Hey Mav - that cash flow chart you posted not long ago
Hard to read the numbers but what you had for H223 seemed pretty close to what happened. Is that so?
So we can look forward to a +ve number in H124 eh
Printable View
Hey Mav - that cash flow chart you posted not long ago
Hard to read the numbers but what you had for H223 seemed pretty close to what happened. Is that so?
So we can look forward to a +ve number in H124 eh
I saw that too and it had me scratching my head. As you say new sales "drives the bus". It could be they are trying to get to free cashflow without those sales given such proceeds MUST be paid off the development loan facility. But if that is the case, then they should also back out any such borrowings under that same facility to be consistent in their analysis.....which feels like two adjustments too many. The outstanding balance on the development facility bears some relationship to the value of unsold new stocks so it is still a relevant number, as is the cash flow value of new sales. Unless I am seriously misunderstanding something. Conceptually those CIP adjustments don't sit well with me, but I admit I have not dived deep enough into their report.
Yes, I think they are analysing it mechanically like they have been taught without seeing the big picture. Missing the forest for the trees. I will do some more work.
I also read their Agrosy report and I am certain that they are messing that one up, the OCA report they say you cant eat NTA and cash flows are an issue (when clearly they are not, just their definition of cash flows are) And Agrosy where cash flows are a REAL issue, they just look at earnings and all is good.
Then the My food bag analysis is great, conservative and balanced... but then the same analyst has been pumping it since $1.85. So what he was thinking/seeing back then god knows.
Hi Winner , my expectations (using my own parameters as laid out previously) for the 2HY23 was -$39m and we got -$43m. So close enough. They undersold unit volumes but offset somewhat by high sale prices and lower cooperate cost increases.
So your question about forward cashflow going positive 1HY24 as per that graph I posted recently. ..Yes they will.
What's has changed though makes any future cashflow projections highly unpredictable and rather pointless.
There's been a raft of changes;
1. Reduced dividend payout.
2. Assets being held for sale. 2 being near sold , who knows about the remaining assets timeline.
3. Future sales of there MASSIVE pantry of unsold stock. We are only guessing when this flood gate of cash and profit opens ( IMO before Christmas ).
4. Capex is now heading to zero from $80m/HY within 2 years. That's how long they need will need to finish all their work in progress.
All of these factors are fully controllable by OCA. The evidence in this report says they have throttled development to suit the current environment . They are being defensive right now as any property developer should but they can turn on a dime and reramp development when they choose to.
You might have noticed they haven't started a single new development this last HY.
So to sum up. They are in complete control of cashflow and there is no issue whatsoever of a problem upstream. They will be cash flow positive 1HY24 if they stay on this course with only further upside should sales pick up to more normal rates of turnover.
BTW Sailor and Ferg, loving your thoughts and commentary.
Appreciated Mav, I thought you had said that the Craigs report summed things up well. Perhaps you just meant the issues they highlighted that have been and are facing OCA of late.
So you do see things playing out from here differently than the Craigs analyst, particularly on their detailed number set going out to 2026?
So clear the directors (and the bean counting CEO) decided to go for asset sales rather than a CR in the interim.
So much for the growth strategy but wait, the company continues to pay dividends using debt and while bleeding cash from its operations (refer Craigs).
Sounds like you fellows should put on a short position.
I do think Craig's and Forbar have a very good handle on the company's fundamentals now.
The problem with projecting anything currently is that it all hinges on the property market turnover so much. The property market has been, and is, so dynamic that " positioned for growth" is still very true while for now they are only achieving a "solid result".
My workings of the next 6-12 months underlying profit is slightly over Craig's using this current dead property market metrics. Their other Craig's figures are good enough but key metrics will swing wild from here- with NZ property sales- depending on what happens next making it meaningless to fixate on them to much for now.
"Positioned for growth" is very much alive and in the waiting but its realization is solely set by when the property market turnover resumes to more normal times. Then the powder keg of stock will unlock significantly - but when? that's the guess work that matters most that no one knows until afterwards.
OCA have performed "solidly" in awful external circumstances to date. The potential for FY24 underlying profit is in the range of up 15% -45% depending on if this existing market continues as is or returning to normal NZ property turnover ( that's not prices , its just volume that they need). The swings are that large on a factor so seemly small.
Here`s a fun fact for ya to demonstrate that OCA isn't doing as badly as the share price says- based on actual underlying profit.
If OCA was valued on the same PE at its peak of $1.58 it would today be trading at $1.66.
Easy to do some dreaming and consider that when they get FY24 15%- 45% U/profit rise AND the mood of the market even slightly improves to a pathetic PE of 13 ( currently 8.9) just how much upside lays ahead. My analysis sees virtually zero downside EPS risk to the model from here other than a catastrophic external event, but significant upside when property turnover returning to normal. ( IMO that turning is beginning now)