75c and end of trading.
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75c and end of trading.
You actually believe their forecast ? Don't you think its a little odd they'd bring this to market so close to their end of year for 31 May 2017 ? Guess why ? So they can say, look, we got that forecast right. It's the 40% growth in underlying earnings for FY18 that I for one am taking with a grain of salt. Call me a hardened cynic if you like, I don't honestly care but they've been trying for years to float this thing and if they hadn't of forecast 40% growth nobody would have been interested.
Huge vested interest to make that FY18 growth forecast ! Tegal or Feltex Mk2 in my opinion.
Flat growth for FY2017 and *forecast* growth of 40% for FY2018... sounds nice, hope they can pull that off.
Will wait for the IPO buzz to die down before putting any money down for the long run.
Huge effort required to maintain wages to revenue ratio below the ideal percentile, especially since extra money to pay Nurses and other staff to line up with caregivers increase will squeeze their profits further. Developing their sites will help in the future but not over the next year.
When you look at Tegal or Feltex, they had a few problems, but mainly: the market they were in had 'questionable' dynamics, and their product was very much the same as other products they were directly competiting against. (I won't bother talking about debt levels, or the fact they were a quick flip PE)
OCA is different.
Their villages are high quality, they have great locations, and the market around them is favorable... yet like ARV, everybody is sceptical if they can make it work. I agree with part of this scepticism, there are somepoints I don't 'like' either.
I am not sure it is good to get harp on about how impossible this 40% growth forecast... because before this growth, they forecast negative growth, for good reasons as well. (I won't bother going into how ARV beat both IPO forecast profit, and had triple digit growth from FY15 to FY16)
OCA are currently trading at just 14.7 Underlying NPAT, with FY18 underlying NPAT of just 9.6... even if they had no growth and missed their forecasts by miles, they are still the cheapest in the sector today, and paying a dividend well above a bank term deposit rate.