No doubt saying things like that opens them up for a lot of speculation eh bull.
Again this result doesn’t live up to the hype ….and disappoint many again
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these takeover offer's are usually sh.it offers never intended to be carried out is my thinking. to many conditions attached to make it that way
probably used by someone to ditch there stock on the pop
Given an NBIO was received last year at $1.70 and directors are now cancelling the dividend to enhance the “capital recognition program” shareholders might appreciate directors giving up their fees as additional help towards the "recognition program", thus aligning themselves with the shareholders for whom they hold agency (rather than themselves)?
For Bars take..
After the kerfuffle of Ryman Healthcare's (RYM) result, Arvida Group's (ARV) result provided only incremental news and mostly good news. ARV set out an ambition to close what it considers a major gap between the market's perception of its value (~0.5x net tangible assets) and its own view. The strategy consists of: (1) leave no stone unturned to reduce core debt, (2) look for potential capital partners and other strategic options, and (3) review pricing and reduce costs. All sensible steps, and we walk away encouraged that ARV is through the worst. The result itself was slightly below our expectations, driven by higher costs and slightly lower care revenues, but announced cost savings and robust resale margins drive minor increases in our estimates over the medium term. Like the rest of the sector, ARV has built substantial debt over the last few years. In a similar vein to Oceania Healthcare (OCA) and RYM, ARV gave a clear signal that the direction of travel for net debt from here is down. ARV has identified initiatives to reduce core debt to the tune of ~NZ$200m, the majority of it to occur in FY25. We reiterate our NEUTRAL rating with an unchanged target price of NZ$1.30.
What's changed?
Earnings: Annuity EBITDA +2% across FY25–27, underlying earnings increased more in FY25/FY26 on higher new sale gains.
Exploring strategic alternatives with a focus to reduce net debt
ARV's management and board has taken the widening discount to NTA (~-50%) as a call to arms and outlined a plethora of options to close it. The common theme was to reduce debt in general and core debt (not directly used for development) in particular. We believe the focus to reduce debt is the right one. In the short term, ARV guided to a combination of collecting deferred settlements, the prior announced sale of a village, insurance proceeds, and land sales, to make a meaningful dent in its debt. ARV also outlined numerous strategic options, the most tangible (and in our view interesting) was to sell a majority stake in a group of villages to a capital partner and continue to manage the villages (for a fee) as a minority share holder. Given ARV's and OCA's experience of selling non-core aged care assets at or around book value in the current environment, we believe this idea has potential.
The aged care sector appears to have turned the corner; less debt, improving care profitability and stable resales margins
For the first time in three years we have upgraded our like-for-like earnings on all three aged care companies (with March year ends). For RYM this was clouded by the multiple accounting changes and revelations, but for OCA, ARV and RYM we have increased our annuity EBITDA estimates on a like-for-like basis. The upgrades primarily relate to resales and care revenues, both of which have come in strong. Slightly offset by higher costs. The debt build up has also slowed materially. That is not good enough, but we now forecast all three of these companies to reduce debt in FY25.