Just wondering - did you read note 4.4 of the annual report before making your statement? Only roughly 1% of the $380m borrowings are "current", the reminder is not. So - why would they need more cash to cover the "current" $3.2 m in liabilities?
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Financials as at 30 Sept 2022 :
http://nzx-prod-s7fsd7f98s.s3-websit...826/384012.pdf
Note 4.3 Bank development facility $265m
Drawn $165m
Undrawn & Available (subject to no breach of covenants 'a' to 'd') $100m
Note 5.3 Development commitment $160m
Let that sink in first.
More later.
we are talking total debt , anyway read the arv announcement on ther bank facility announcement and you will see the banks gave them more headroom on there debt to ebitda for a few more period's
now you can see why people selling oca last week and going into arv in the last week
arv up 5%
oca down 5%
oca have to do similar or raise cash in my mind and it all ties in with for-bar saying all the rv will now slow development and pay down debt
“If you tell a lie big enough and keep repeating it, people will eventually come to believe it.”
Joseph Goebbels.
I'm not saying anyone here is lying but you get my point
After a month of this capital raising fear thing being tossed around relentlessly it is starting to feel like fact…just maybe it actually is. I thought it was time to absolutely put this to bed , for my mind at least, and do some real work to prove whether this is actually a thing or not.
I've made a spreadsheet that draws from my main work. My main body of work has evolved over 5 yrs now and incorporates every scrap of information out there supplemented with countless site visits, blah blah. These s/sheets and projections have now become a very reliable source of everything OCA to draw from meaning they can be trusted on for exercises like this.
It isn't easy using OCAs own published cashflow numbers over the years as they too have evolved making their reporting unsuitable to simply "plug and play" YOY. Plus the main point of this exercise requires adding accurate forecasting of sales -rates and values
My simple cash flow (HY) set up is as follows;
- add-new sales and resales ORAs
- add-all other cash incomes (DHB fees , PAC fees, village fees, their school income etc)
- less- all cash expenses ( wages, maintenance etc)
- less-old ORA payouts
- less-finance costs
- less-Dividends
- less-Capex
Note: to keep it simple I have not included;
-New loans,
-Bond issues,
-Acquisitions of other businesses or paddocks,
-Buy backs- which they used to do but have completed now.
Key assumptions looking ahead;
-New deliveries now take 4 x HY to sell down.( Used to be 3)
-Average Helier price assumed is $2.1m. The other deliveries are known.
-Helier does actually welcome in residents this HY.
-Capex will maintain at $80m/HY.
This is a simple graph but in my mind accurate projection of what OCA needs as cash to keep doing its building program and existing operations at its current level. These workings do not consider any future acquisitions or capital changes which are obviously discretionary.
The graph is pasted below .
It is clear that in 1hy24 ( the period we are currently in) the cashflow goes to neutral for the very first time, and holds there. As Brent stated , we are in about peak OCA debt now and the behemoth Helier will finally reverse the cash flow drain it has been for so long now.( not exactly his words but that's the jist)
For me, it is a clear answer that OCA does NOT need to raise capital for the foreseeable future unless it intends going on a buying spree.
It appears the CFO and her team have done a great job that these numbers work out to almost perfection for their current ambitions.
It also demonstrates, as we have now experienced , just how slow and capital intensive brownfield and apartment building really is to get to the pay back phase.
Also on a positive note, it demonstrates that should OCA stop its $80m capex/HY program they would be rolling in surplus cash henceforth.
More clear good news is that we are at the cash flow inflection point.
( also in my workings , but not shown here , underlying profit also shoots up too this HY onwards).
So as far as I'm concerned , OCA has managed their cash flow very well and there will be no capital raise needed.
Attachment 14545
Mav. good work. Admire people who love doing this sort of work. Keep at it
That is an incredible turnaround / change in fortunes you paint a picture off
Hope it all turns out that way
I really appreciate that Winner coming from you. Yes I do love doing this kind of work but crickey it takes a very large effort.
Some do wonder why I do share this stuff here, which I would like to comment on.
-Firstly it motivates my full effort as others will quickly spot faults if I'm tardy or half arse with my research.
-Then the other reason is this is OUR community and it will only thrive if we all contribute GOOD value where we can in our own areas of expertise.
- ah yes...People only really watch the share price anyway so this stuff isn't really that helpful to most folk anyway...haha ...
I am super grateful for the many reports and links from friends here behind the scenes and it is respect for them that I publicly table my work rather than being exclusive through private messages( although that does go on of course - as it should).
So thanks to all you folk who send me your stuff. Its very helpful and I really appreciate it.
Yes great Mav shares his work with us.