds, 24 serviced apartments and 9 very recently completed apartments). Today, Aria Bay has no rest home beds, but 59 care suits (catering to rest home, hospital and dementia), 17 serviced apartments and 91 apartments). Back then, Aria Bay was valued at $21.8m today (just 8 and a bit years later) its worth more than 4x that

As for where the numbers are coming from, they're certainly not coming from balcony counting, they're coming from today's slides - Please see slide 13 where it clearly mentions of the 57 delivered apartments 29 have been settled already + 12 contracted (=72% sold) - although most of the settled were Mayfair relocations, even when stripping these out, far more than 3 have been sold. You'll also see on this slide that they've made some pretty good progress with their other 1H24 deliveries.

ARV have never been about villas, cool locations or apartments - they've been about fully integrated villages in ideal and strategic locations (some of which are very nice yes) with great care throughout (hence ARV has some of the highest care bed occupancy rates - I think they've always had the highest for a listed company)

I may not be the biggest hotshot expert out there, nor the first one to claim seniority, but I have been in Arvida since day 1 (in 3 weeks time that'll mark 9 years) and have been following the industry to a varying degree ever since.

[Greekwatchdog]

For Bars take on result

NEUTRAL


Arvida Group (ARV) reported a weak and somewhat messy 1H24 result, but with sprinkles of hope for the future mixed in. Excluding an insurance accrual and development gains from non-cash transfers of residents treated as sales, we estimate underlying earnings were down ~-45% versus 1H23. A poor start to ARV's first period for some time, without any prior period acquired growth. That said, the results did have some positives. ARV's care revenues grew strongly, up +15% per bed as both occupancy and government funding improved meaningfully — a welcome change from recent history. ARV also disclosed a good start to 2H24. We estimate ~25 new sales in October versus the run-rate of ~13 per month in the 1H24, excluding non-cash transfer sales. We retain NEUTRAL with a reduced target price of NZ$1.18.

What's changed?
Earnings: Annuity EBITDA down -11%/-13%/-9% with higher care fees offset by higher costs and lower resale gains.
Target price: Reduced to NZ$1.18 from NZ$1.30 on reduced dividends, increased net debt, and lowered annuity EBITDA.
Net debt likely to continue up for the foreseeable future — but leverage should stabilise
In-line with its pre-announcement, ARV reported net debt up ~+NZ$200m (+37%) YoY, with gearing +600bps to 34%, near the upper end of its 25% to 35% target range. On our forecasts ARV is likely to remain at or slightly above the upper end of its target range. We were encouraged by ARV's clear message that future development would be path dependent. The level of future developments will be dependent on demand and ARV guided to lower deliveries in FY25. We see a tougher path for ARV to meaningfully reduce debt versus Oceania Healthcare (OCA). ARV has ~NZ$100m of available unsold new stock, ~13% of its debt, compared to ~60% for OCA.


Care revenues and profitability are recovering
On a positive note, care revenues grew ~+20% driven by a combination of: (1) improved occupancy rate, (2) three months of increased funding, and (3) better staff availability. We estimate that care EBITDA margins for ARV will improve by ~+800bps in FY24 versus FY23, taking it to near breakeven. This is a sharp reversal of the dramatic deterioration in profitability over the last three years.


Transfer sales and insurance recoveries, but what is underlying earnings?
ARV included NZ$8.4m of insurance recoveries and, we estimate, ~NZ$4.5m of development gains from the non-cash sale of 21 apartments at Aria Bay to residents transferring there (from an apartment block that is being de-commissioned). We have some sympathy for the inclusion of insurance recoveries as they relate to estimated lost earnings, but to date only a small portion has been settled for cash. We have also left our estimate of non-cash transfer development gains in underlying earnings to make our estimates comparable to that of consensus and company communication.

Forecast changes
We downgrade our underlying earnings and annuity EBITDA estimates over the forecast horizon due to: (1) lower resale gains driven by lower number of resales, (2) higher total costs, led by increased employee and property expenses given the growth seen in 1H24 and indication by management these levels are likely to be the new base, (3) higher interest costs. Offsetting these are increased care fees, given the higher care fees earned per bed, on sustained elevated care occupancy on 1H24. We decrease our dividend forecasts to assume a pay out at the bottom end of its 30% to 50% range over our forecast horizon. Our net debt estimates increase on higher capex and lower ongoing operations cash flow.

[winner69]

Thanks gwd

Love how they summarise, esp the sprinkles of hope bit — Arvida Group (ARV) reported a weak and somewhat messy 1H24 result, but with sprinkles of hope for the future mixed in.

[Maverick]

I do apologize Trader if I've come across haughty to you, that was never my intention. You clearly know Aria well .
I am also sorry for your loss earlier this year and am starting to understand your connection with ARV.

The Forbar report above (cheers GWD) now explains why the puzzling discrepancy of sales. I see virtually nil occupancy while ARV claims 28.
BTW, balcony furniture is a very accurate , non intrusive measure when there is no existing relationship with staff. Plus , some days I’m just to chicken to go in.

Turns out 21 of these sales are non cash transfers. While classified as sold , it would seem moving day from Mayfair hasn't happened yet. Of the remaining 7 real sales ,I expect half of them are still in the process of moving.

The good thing about relocating residents is the village vibe occurs faster.
The problem with relocating residents is that it isn't profitable and those units still can’t be properly sold when there will be a waiting list form in 2 years time.

The purpose of my posts Trader is not to disparage the ARV. They do things well, I fully agree with you.
You are also right also that Sands started with no vibe and was slow….we agree there too. That is actually the main point of yesterday's posts.
Just how bloody slow and capital intensive building apartments is. Plus , even then , they only make good coin in spanky areas.

My posts yesterday are from an investor perspective only, that ARV will experience low growth for the next 3-4 years unless property goes gangbusters again. Their buildings will be marvelous , just like everyone else's but at this stage of the journey the debt, and high cost of, will remain and financial rewards are a long way off.

[Balance]

A rather damning report from ARV’s house/corporate broker Forbar.

Then, there’s tomorrow when ARV is taken out of MSCI index.

[Bjauck]

https://www.nzx.com/announcements/423543
It is incredible how directors decide on behalf of shareholders, who are kept in the dark, that an offer at price significantly higher than the prevailing share price is not worth pursuing. Since then the SP has dropped 25%. In the meantime this inside information has been leaking to some shareholders. Quite shameful.

(Repeated from the Oceania thread)

[trader_jackson]

Always said it was worth well more than a buck but no I did not know about this - $1.70 is a massive premium, but really ARV in a takeover is worth more than a 15% discount to book value. No doubt about it at current levels ($1 ish) ARV is the best value listed retirement stock - and the guys trying to take it over certainly knew that

[bottomfeeder]

A bit cheeky of the Directors to not put this offer to shareholders. Id be real happy with $1.70

[Balance]

https://www.nzx.com/announcements/423543
It is incredible how directors decide on behalf of shareholders, who are kept in the dark, that an offer at price significantly higher than the prevailing share price is not worth pursuing. Since then the SP has dropped 25%. In the meantime this inside information has been leaking to some shareholders. Quite shameful.

(Repeated from the Oceania thread)

Get the sp up and sell into it?

One too many highly conditional unsolicited offers these days at prices way above market.

Something smells.

[X-men]

Bloody out of jail card there!!!

[bull....]

lol looks like they released the news to save the stock price going new lows

[ronaldson]

lol looks like they released the news to save the stock price going new lows

Yes, and the fizz has already left the bottle! Back under $1 - only consolation is the DRIP issue price has been fixed at $0.9277 and the share price had drifted below that earlier today.

But lots of bids for shares that are undervalued on the NZX are coming out of the woodwork lately!

[sb9]

What’s this fascination abt 1.70 figure both for ARV and RAK, yet both Boards chose keep quiet until needed to disclose to the market.

[nztx]

The Office Boy finally turfed out the rubbish & low & behold someone dug up something interesting ? ;)

A taste of $1.70 probably would have been welcomed by those who got to suck the Kumara on the CR a while back
closer to the 200 Peg :)

[Bjauck]

Yes, and the fizz has already left the bottle! Back under $1 - only consolation is the DRIP issue price has been fixed at $0.9277 and the share price had drifted below that earlier today.

But lots of bids for shares that are undervalued on the NZX are coming out of the woodwork lately! The NZ share market with its “disclosure rules” is becoming the coconut shy sideshow at the fair. Casually lob a few balls at the coconut listings and a company may fall.

[troyvdh]

For once I agree with balance ..something smells...isnt the NTA 2 dollars.Im VERY familiar with this company.

[flyinglizard]

inside trading

[Baa_Baa]

inside trading

Big call, illegal as well. How?

[troyvdh]

Fair call Baa.

[Greekwatchdog]

For Bars take on it.

Arvida Group (ARV) turned down a highly conditional non-binding NZ$1.70 per share takeover bid from an offshore infrastructure fund in September. The bid represented a ~+36% premium to its September price of ~NZ$1.25 (~+89% premium to its last undisturbed price of NZ$0.90). ARV said it has no reason to believe anything further will proceed from this bid; there is a big step between a firm offer and a highly conditional unsolicited non-binding bid. Asset multiples across the sector, and for ARV specifically, remain compressed creating an attractive backdrop for takeovers. We note that since the offer ARV has reported a ~+NZ$130m increase in net debt over the last six months, ahead of expectations and a subdued 1H24 result. Apart from a deep discount to book value, ARV's high level of (admittedly long dated) embedded value may have attracted a patient buyer.



Why ARV?
We believe the infrastructure bidder could have been attracted to ARV's ~-20% discount to its potential long-term cash release from its currently built up embedded value and development work in progress. ARV is the only stock in the sector trading at a material discount on this measure. While the bid was at a ~+10% premium to this value, a patient investor could extract this cash while still being left with the underlying business. ARV is also trading at ~0.5x its book value, a sector and historic low.

[bottomfeeder]

Anyone got an idea who the offeror was. Looks like, from the exchange rate, it may have been the US. You would think they must already be on the share register, under the 5% threshhold. Unlikely that someone looking at that price would give up so easily. They must be waiting for the dust to settle, before the machinations start. I would say they will buy and sell to keep the price down until they are ready to take out a major player or two. Then whammy a hostile takeover. Sounds so simple to do.

[bottomfeeder]

The listed NTA in a lowish difficult market must mean a potentially much higher NTA when the Nats fix up our uncertain economy. Interesting times with ARV over the next 12 months.

[WAIKEN]

Great analysis bottomfeeder

[ronaldson]

DRIP shares issued at $0.9277 on 21 December. ARV trading now at $1.07 on 28 December. Must be one of the best Reinvestment Plan allocations ever for holders in terms of % benefit over a one week period.

[trader_jackson]

DRIP shares issued at $0.9277 on 21 December. ARV trading now at $1.07 on 28 December. Must be one of the best Reinvestment Plan allocations ever for holders in terms of % benefit over a one week period.
Share price was far far too low, now its just far too low - heading in the right direction at least - shouldn't take much to get it back into the $1.20's - afterall, the takeover offer was at $1.70 so even $1.20 is a steal, especially if they came back to the party and offered around the $1.50 mark

[winner69]

Share price was far far too low, now its just far too low - heading in the right direction at least - shouldn't take much to get it back into the $1.20's - afterall, the takeover offer was at $1.70 so even $1.20 is a steal, especially if they came back to the party and offered around the $1.50 mark

Remember our ‘bet’ trader …will ARV or HGH get to 150 first

Race could be on again :eek2:

[Bjauck]

Share price was far far too low, now its just far too low - heading in the right direction at least - shouldn't take much to get it back into the $1.20's - afterall, the takeover offer was at $1.70 so even $1.20 is a steal, especially if they came back to the party and offered around the $1.50 mark
But being the NZ regulated Share market, they won’t tell retail shareholders about an offer until the gossip is near universal. If there is another offer, it will just be gossip among the high, mighty and insiders. When the offer comes in at $1.10 they will then perhaps disclose it more quickly to retail shareholders - perhaps.

[trader_jackson]

Remember our ‘bet’ trader …will ARV or HGH get to 150 first

Race could be on again :eek2:

HGH got there first this time it would seem, it did have a bit of a head start tho

[Nigelk]

Merging 19 privately owned retirement villages into a single publicly owned company should prove challenging.19 different computer systems,19 different resident's contracts,19 different payrolls,19 different sets of standards,and 19 different sets of owners.Very challenging!!!
I think it shows that stand alone retirement villages can not compete with the likes of MET,RYM,and SUM.Compliance and other costs are now too high for them.
Yes more choice for the investor, having more listed retirement sector companies to chose from,but the fact remains the demand is,and will continue to be greater than supply.
I think the Ben Hurst referred to in the article is a member of The Hurst Pratley Group, who own a number of very good villages.


If they do it properly, that's where the greatest short-term value can be derived. Moving from the multiples they pay for private co's to those derived for listed co's. Plus including the economies of scale that can be achieved from a consolidated operation has huge potential over a couple of years. It all comes down to faith..Can they deliver or not?

[trader_jackson]

Share price was far far too low, now its just far too low - heading in the right direction at least - shouldn't take much to get it back into the $1.20's - afterall, the takeover offer was at $1.70 so even $1.20 is a steal, especially if they came back to the party and offered around the $1.50 mark

Since posting this less than 2 weeks ago the share price is up over 10% ($1.08 to $1.21).

SUM's fairly positive announcement today appears to have benefited the entire sector, but particularly ARV with its share price up 5% today.

It appears that last month (when ARV was around the $1 mark), ARV truly was the most undervalued retirement stock on the NZX as in the past month ARV is up 29% in just a month vs OCA at 7%RYM at 10% and SUM at 17% - all healthy gains, but not remotely close to ARV's.

With an NTA of around $2, one would think even at $1.21, ARV is still cheap.

[WAIKEN]

I agree Trader. We are also up substantially from last years low of 0.90.
The board rejected a highly conditional bid of 1.70. This should have been a shareholder not a board decision.
I estimate the NTA could be 2.10-2.20 by year end. If replacement cost of land and buildings was used I see the NTA as well north of 3.00 by year end. Most economists are tipping interest rates to fall in 2024. Residential property prices are on the march again so RV clients will have more money to spend and will be selling properties more quickly.
I believe the mystery fund that bid 1.70 hasn't gone away and other players will also be circling. This reminds me of Metlife when it was selling for half of its NTA and I jumped in and doubled my money when the Swedish fund pounced. I also think other deeply discounted RVs like OCA will also be on the radar of the circling sharks.

[bottomfeeder]

I think the only spanner in lower interest rates happening soon is the conflicts in the middle east. Already we will be seeing inflationary effects of the Houthies debacle in the red sea. The extension of the conflict to Lebanon, Iran etc may mean more inflation for longer resulting in higher interest rates for longer, thus postponing the recovery of the likes of OCA, Arvida etc.

[WAIKEN]

I believe there is some clever downward manipulation of the share price going on

[winner69]

I believe there is some clever downward manipulation of the share price going on

On its way up again …following OCA

[winner69]

Hey tj …….everybody saying Heartland could go to $1

We could have a bet who’ll get there first Arvida or Heartland

Or being optimistic have a go who’ll get back to $1.50 first

Strange world eh even thinking such stuff

[Greekwatchdog]

8 March 2024 – Arvida Group Limited (NZX: ARV) has entered into a conditional agreement to sell itsStrathallan village located in Timaru for a sale price of $30.0m. The transaction is subject to customaryapprovals being obtained. Arvida anticipates completion of the transaction to occur at the end of April2024 or shortly thereafter.

The sale price represents a 3% discount to valuation.

Falls outside Year End. Be an interesting Full Year result, thou they do provide Update in April

[ronaldson]

Strathallan Village was acquired by Arvida only in 2017 in a $106m deal including Mary Doyle Lifecare in Havelock North and 50% of Village at the Park Lifecare in Wellington.

At that time Timaru media said it had 134 staff and comprised 51 villas, 46 apartments and 77 rest home,hospital wing and dementia beds. So a high needs based component. The hospital wing was constructed in 1999, and the remainder of the facility pre-dates that, possibly by quite a few years.

So we have an older facility with an intensive staffing requirement. Difficult in the circumstances to calculate whether the acquisition delivered any real profit over the timeframe involved. Certainly to recycle $30m at todays interest rates has value.

[kiora]

Looks like a bargain?
https://www.stuff.co.nz/business/350217311/timarus-arvida-strathallan-may-be-sold-competitor?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Wednesday+2 0+March+2024

[ronaldson]

3% discount on $30m is $900k, so with transaction costs ARV is probably taking a $1m hit to its operating surplus to make this divestment. Must have thought the opportunity to onsell to a highly regarded operator with the most incentive to purchase was compelling.

Obviously staff will simply transfer in their existing roles. If the figure I cited in #1666 above has continued the ratio to occupiers is high, because of the aged care beds.

On another note, could you possibly build 51 villas and 46 apartments together with all the other infrastructure that's on site for $30m today? Everything is out of whack currently.

[kiora]

3% discount on $30m is $900k, so with transaction costs ARV is probably taking a $1m hit to its operating surplus to make this divestment. Must have thought the opportunity to onsell to a highly regarded operator with the most incentive to purchase was compelling.

Obviously staff will simply transfer in their existing roles. If the figure I cited in #1666 above has continued the ratio to occupiers is high, because of the aged care beds.

On another note, could you possibly build 51 villas and 46 apartments together with all the other infrastructure that's on site for $30m today? Everything is out of whack currently.

"On another note, could you possibly build 51 villas and 46 apartments together with all the other infrastructure that's on site for $30m today? Everything is out of whack currently"

$309,278/apartment or villa excluding 77 rest home,hospital wing and dementia beds,I doubt it

[Greekwatchdog]

And here it is. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARV/429131/416258.pdf

[Baa_Baa]

And here it is. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARV/429131/416258.pdf

Good results, encouraging for the sector as well.

[Greekwatchdog]

Good results, encouraging for the sector as well.

Couldn't agree more Baa Baa. Was good buying in the $0.90's. Market reaction will be very interesting.

[Lego_Man]

Couldn't agree more Baa Baa. Was good buying in the $0.90's. Market reaction will be very interesting.

Good result but markets might focus on the paragraph re: no further engagement on takeover bid.

[Greekwatchdog]

[QUOTE=Lego_Man;1047220]Good result but markets might focus on the paragraph re: no further engagement on takeover bid.

Let them. That stuff is irrelevant, I was looking for solid sales and a reduced spend and debt levels. Take over is for traders. The CEO and Board will have to face shareholders at Annual Meeting and give a please explain.

[thegreatestben]

Good results, encouraging for the sector as well.

Yes like many others here will agree, this is good to see as a retirement sector investor.

[winner69]

For what it’s worth my thoughts

ARV latest update reads well and it seems as if things are heading in right direction.

But they seem to gettin into the habit of selling heaps more (full year v pcp 21 more new sales / 33 more resales) but only making a little more

It seems the increase in resales generated about $5m more in way realised gains but 21 more new sales only generated about the same in realised gains as last year.

From what they've disclosed today my estimate for FY23 Underlying Profit is $91m .....last year was $88m .......not much if an increase is it .......and doesn't seem to reflect Jeremy's really enthusiastic rave.

Whatever it's better than going backwards and things will get much better from here.

Market will like what he said about cash flows.

[winner69]

Update not firing up the market is it …..so far

[Greekwatchdog]

Update not firing up the market is it …..so far

There has been ramp up leading into announcement and well the market is rather weak so far albeit volumes are next to nil. Still looking cheap

[winner69]

There has been ramp up leading into announcement and well the market is rather weak so far albeit volumes are next to nil. Still looking cheap

Market woken up ….and listening to you gwd with price on a roll

Future must be looking bright

Be back in mid 120’s next week

[winner69]

And here it is. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARV/429131/416258.pdf

Yes Gwd it seems a really strong 4th quarter sales wise

And this is great news ….”Into the new financial year there is good momentum with almost 40% of resales inventory at March end sold”

That’s pretty good going eh

[Greekwatchdog]

Yes Gwd it seems a really strong 4th quarter sales wise

And this is great news ….”Into the new financial year there is good momentum with almost 40% of resales /inventory at March end sold”

That’s pretty good going eh

Sure s W69. Onwards and Upwards thou little steps at a time.

[Greekwatchdog]

For Bars Review.
Arvida Group's (ARV) semi-annual investor update was on the whole, positive. It delivered: (1) strong resale gains, driven by both solid unit sales and margins, and (2) illustrated net debt was tracking better than our expectations. We were also encouraged by the reduced FY25 build guidance, suggesting a focus on reducing debt and realising the potential of its Arena acquisition. A sensible prioritisation given how the stock is currently valued. On the negative side was slightly weak new unit sales. But alongside this ARV provided some positive outlook comments that it has ‘started to see an up tick in settlement activity’ and applications are up >+20% year-on-year. We increase our target price to NZ$1.30, NEUTRAL.
link


NZX Code
ARV


Share price
NZ$1.18


Target price
NZ$1.30 (from 1.21)


Risk rating
Medium


C&ESG rating
B


Market cap
NZ$854m


Avg daily turnover
431.2k (NZ$481k)






link


Financials: Mar/
23A
24E
25E
26E


Rev (NZ$m)
318.9
352.5
355.4
381.9


NPAT* (NZ$m)
88.0
88.0
71.1
77.0


EPS* (NZc)
12.2
12.2
9.8
10.6


DPS (NZc)
4.9
3.0
3.1
3.3


Imputation (%)
0
0
0
0




*Based on normalised profits







link


Valuation (x)
23A
24E
25E
26E


PE
9.7
9.7
12.0
11.1


EV/EBIT
13.9
14.4
16.9
15.4


EV/EBITDA
12.8
13.3
15.3
14.0


Price / NTA
0.6
0.6
0.6
0.5


Cash div yld (%)
4.1
2.5
2.6
2.8


Gross div yld (%)
4.1
2.5
2.6
2.8











What's changed?


Earnings: Annuity EBITDA increased +18%/+4%/+1% over FY24/FY25/FY26 given higher resale gains while underlying earnings are +21%/-6%/-2% over the same forecast horizon given lower new sale units in FY25/FY26, in-line with the lower build rate
Target price: Increased to NZ$1.30 (from NZ$1.21) given increased Annuity EBITDA and lowered net debt.


Strong resales a positive sign
The key positive from ARV's update was the strength of its resale gains achieved. Both (1) strong unit sales, up +12% year-on-year for 2H24, and (2) improved resale margins, 31.5% in 2H24 versus 27.1% in 1H24, drove the result. The strength in margins comes despite our MI index suggesting aged care operators have held unit prices broadly flat for the last 18 months. We believe this suggests ARV has sold units with longer occupant times over 2H24, similar to Summerset's recent result. With some of these sales likely from its acquired Arena villages, we view this as a positive that its sizeable embedded value in its portfolio is starting to translate to cash gains.

Net debt controlled well
ARV's indication that drawn debt increased +NZ$27m over 2H24 was ~NZ$30m better than we expected and marks an impressive turn around from 1H24. It appears this result was driven by improved cash collection of sales and the higher resale gains, with deliveries in-line with expectations. We reduce our estimate of net debt growth over the medium term due to its lowered build rate and also aided by the NZ$30m sale of its Timaru village.

Build rate tempered — living within its means, a sensible choice
ARV has indicated a lowered build rate target for FY25. At ~150 units it is comfortably below our prior estimate and the ~200 delivered in FY24, but we believe this a logical move for ARV and illustrates its more conservative approach to capital management rather than a considerable drop in expected demand for its product. Of this 150 units for FY25, ~60% will likely come from its Queenstown Country Club development (care suites and apartments) with the remainder villas.

[winner69]

Thanks GWD

There profit forecast F24 lower than my $91m ..interesting

[trader_jackson]

Hey tj …….everybody saying Heartland could go to $1

We could have a bet who’ll get there first Arvida or Heartland

Or being optimistic have a go who’ll get back to $1.50 first

Strange world eh even thinking such stuff

Well ARV's bounced in the 90's before (in the past few months) but HGH sub $1 today is the lowest its been since the darkest days of April 2020... ARV down 5% in the past year while HGH is down 35% - ARV in a bit of a grey area perhaps, but the days are pretty dark for HGH currently given cap raise was done at $1.00 just a few weeks ago... strange world indeed

Disclosure: sold out of ARV this year at $1.20

[winner69]

Well ARV's bounced in the 90's before (in the past few months) but HGH sub $1 today is the lowest its been since the darkest days of April 2020... ARV down 5% in the past year while HGH is down 35% - ARV in a bit of a grey area perhaps, but the days are pretty dark for HGH currently given cap raise was done at $1.00 just a few weeks ago... strange world indeed

Disclosure: sold out of ARV this year at $1.20

Good to hear from you tj.

Yes strange world indeed …how ARV and HGH share prices have performed last year or so is a bit spooky. I don’t think neither of us would have believed 99 cents today

I don’t think HGH is going to recover quickly …going to be dark times for shareholders for a while …maybe both will be sub $1 this time next year …or ARV might get a new life.

[Jenny Ruth]

Hi all. My latest 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

[Wai Wai]

And will they (Arvida) tell us why they hid the $1.70 bid from us?

[Greekwatchdog]

Full Year out.

• IFRS net profit after tax of $139m, up 69%
• Underlying profit[1] of $85 million, down 3%
• Gross value sales of $427 million, up 13%
• 201 new units delivered, including 144 villas
• Total assets of $4.2 billion, up 12%
• Gearing at 33.9%
• NTA at $2.05 per share


Retirement village operator Arvida Group Limited today announced a full year net profit after tax (IFRS) of $139 million and underlying profit for the year ending 31 March 2024 of $85 million. Results include the impact of record unrealised movements in the fair value of investment property.


Operating Performance
Commenting on the performance Arvida CEO Jeremy Nicoll said it was encouraging to see our business performance in the later part of the financial year starting to recover following a period of challenging property and macroeconomic conditions. High inflation, high interest rates and a slow residential property market had impacted cash flow generation from operations.


Good progress with revenue uplift and cost out strategies had been made during the year to improve cash flow and profit performance.


Mr Nicoll said, “We are making a concerted effort to reduce our operating costs, with firm internal targets. Operating efficiency initiatives identified an initial $10 million of annualised cost out benefits to be delivered in the coming financial year.”


“An equal effort has been placed on increasing our revenue sources from other than the sale of retirement village units. This resulted in improved revenues from a review of weekly fees, service packages and premium care charges.”


Mr Nicoll noted there was more work to be completed in this area with a plan to introduce an annual uplift mechanism for weekly fees for new residents this year. A number of initiatives are in progress that will simplify and deliver improved operational performance.


A recovery in care occupancy to 94% helped restore contributions from care operations. Arvida has been underway for a number of years with a strategy to build care capacity under the care suite model, with government funding of the aged-care sector remaining challenging. Arvida supports the government’s commitment to the future of aged care, with the recently announced select committee inquiry into the provision of aged care services and Health NZ’s current review of funding and service models.


Strategic initiatives to mature critical operational areas of the business progressed over the year. Implementation of the 3-year people strategy is lifting the culture and capability of Arvida’s team. It is pleasing to note that mid way through the programme the improvements are evident in increased team engagement, lower turnover rates, and greater retention of our experienced people.


“We have also once again delivered excellent results in our resident satisfaction surveys reinforcing that our value proposition remains strong for existing and incoming residents.”


“Notwithstanding the soft residential house market, we delivered a record sales performance reporting a 13% lift in the gross value of sales to $427 million, and a 11% increase in the number of units settled. We continue to experience record levels of applications,” Mr Nicoll said.


Unit prices on settled resales over the year were on average 4.7% higher than last year’s independent valuations. The capture and creation of embedded value is a key indicator of expected future cash flows. Over the year the embedded value increased to $1.3 billion, up 11%.


Capital Structure Preserved
The Board and management placed considerable focus on ensuring a robust framework continued to be applied to capital commitments and the preservation of headroom in Arvida’s capital structure.


Key priorities identified at the beginning of the year highlighted the critical importance of ensuring development commitments were managed to funding capacity limits and that cash returns from development activities were cash positive going forward.


The development programme was repositioned to reduce cash outflow, while also meeting a build target of delivering 201 new homes in the 2024 financial year. The majority of these deliveries were villas spread across six communities. A development milestone was reached with the completion of the final stage of 57 apartments and redevelopment of the Aria Bay site in Auckland.


In the year ahead, Arvida is targeting a build rate of 140-150 new homes, including the delivery of a new care suite and apartment building at the Queenstown Country Club community. The build rate has been reduced to balance the expected gross value from new sales against the costs incurred on construction.


“We are committed to building out our existing developments, where we continue to achieve development margins as new units are added. The immediate focus is on completing developments at our premium sites that have significant embedded value,” said Mr Nicoll.


The consented development pipeline grew over the year with the planned broad acre development at Lincoln achieving its resource consent through the Fast Track process. In total the future development pipeline comprises 1,877 units, with the majority from greenfield development activity.


Mr Nicoll said, "we continue to look for opportunities to expand our portfolio and grow our business.”


“A rigorous review of development return thresholds that are expected from any new greenfield project is applied. This means that we limit our development debt by ensuring the growth is fully funded by the recycling of capital from the sale of new units.”


Mr Nicoll said Arvida also implemented a dedicated development debt facility during the year to allow for growth to be debt funded within a framework while focusing on reducing core debt. To increase its capital structure headroom, core debt reduction initiatives totalling $200 million have been identified, in isolation. Initiatives include the sale of surplus development land from existing greenfield sites, reduction of stock held for sale, suspension of dividends and pursuing the insurance claim for losses sustained from the Auckland floods. Lower core debt will position Arvida to deliver a sustainable level of growth and dividends going forward.


Gearing at 34% remained within the Board’s target range and represented the lowest gearing of listed retirement sector peers. Total assets increased 12% from last year to $4.2 billion.


Settlement of the $30 million sale of Strathallan retirement village in Timaru occurred on 30 April 2024. The transaction was completed at a 1% discount to the 31 March 2024 valuation.


Value Recognition
The Board is underway with a programme to assess and execute a range of available options to accelerate the recognition of Arvida’s intrinsic value for shareholders.


“We are taking a balanced approach with a view to ensuring the interests of our shareholders, residents and team members are at the forefront,” said Arvida Chair, Anthony Beverley.


Arvida is well underway with an operating cost-out and revenue capture programme along with strategies to optimise the village portfolio, reduce core debt and balance development expenditure to generate cash returns.


With the assistance of advisors, Arvida is also considering a range of alternative options to accelerate value recognition that includes engaging with other market participants on various capital partnerships, restructuring options and strategic alternatives for the Company.


Mr Beverley, said “The programme is seeking to ensure Arvida is well positioned to maximise shareholder value on a standalone basis, as well as providing outstanding service to our many residents and keeping our team members fully engaged in delivering a quality retirement living experience.”


Arvida will keep shareholders and the broader market updated with progress on this important initiative, as and when appropriate.


While the valuation recognition programme is underway, the Board has paused the dividend policy, advising that no dividend has been declared for the second half of the 2024 financial year. While the dividend is suspended, the Board will consider a revised dividend policy, including alternative metrics for the determination of future dividends payouts.


Demand for retirement living remains strong supported by an ageing population tailwind. Arvida continues to be well positioned to benefit as market conditions improve providing outstanding resident experiences in retirement living and aged care.

[trader_jackson]

wow even in the worst of times (aka now) Underlying profit is only down 3% - and almost 40% ahead of Oceania and a third of the famed Ryman

[winner69]

Lots of positive words there eh greekwatchdog but an average result at best …like selling heaps more and making about the same.

Wonder what “With the assistance of advisors, Arvida is also considering a range of alternative options to accelerate value recognition that includes engaging with other market participants on various capital partnerships, restructuring options and strategic alternatives for the Company” really means

[Greekwatchdog]

Lots of positive words there eh greekwatchdog but an average result at best …like selling heaps more and making about the same.

Wonder what “With the assistance of advisors, Arvida is also considering a range of alternative options to accelerate value recognition that includes engaging with other market participants on various capital partnerships, restructuring options and strategic alternatives for the Company” really means

LOL yeah marketing gimmicks. Its solid given conditions.

Well they better come up with something to keep us shareholders happy after they didn't give us the $1.70 takeover offer.

[Filthy]

an average result at best

I dunno, looks like an above average 'pass' to me; reckon its a pretty good result in this market (all things considered). used to be the ugly duckling but now punters might see its actually not too bad eh TJ!

[winner69]

LOL yeah marketing gimmicks. Its solid given conditions.

Well they better come up with something to keep us shareholders happy after they didn't give us the $1.70 takeover offer.

…..and no dividend

[Balance]

…..and no dividend

And you have to search high and low, side way and back way to discover that there’s no dividend?

Bizarre!

[winner69]

And you have to search high and low, side way and back way to discover that there’s no dividend?

Bizarre!

Arvida always been a bit sneaky in their reporting …..maybe even better at it than Oceania

[winner69]

And you have to search high and low, side way and back way to discover that there’s no dividend?

Bizarre!

And the warm fuzzies by stating “Gearing at 34% remained within the Board’s target range and represented the lowest gearing of listed retirement sector peers.”

[Greekwatchdog]

…..and no dividend

Yeah that surprised me a little considering they paid half year. Anyway no issue, rather see them use it to pay the debt down

[Balance]

Yeah that surprised me a little considering they paid half year. Anyway no issue, rather see them use it to pay the debt down

Market consensus was for a final dividend of 2.1c to be paid. So market is going to be disappointed.

Given many shareholders were enticed into Arvida for its dividend income, the least the company should do is to highlight why dividends are being suspended/cancelled. And when they might be resumed.

Instead, there is only one mention of dividends and it's hidden in the maze of thousands of wordsin the main text of the announcement!



Commentary from interim results Nov 2023 :

"The Board has amended the dividend policy to a payout ratio of 30%-50% of underlying profit from 1 April 2023. Guidance is provided for FY24 dividend payments to be at the bottom end of the amended range.

Mr Beverley said this would ensure a better matching of stable free cash flows to distributions as the Company’s cash flow profile matures."

[Greekwatchdog]

Market consensus was for a final dividend of 2.1c to be paid. So market is going to be disappointed.

Given many shareholders were enticed into Arvida for its dividend income, the least the company should do is to highlight why dividends are being suspended/cancelled. And when they might be resumed.

Instead, there is only one mention of dividends and it's hidden in the maze of thousands of wordsin the main text of the announcement!



Commentary from interim results Nov 2023 :

"The Board has amended the dividend policy to a payout ratio of 30%-50% of underlying profit from 1 April 2023. Guidance is provided for FY24 dividend payments to be at the bottom end of the amended range.

Mr Beverley said this would ensure a better matching of stable free cash flows to distributions as the Company’s cash flow profile matures."

Market got it wrong didn't it. I hardly call ARV a divie stock, infact the RV's are lousy at it.

Actually I thought it was easy to pick up as there was no distribution notice attached to the announcement.

[bull....]

amazing arv must be cash strapped , wanting to sell up , rationalize , bring in partners :scared: cut div .................. conserving cash biggly :scared: merge :scared:

[winner69]

amazing arv must be cash strapped , wanting to sell up , rationalize , bring in partners :scared: cut div .................. conserving cash biggly :scared: merge :scared:


No doubt saying things like that opens them up for a lot of speculation eh bull.

Again this result doesn’t live up to the hype ….and disappoint many again

[bull....]

No doubt saying things like that opens them up for a lot of speculation eh bull.

Again this result doesn’t live up to the hype ….and disappoint many again

reflection of the cash crunch in RV land which is only going to get worse if property market falls more. some might even fold under that senario

[allfromacell]

reflection of the cash crunch in RV land which is only going to get worse if property market falls more. some might even fold under that senario

The shares are trading at such a discounted price that ironically shareholders would probably come out OK in a liquidation event...

Especially considering successful sales of several care intensive facilities have been taking place recently at above book value.

[ValueNZ]

The shares are trading at such a discounted price that ironically shareholders would probably come out OK in a liquidation event...

Especially considering successful sales of several care intensive facilities have been taking place recently at above book value.
ARV mentioned on the conference call that everything was on the table, including the sale of company.

No market reaction to this information, maybe I just misheard... Is anyone able to find a transcript?

[Baa_Baa]

ARV mentioned on the conference call that everything was on the table, including the sale of company.

No market reaction to this information, maybe I just misheard... Is anyone able to find a transcript?

And to think they turned down a $1.70 offer for the company not too long ago. Sounds all a bit desperate for ARV.

[Greekwatchdog]

And to think they turned down a $1.70 offer for the company not too long ago. Sounds all a bit desperate for ARV.

Rich in Irony for mine. Easy targets at the ASM

[bull....]

these takeover offer's are usually sh.it offers never intended to be carried out is my thinking. to many conditions attached to make it that way
probably used by someone to ditch there stock on the pop

[Wai Wai]

Given an NBIO was received last year at $1.70 and directors are now cancelling the dividend to enhance the “capital recognition program” shareholders might appreciate directors giving up their fees as additional help towards the "recognition program", thus aligning themselves with the shareholders for whom they hold agency (rather than themselves)?

[nztx]

amazing arv must be cash strapped , wanting to sell up , rationalize , bring in partners :scared: cut div .................. conserving cash biggly :scared: merge :scared:


What - did someone miss arranging the credit line for the final div or was it a look over the fence to see what excuses the others in the sector were using this time round for not stumping up a small dividend ? ;)

[Greekwatchdog]

For Bars take..


After the kerfuffle of Ryman Healthcare's (RYM) result, Arvida Group's (ARV) result provided only incremental news and mostly good news. ARV set out an ambition to close what it considers a major gap between the market's perception of its value (~0.5x net tangible assets) and its own view. The strategy consists of: (1) leave no stone unturned to reduce core debt, (2) look for potential capital partners and other strategic options, and (3) review pricing and reduce costs. All sensible steps, and we walk away encouraged that ARV is through the worst. The result itself was slightly below our expectations, driven by higher costs and slightly lower care revenues, but announced cost savings and robust resale margins drive minor increases in our estimates over the medium term. Like the rest of the sector, ARV has built substantial debt over the last few years. In a similar vein to Oceania Healthcare (OCA) and RYM, ARV gave a clear signal that the direction of travel for net debt from here is down. ARV has identified initiatives to reduce core debt to the tune of ~NZ$200m, the majority of it to occur in FY25. We reiterate our NEUTRAL rating with an unchanged target price of NZ$1.30.


What's changed?
Earnings: Annuity EBITDA +2% across FY25–27, underlying earnings increased more in FY25/FY26 on higher new sale gains.
Exploring strategic alternatives with a focus to reduce net debt
ARV's management and board has taken the widening discount to NTA (~-50%) as a call to arms and outlined a plethora of options to close it. The common theme was to reduce debt in general and core debt (not directly used for development) in particular. We believe the focus to reduce debt is the right one. In the short term, ARV guided to a combination of collecting deferred settlements, the prior announced sale of a village, insurance proceeds, and land sales, to make a meaningful dent in its debt. ARV also outlined numerous strategic options, the most tangible (and in our view interesting) was to sell a majority stake in a group of villages to a capital partner and continue to manage the villages (for a fee) as a minority share holder. Given ARV's and OCA's experience of selling non-core aged care assets at or around book value in the current environment, we believe this idea has potential.


The aged care sector appears to have turned the corner; less debt, improving care profitability and stable resales margins
For the first time in three years we have upgraded our like-for-like earnings on all three aged care companies (with March year ends). For RYM this was clouded by the multiple accounting changes and revelations, but for OCA, ARV and RYM we have increased our annuity EBITDA estimates on a like-for-like basis. The upgrades primarily relate to resales and care revenues, both of which have come in strong. Slightly offset by higher costs. The debt build up has also slowed materially. That is not good enough, but we now forecast all three of these companies to reduce debt in FY25.

[bull....]

might be on the brink of big decline in to the 80s :scared: if that triple bottom dont hold

[troyvdh]

Thankyou bull.
The thing is though...what is the rationale of those selling..surely at a loss.


I would like to think that investment in the SM ..and in retirement entities is to accumulate wealth....
I just dont get it.

[bull....]

Thankyou bull.
The thing is though...what is the rationale of those selling..surely at a loss.


I would like to think that investment in the SM ..and in retirement entities is to accumulate wealth....
I just dont get it.

1 reason may be is probably cause they think they might lose more ? or they need money else where ... who knows but cashflow is tight for these property developers

[bull....]

might be on the brink of big decline in to the 80s :scared: if that triple bottom dont hold

we are sitting on the edge now ... of the cliff ?

[winner69]

we are sitting on the edge now ... of the cliff ?

No way will ARV go back to 80’s bull

Too good a company with good near term prospects for that to happen

’saying that is like saying OCA will head back to the 40’s

[Perky]

I’m wondering what the $1.70 buyer is thinking or more importantly doing….45% off sale…just like a briscoes sale

I hold a few of these

[mike2020]

Was the offer ever made on paper? Talks cheap. IFT had an approach at one point when it was well back under $10 , maybe 8? but they said it was never addressed because they never put it to paper just talk.

Anyway that shows how a quick profit can cost you long term.

[Perky]

No idea..but next ARV agm will be worth the popcorn fee. I’m sure the question will be asked

Maybe the buyer is waiting for the end of winter 60% off their offer price sale

[Balance]

I’m wondering what the $1.70 buyer is thinking or more importantly doing….45% off sale…just like a briscoes sale

I hold a few of these

The directors did not even enter into discussions with the potential bidder as they consider the $1.70 meaningfully undervalued the company!

Would have been all water under the bridge with shareholders non the wiser except that word started spreading that there was an offer.

https://www.arvida.co.nz/investors/nzx-releases/release/arvida-confirms-it-is-not-considering-acquisition-approach-32172

[winner69]

The directors did not even enter into discussions with the potential bidder as they consider the $1.70 meaningfully undervalued the company!

Would have been all water under the bridge with shareholders non the wiser except that word started spreading that there was an offer.

https://www.arvida.co.nz/investors/nzx-releases/release/arvida-confirms-it-is-not-considering-acquisition-approach-32172

Shareprice was in 120’s back then ……..painful since

[Balance]

Open kimono by Ryman's Chairman on what happened - lots of smoke and mirrors in the past and finally reality.

Arvida has joined Ryman in facing reality (to a certain extent - still more downside yet).

Oceania is waiting for a new CEO to do a clean up.

https://www.youtube.com/watch?app=de...e8Ju2JRICXmEuz

[winner69]

we are sitting on the edge now ... of the cliff ?

Clinging on bull ……to the 90’s that is

[bull....]

Clinging on bull ……to the 90’s that is

at the moment but new lows coming :scared:

[bull....]

Clinging on bull ……to the 90’s that is

back to 90 again , maybe the dam will collapse this week

[winner69]

In the 80’s bull

Only temporary eh

[bull....]

In the 80’s bull

Only temporary eh

yep that breakdown below 90c if it holds is big news. 78c was a pivot from back in 2015

[winner69]

yep that breakdown below 90c if it holds is big news. 78c was a pivot from back in 2015

Jeez 78 cents would be pretty bad

They need to produce another Investor News pronto

[Scroogeus]

A question IF you wanted to buy either for long term would you buy Arvida or Oceania at the tempting prices they are now.
I don’t need to know not to buy either, but which one makes the best investments in you ur opinion.

[Scroogeus]

A question IF you wanted to buy either for long term would you buy Arvida or Oceania at the tempting prices they are now.
I don’t need to know not to buy either, but which one makes the best investments in you ur opinion.

[winner69]

Bull, crisis over ….share price back to 90’s

[bull....]

A question IF you wanted to buy either for long term would you buy Arvida or Oceania at the tempting prices they are now.
I don’t need to know not to buy either, but which one makes the best investments in you ur opinion.

what research you done so far ?

[Mrbuyit]

Wife and I went for a nosey around Arvidas Te Puna Waiora on the outskirts of te Awamutu.
Progress looks pretty decent and the at some are the villas had pot plants outside. (Didn't count them sorry maverick)

They are doing a decent job of how the builds are being phased and the fenced off area which is still under construction, it doesn't detract or intrude too much from the completed units.


If I was a rich oldie I think it'd be a pretty decent place to reside, with many of the villas having quite a nice view of mount pirongia. Unsure of pricing or how sales are actually going though..
One observation, it's not on a bus route as far as I'm aware, and taxis are pretty scarce so maybe they'd need to offer some sort of shuttle to town. (Maybe they already do)

[Greekwatchdog]

I am starting to wonder if the Pivot yesterday by Orr signaled the bottom ($0.88) for ARV and the rest of the RV's. Certainly looks like it, time will tell I guess

[Scroogeus]

Looking at information, I would put ARV ahead, but long term you could purchase just under double amount shares at .94 ARV to .52 OCA, was just interested what the experts per Sharetrader thoughts are.
I do hold shares in both.

[Greekwatchdog]

Looking at information, I would put ARV ahead, but long term you could purchase just under double amount shares at .94 ARV to .52 OCA, was just interested what the experts per Sharetrader thoughts are.
I do hold shares in both.

I hold 2 time more OCA ($0.60 Avg) than ARV ($0.90 Avg) Always been a long term hold for me.

[Scroogeus]

I’m not quite as good as your trading, but if you or others were buying more which company, ARV or OCA ?

[Greekwatchdog]

I’m not quite as good as your trading, but if you or others were buying more which company, ARV or OCA ?

I had a bit of luck with timing as I did very well on ATM and then sold, then Covid hit and there was a fire sale.
I have always believed these were bottom draw holds and add when I thought there was value. Its been a game of patience these last 2 years but I firmly believe we have hit the bottom.

DYOR as it is your money, however the demographics of retirees coming is a tsunami. Also you need to work out how long you are in for.

Everyone has there own Investment Philosophy, short, momentum or long term, decide what you are.

[winner69]

Bull ….. RB pivot saw ARV in favour today and a close at 95 cents

We’ll never see the 80’s again eh

[Mrbuyit]

Maybe a bit of both oca and arv could be a option. Probably not going to set the world on fire in the short term.

I have been accumulating both oca and arv in the last little while, time will tell if it does any better than the most recent term deposit I locked in this month.

[Daytr]

Wife and I went for a nosey around Arvidas Te Puna Waiora on the outskirts of te Awamutu.
Progress looks pretty decent and the at some are the villas had pot plants outside. (Didn't count them sorry maverick)

They are doing a decent job of how the builds are being phased and the fenced off area which is still under construction, it doesn't detract or intrude too much from the completed units.


If I was a rich oldie I think it'd be a pretty decent place to reside, with many of the villas having quite a nice view of mount pirongia. Unsure of pricing or how sales are actually going though..
One observation, it's not on a bus route as far as I'm aware, and taxis are pretty scarce so maybe they'd need to offer some sort of shuttle to town. (Maybe they already do)

The village in Kerikeri has a launch with a skipper that can take residents out for a fish or to the Duke for lunch. Great idea.

[bull....]

Bull ….. RB pivot saw ARV in favour today and a close at 95 cents

We’ll never see the 80’s again eh

my caveat in my stsement was if it holds below 90c. support was maintained hence the bounce. another caveat is t/a suggest the more time a line of support is tested it eventually breaks. time will tell.

[Daytr]

Maybe a bit of both oca and arv could be a option. Probably not going to set the world on fire in the short term.

I have been accumulating both oca and arv in the last little while, time will tell if it does any better than the most recent term deposit I locked in this month.

RYM was the option.
I was soooo close to pulling the trigger at $3.42!
Doh!

[winner69]

Picket line at Village at the Park

Job cuts coming and people not happy


https://wellington.scoop.co.nz/?p=162467

[bull....]

Picket line at Village at the Park

Job cuts coming and people not happy


https://wellington.scoop.co.nz/?p=162467

prob happen at all of the RV stocks soon. anyway arv might go into trading range since 90c held touched 1.20 odd a few times as well 90 - 1.20

Service robots in nursing homes


https://www.youtube.com/watch?v=dx0zxr3D_zU

[tim23]

prob happen at all of the RV stocks soon. anyway arv might go into trading range since 90c held touched 1.20 odd a few times as well 90 - 1.20

Service robots in nursing homes


https://www.youtube.com/watch?v=dx0zxr3D_zU
Story in Herald refers to ARV as 4 billion $ company- I wish!!

[Leemsip]

Holy smoke

buy out at $1.70
https://www.nzx.com/announcements/434816

[winner69]

Yep they get the $1.70 this time around

Well done to those that remained loyal

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARV/434816/423098.pdf

[Sideshow Bob]

Likely another company gone off the NZX.....

Don't worry, plenty more lining up!!

[Greekwatchdog]

Yep they get the $1.70 this time around

Well done to those that remained loyal

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ARV/434816/423098.pdf

Yes thanks W69. A bit of a joke. NTA goes up since late last year when they disclosed they had rejected an offer then accept the same valued offer today. The Board and CEO haven't got a clue.

[allfromacell]

Depending on how the other RVs rerate will depend on how I vote.

If they rerate to a similar valuation I'll vote NO. If not I'll vote YES (and purchase RYM / OCA)