But Ferg has done all of that and still made a number of assumptions…
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Below are the Revenue and net profit figures for SummerSet from 2013 through 2023.
The reason I have used SUM is that nobody is challenging the business model like they are with OCA
What you all need to ask yourselves is how can net profit be higher than total revenue for a decade, AND for it to be true and accepted by the market.
These businesses are not easy to understand and the accounting is very complicated, which is forced on them by the rules. The conventional rules are not made for businesses like these.
Some things to think about, the inter relation between the operating business and the development business, the relationship between CAPEX and the cash flow statement and the OPEX and the income statement. Think about how the development margins are displayed and recognised on the income statement.
And finally and most importantly, think about the biggest reward and the very golden Goose - the ORA money is totally invisible on the income statement. You will never see this as profit, only the DMF and even then only as it's recognised/accrued. You will see the benefits of having this money appear over time through the income statement but in a convoluted way.
I will be blunt here, most people on this forum have no business owning this company, the accounting is extremely complex and the model is not easy to understand as we see here every day.
Revenue 45, 54, 68, 86, 100, 137, 154, 172, 202, 237, 270
NPAT. 34, 54, 84, 145, 239, 214, 175, 230, 543, 269, 436.
Even the other day in the results release it was put first -
Total Comprehensive Income of $70.5m and Net Profit after Tax of $31.5m for the year ended 31 March 2024 were 104.3% and 104.5% higher than the prior corresponding period of $34.5m and $15.4m respectively.
And they have at times educated punters as to what it means like in that graphic I posted yesterday
Usually a bigger number than NPAT so why not skite about it.
Yes they do Underlying Earnings as well but you get the feeling they prefer Underlying EBITDA more
It’s the Oceania way of doing things …put out heaps of metrics ..helps the obfuscating
I don't get this statement. I have investments in many companies I don't fully understand. Personally I don't think it's necessary to have a nuts and bolt deep understanding of every nuance of a business. If that were true I doubt anyone would invest in anything. My main reason for buying OCA is the ageing population. Simple as that for me!
“My main reason for buying OCA is the ageing population. Simple as that for me![/QUOTE]”
Seems like a pretty fair opinion to me, no one escapes this (aging) and it’s a fundamental driver of these businesses
That is correct.
Given the convoluted nature of the accounts I set aside some time once a year to fully reconcile the OCA accounts so that I know what is going on. I did that last night. I start with the Opening values on the Balance Sheet and then process every debit and credit for every line (plus some more) by processing the values from the P&L, the cash flow, various notes and the presentation. This allows me to 'prove' the closing values on the Balance Sheet. It's no small task hence my closing quip to Kathryn. I do it to see what has been going on behind the scenes and if there are any accounting 'funnies' that concern me.
Addressing mistaTea's question these statements are not assumptions: $60m capex coded directly to investment property which is not a 'development asset', $33m capex on dev assets and negative $21m reduction in new stock. These 3 alone add to $72m, versus $76m to be explained. The last 2 items are known to directly impact dev debt per statements made by OCA. If someone wants to prove how the other $60m capex was funded then I'm all ears but it is a very safe assumption this was funded by dev debt if you analyse the numbers. As an aside (and the BS / sniff test), it is business 101 to use long term debt to fund long term assets so it makes sense. Based on the flow of debits and credits, and the requirement for new sales to repay dev debt, the last $4m must be sitting in accounts receivable, although I suspect the actual value is higher given other factors. And if it's not that then it's not material to answering the question.
I often see people jump to conclusions (online and in the real world) and assume something is incorrect based on their not understanding something. I hope the professional analysts are not starting from that position. It's a shame OCA couldn't answer it succinctly because it is not a good look - but it wasn't helped by Aaron quoting the wrong numbers. But OCA did not help by departing from the historic norm and using dev debt for non dev assets and not explaining that clearly enough.
'Development assets' is a specific measure used by OCA per the reason I outlined. To compare just the movement in that to the movement in total or nett debt is only looking at half the picture. If you follow the numbers I posted and the references, you will see the $60m of capex coded directly to investment property was (inadvertently) omitted by Aaron. So whilst he might not be 'wrong' with the numbers he quoted, he was 'wrong' with the comparison he tried to make.