I've got Optimus Prime on speed dial to deal with that decepticon scumbag Omicron if need be.
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A post (above) from July 2020
I appreciate that people (or dogs even) are allowed to revise their opinion as market conditions evolve. And I don't disagree with Beagle's latest assessment (above). But one thing that is puzzling me is the joining of the dots between the July 2020 position and today. The elderly homeowner, on the cusp of moving into care, is on paper up to 40% better off today if they convert their house to cash. So, on paper, there should have been plenty of money to move from their house to a 'premium' care unit which OCA are specialising in. And IIRC I was told that though there are rich all over the country, there are so many multi-millionaire home owners in Auckland, that the construction of entire 'premium' villages is viable, and OCA are the ones best positioned to benefit.
So what happened?
SNOOPY
Hi Snoopy,
I think much has already been explained but obviously the pandemic has dragged on and on and the cost of providing care services has far outstripped Earl's representations made as recently as Feb 2021 wherein during the call when he responded to a question from one analyst regarding how they should think about the cost of care going forward and he said that he believed it would move up in line with MOH funding, or words very close to that effect. I don't think some of the analysts on the call on Monday are very impressed to now see care costs rising at 9% per annum ! Its rather convenient for Earl he's not here to face the music.
Therefore I am not surprised to see analysts pulling back their forecasts...first indications are starting to come through some are not impressed. Average target price before the result was $1.71 and is now $1.64 and may reduce a little more once all the revised forecasts are in
https://www.marketscreener.com/quote...268/consensus/
Obviously being in dispute with MOH for 4.8% of extra costs they're not funding is a real headwind to the business, until its resolved.
To me from comments across the sector by OCA and other operators, MOH are simply not funding the extra costs imposed on care business's by Covid and that seems egregiously unreasonable considering quality health care providers are doing an awesome job of protecting the elderly and vulnerable.
In a quieter moment I sometimes ponder if we're headed towards a situation where the MOH underfunding will become so chronic that if you want quality care you'll be forced to buy a care suite ? I wonder in due course once OCA have achieved their targeted 70:30 premium / basic care transformation whether they'll keep going and ultimately almost completely transform to only a premium care suite and independent living unit business model and get out of basic care altogether ?
There is clearly more money to be made with independent living units. I am not sure if my recollection is that good but I think originally when they acquired the new full feature village at Waterford in Hobsonville they were going to add a whole bunch of care suites but I noted in the presentation the other day they are planning for 50 more independent living apartments. I might be over or misinterpreting this but I am encouraged by what I see as perhaps a subtle shift in focus towards more independent living units.
Finally, June 2020 is a long time ago my friend. Everyone needs to be agile and on their toes to navigate this difficult market.
Disc: Holding a modest sized stake.
Another little climb today.....
If there was not a cure to aging on the horizon then I wouldn't want to check in to places such as this.
Keep the inheritance intact, spend my final year in a motorhome going up and down NZ for a couple of years, eating what I want etc. Would be a better situation.
Yes, but when you are not very mobile, perhaps incontinent, or losing your mind a little, aches and pains, problems with balance, you have no other alternative. You are not like wine, humans always get worse with age. Some worse than others. Perhaps you will be one of the extremely lucky ones. But after your couple of years on the road, then what.