Fair call. RIP SailorBoy.
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Interesting interview with the Chair / interim CEO of Ryman. Facing the music which is why I prefer them. Very interesting what he says about valuations, something I'm not sure OCA has faced up to yet. As Balance mentioned I wouldn't be surprised to see the OCA's new CEO do similar, but that's conjecture. If they do watch out below.
Definitely worth a listen.
https://www.nzherald.co.nz/business/...C2MKP5VHRRYOY/
There is no evidence to suggest that OCA or any other listed property company directors have directly influenced the methodology of external valuers, as RYMs did. While skepticism is understandable, it is just that to suggest that other operators have anything to 'clean up' in this regard
I remember in an interview some years ago, the Chairman (I think) of Ryman stating that one day they would be the company with the largest capitalisation on the NZX. A vacuous ambition I thought, and perhaps an attitude that fuelled their push for development and over-valuation (at all costs.)
Not what I was looking for, but this item from 2015 indicates the Ryman strategy of Grow baby! Grow!
https://www.nzherald.co.nz/business/...EF22BMITFHPHY/
I found the item from 2013: “Challies has stated that Ryman has the intention to become the No 1- listed firm by capitalisation” At least Oceania never stated such an ambition publicly.
https://www.stuff.co.nz/the-press/bu...ise-to-the-top
I found the comment that the 15% compounding growth they were trying to achieve was unsustainable, as it's a similar target that some on here have been calling for with OCA.
In a rising market growth is easy, build em, and by the time you have finished the build its worth another 5% - 7% maybe more. Resales are flying out the door at huge capital gains.
But when the market changes the operating model of the actual villages comes under the spotlight as costs have risen & fees haven't kept up, so right at a time when the sales program isn't delivering what it used to, the operating business is bleeding.
Except you're maybe missing a little bit of context, he was referring to the size they have increased to, being unmanageable in terms of doing developments in maintaining those growth targets (sounds like their annual targets of new units was alot higher than oca, and all the documentation ive seen OCA dont specify a percentage target but a number target being a slice of predicted increase in demand.)
And I'm pretty sure he was referring to care here not village, care is the segment requiring the nursing, and other services. Interestingly OCA have discussion around strategy of moving (or partially moving) their care to an ORA and DMF funding model (part of the refurbishment plan if I'm not mistaken?), so it would be interesting to understand how this is going for them, maybe ferg or mav might have more of a clue than me?.Quote:
But when the market changes the operating model of the actual villages comes under the spotlight as costs have risen & fees haven't kept up
Interesting also was the discussion of the covid period and development costs blow outs at that time, and the choice of leaving developments half finished or pushing through to completion (is there really a choice?), i think (from memory) the timeframes for the development discussed in oca documentation is almost 2 years for development and consenting then almost 2 more years for completing??
Edit comment: It appears like you haven't read any of the available OCA documentation, maybe you should do if you haven't, there is plenty of interesting info available.
I wasn't referring to any OCA target but targets some have mentioned on here to justify their lofty valuations.
The interview was a very good insight into what challenges all the retirement village operators are facing, but particularly RYM, OCA & ARV.
Considering OCA already have the highest DMF at 30% there's probably no room to move, not sure how they can justify a DMF on care beds.
Most of the care fees are funded by Government, so to extract more outside of that is going to be an interesting challenge.
Refurbishing an existing care unit to a level that's much higher than a standard care unit is what would enable them to move to the ORA model as the resident would be paying over and above what the government is funding is my assumption (and bearing in mind that is just my assumption, read the OCA listed documentation for the correct details, i still have more reading to do).
The added benefit I guess is the the ORA less the dmf presumably assists with funding for the refurbishments.
Oh dear, Warriors go down 38-24 (after leading 14-0 early on) to the Storm…… 25,000 fans braved the rain to watch the game. Chief fan Jason Paris of One fame proclaimed “a great man The better team didn’t win tonight. Proud of the team. This is the Warriors year. #UpTheWahs” and went on ‘..whenwe make the finals no team will want to play us”. Most fans agree …real fandom. UP THE WAHS
Oceania saw it’s share price go up 1 cent but it remains pretty low. Fandom out in force again this week in spite of a sin binning. One of most loyal fans bleated on about the current situation doesn’t make any sense at all from both a FA and TA angle (akin to Warriors fans blaming the referee) and made the cry out that there is no better time to buy Oceania shares because Oceania is a great company b(l)aa b(l)aa b(l)aa. This is our year. GO OCEANUA YOU BEAUTIFUL THING
A casual observer has to think both are in a dream world about ‘this being our year’ thing. Maybe the only realist is a young Oceania fan who says it might be middle age before he says ‘yes, this was our year’