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superfluous to requirement
Ferg …from 2019 results preso http://nzx-prod-s7fsd7f98s.s3-websit...084/304090.pdf
Lesson why one needs to look at Total Comprehensive Income
They’ve never made things easy eh
If by 'float' we are talking about the ORA....and that is what SailorRob called it....then your analysis is incorrect. We need to use consistent definitions. The float is NOT the DMF. Float refers to the total cash received and available for use by the RV as they see fit.
If ORA receipts are $105m and ORA repayments are $39m per your example, then the cash on hand increased by $66m as a result of ORA transactions. Assuming the 30% DMF's were fully earned on the outgoing ORA with no other deductions, then the DMF earned over the prior x years was $17m. These outgoing residents had a total ORA (or float) of $56m. That old ORA of $56m has expired via $17m retained via DMF fees and $39m repaid to the executors of the estates of the departing residents. So the change in ORAs (the 'float') is $105m - $56m = +$49m. The $56m of old float has been replaced by a new float of $105m. The new $105m ORAs, assuming the full 30% is earned, will given OCA DMF income of $31m over the next approximately 8 years.
DMF *is* a cash item - it is prepaid by the resident up-front on day 1 when they pay their ORA - the exact amount of DMF will not be known until a later date. It is incorrect to call it a non-cash item. We need to a) be careful with our wording and b) consistent in our definitions, if we are to correctly raise the level of understanding of RVs.
Thanks winner. I agree it's not easy but it gets easier the more time you put into it.
I had taken the CI items into account (that's the $26.6m) and I am familiar with the classification per the image. So we are getting the same total number - we have slightly different breakdowns thereof.
I think your way of looking at it is good. It cuts to the chase. Hence the reason I think your residual value of $45.7m versus $26.6m is interesting....the difference of $19.1m represents the revaluation of village assets over and above the realised portion.
So we have FV gains of $47.4m in the P&L, less the 2 x realised values of $28.3m per uNPAT (and your analysis) which gives an unrealised increase of $19.1m. Add on the $26.6 PP&E and we get your $45.7m number. Of the $45.7m we have $26.6m coming from care and the balance being unrealised gains. There may be a small adjustment for the FV component of care. So yes we have the same numbers, just shown differently and your method has got a few wheels turning for me.
I'm guessing your formula to support the 45.7 number in 1H23 is 26.6+47.4-15.4-12.9...is that correct?
Cheers
Hi Snoopy, I struggle with the relevance of some of your analysis as it looking backwards for a company that is in the midst of a major expansion. The DMF numbers plus any profits on new sales should add significant cash than what is currently being earned
For an extreme example, is Nvidia valued at $1.7Trln for its current earnings?
“I love money more than the things it can buy, but you know what I love more than money? It’s using other people’s money.” - Danny Davito.
Snoopy is only counting the DMF, I am saying the float is the full ORA value which includes the DMF component. The 'float' SR refers to is the full upfront payment of the ORA, from which a % will be deducted as DMF. You are aware the DMF is deducted from the ORA? The first part of my sentence said : "If by 'float' we are talking about the ORA"