Will be interesting to see how well they manage capital, they have more than enough facilities to invest in.
Doubt we will see 40% being hit.
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SUM directors under the pump at the annual meeting over wages costs and that's with their VERY modest care to independent living ratio. Doesn't look good for Oceania with their intensive care model. Further, anything they develop in Auckland will have the same cost pressures SUM others are facing.
TJ, I think the market is saying the above issue Couta1 has alluded too is a meaningful headwind for the company that's come about post IPO growth projections.
Shareholders discount this issue as being immaterial at their peril in my opinion. I don't know the company well enough to know where they're going to try and develop new facilities in due course but they're an inexperienced team swimming in choppy waters. Little to no growth in the past. My standard PE for no growth companies is 10 so it would appear to me the stock is about fairly priced, something the market agrees with.
I prefer to back companies with a solid and credible track record of performance. You always pay more for quality but it seldom disappoints.
The difference is they aren't developing anywhere near as much, nor have anywhere near as much debt to service, nor have anywhere near as much exposure to Auckland.
I suppose at ARV's meeting on 10:30am on Friday 7 July 2017 we will also hear about how bad wage costs will be... will be interesting to see/hear.
You have a good point there.
What did surprise me, and probably some others, is how this was not a good stag at all... reminds me a bit of ARV (in which case we could see the price dip below IPO for a short period... before a huge rebound)
Hard to say really, but what I do believe is that OCA, along with the rest of the sector, will be interesting to watch.
What is now happening is those who were hoping for a nice stag now want out 'no matter what the price is', so not a huge surprise to see some weakness, which could happen over the next few trading days.
A mere 50c increase in wages across the board costs the company around 2million, so think of the extra wage costs when you give all your nurses a $3 -$5 per hour increase, then all your activities staff an extra $3 an hour etc etc. It's quite conceivable that your could be talking an extra 10 million in wage costs.