Luckily your feelings have nothing to do with anything!
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Well total receipts since 2017 is ~$1.3B. Refunds total ~$428M.
So OCA have built up ~$870M what you call "float" (lol) over the last 8 years.
Quote:
Receipts from Occupation Rights Agreements
- 2017: NZD 68,763,000
- 2018: NZD 113,517,000
- 2019: NZD 136,629,000
- 2020: NZD 181,298,000
- 2021: NZD 171,387,000
- 2022: NZD 214,188,000
- 2023: NZD 178,842,000
- 2024: NZD 226,313,000
Payments for Outgoing Occupation Rights Agreements
- 2017: NZD 30,894,000
- 2018: NZD 35,421,000
- 2019: NZD 39,656,000
- 2020: NZD 40,341,000
- 2021: NZD 52,157,000
- 2022: NZD 69,998,000
- 2023: NZD 79,267,000
- 2024: NZD 78,780,000
About $80M (9%) of that has gone toward paying interest on the bank loans.
Now, we know that OCA has struggled to earn a living, as its all about the float and the future prospects. Well, the dividends paid to shareholders have to come from somewhere right? Trust ORA to the rescue again.Quote:
Interest Payments by Year
- 2017: NZD 3,701,000
- 2018: NZD 6,524,000
- 2019: NZD 7,351,000
- 2020: NZD 7,537,000
- 2021: NZD 9,326,000
- 2022: NZD 10,851,000
- 2023: NZD 14,366,000
- 2024: NZD 20,013,000
Note: huge escalation in borrowing costs since 2022. Understandably a concern
~$152M (17%) paid out to shareholders in divvies.
The amount of money OCA can book each year as resident fees is less than how much they need to pay their suppliers and employeers.Quote:
Dividends Paid by Year
2017
- Total Dividends Paid: NZD 0 (No dividends were declared in 2017)
2018
- Total Dividends Paid: NZD 12,732,000
2019
- Total Dividends Paid: NZD 28,682,000
2020
- Total Dividends Paid: NZD 29,904,000
2021
- Total Dividends Paid: NZD 15,559,000
2022
- Total Dividends Paid: NZD 29,315,000
2023
- Total Dividends Paid: NZD 29,924,000
2024
- Total Dividends Paid: NZD 6,763,000
The shortfall over the years? Approximately $100M (11%).
Over this period the CEO and Board have been paid ~$10M.Quote:
Receipts from Residents for Village and Care Fees
2017
- Receipts from Residents: NZD 129,382,000
2018
- Receipts from Residents: NZD 154,865,000
2019
- Receipts from Residents: NZD 165,693,000
2020
- Receipts from Residents: NZD 151,347,000
2021
- Receipts from Residents: NZD 132,780,000
2022
- Receipts from Residents: NZD 190,096,000
2023
- Receipts from Residents: NZD 196,601,000
2024
- Receipts from Residents: NZD 207,911,000
Payments to Suppliers and Employees
2017
- Payments to Suppliers and Employees: NZD 121,805,000
2018
- Payments to Suppliers and Employees: NZD 147,439,000
2019
- Payments to Suppliers and Employees: NZD 164,829,000
2020
- Payments to Suppliers and Employees: NZD 153,328,000
2021
- Payments to Suppliers and Employees: NZD 145,324,000
2022
- Payments to Suppliers and Employees: NZD 207,814,000
2023
- Payments to Suppliers and Employees: NZD 228,926,000
2024
- Payments to Suppliers and Employees: NZD 259,616,000
Net Difference (Total Receipts - Total Payments)
- Net Difference: NZD -$100M
I could dig in further, adding up lease payments etc, but that all totals up to ~$342M of ORA money just propping up the house of cards.
So about 40% of the ORA money has gone towards running the business (since it does not produce enough income to pay its own way) and dividends.
Where indeed has all the money gone Bob? Hmmmmn.
The rest ($500M) has undoubtably gone towards overpaying for land and building costs.
An of course, how much assets have increased.
Based on the Warren Buffet videos that people have been posting then maybe treat depreciation as a cash expense also.
Logic was that cash is invested into Capital assets. Those assets need to be replaced at some stage. So the depreciation is actually a real cost.
Of course it's all open for debate. But that was his logic.
I would agree with this, as depreciation is absolutely a real cost. Particularly when you are in the business of owning real estate.
So add another $100M of costs funded by ORA for good measure.
So OCA has used at least $460M of ORA propping up the house of cards. In other words, 53% of the ORA "float" has gone up in smoke.Quote:
Depreciation by Year
2017
- Depreciation: NZD 7,706,000
2018
- Depreciation: NZD 8,694,000
2019
- Depreciation: NZD 9,007,000
2020
- Depreciation: NZD 11,717,000
2021
- Depreciation: NZD 11,225,000
2022
- Depreciation: NZD 15,440,000
2023
- Depreciation: NZD 15,185,000
2024
- Depreciation: NZD 18,485,000
of Total Depreciation
- Total from 2017 to 2023: NZD 97,459,000.
The other $400M was spent on overpriced property.
Nice.
Totally. I have a few rental properties and to keep them at the standard I purchased them at I need to spend money. That's depreciation.
Depreciation, although a non-cash accounting item, is a real cost to the business and will have to be borne (by cash) at some stage.
For sure. Which is why Charlie often referred to EBITDA as "bullsh1t earnings".
I think this kinf of cashflow analysis goes a long way to explaining why the market has priced these operators the way it has.
Certainly in OCA's case, the company has been living beyond its means from the get go and has only been able to do so because it charges its rent up front and then essentially amortises it over time with DMF.
So all this excitement about "float" and the rest evaporates when you consider where most of it has been squandered.
That does not mean brighter days are not ahead, that companies like OCA will not be worth more in the future.
How much more they might be worth will depend on a number of factors, including how effective they are at getting a handle on their high debt levels.
With an Enterprise Value of ~$1B at the moment, it is hard to argue that Mr Market has 'got it all wrong' right now.
Appreciate that these posts should probably be on the OCA thread :scared: