Strong HY result which could only mean that there will be a fall in share price today ;) But still a happy holder and in the words of Bonnie Tyler "Turn around".
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Strong HY result which could only mean that there will be a fall in share price today ;) But still a happy holder and in the words of Bonnie Tyler "Turn around".
Yes, looks good to me. What do our retirement village experts think?
I wouldn't hold myself out as an expert by any means but I'm impressed with this solid result. Looking ahead the company expects to match 1H earnings in the second half which implies a 2015 result of underlying earnings of $52m.
On just under 212m shares I have them on underlying EPS of 24.52 cps for a 2015 PE of 20.
Development margin is good at just under 21% and I think prospects are very good. Imbedded value per unit keeps going up.
The stock is relatively good value in a sector that's arguably very fully priced. With no questions over governance and management credibility I don't see why this stock should trade at such a large discount to RYM and is exceptional value relative to SUM IMHO.
P.S. More musings....The question in my mind about the whole sector is this, is growth starting to slow ?
We had Ryman recently reporting a half year result with underlying profit growth at 13%, slowest in years although management hastened to add they were confident of maintaining their 15% EPS growth medium term aspirations, we've had SUM come in with only 10% underlying EPS growth although talking about better growth this year, (who knows for 2016?) and now MET with annual EPS growth of 13%.
The big question in my mind is, Is MET under-priced or are RYM and more especially SUM significantly over-priced ? My money is on the latter theory holding more validity so I'll stay out of this sector who's favourable aging demographics have been well trumpeted from every mountain top for many years now. You shouldn't have to pay a PE of 30 to get growth in the low teens (percent per annum) and I for one won't. I'm tempted to buy MET but OTOH its had a good run and I suspect the stock is fair value and opposed to good value. If one must have exposure to this sector I'd say MET is best value and RYM if you want a set and completely forget stock. I wouldn't touch SUM with a barge pole.
Just as aside IFT holding 20% will be pleased in the result but I note no reaction to their SP as yet. Perhaps Mr Market is asleep.
Disc. not holding either stock but ift bonds
And OTOH if he didn't in the 12 months to date MET has kept up with the NZX50 up 16% whereas SUM, oh dear...only up 2% for a 14% under-performance.
There's much more to this story than the build rate. SUM makes nothing from its villages other than sales and re-sales whereas people might feel its well worth spending the time to read the analyst presentation attachement on the NZX website today regarding MET,( sorry time doesn't permit me to post a link at this stage).
https://nzx.com/companies/MET/announcements/261069
Note the five different revenue streams. Click on results presentation attachment.
I bought recently on the basis that this stock is very cheap for this sector with its intrinsic favourable demographics and my expectation that the new management ably supported by Infratil's expertise would drive the growth in new developments a lot harder than what's been the case in the past. They have an unleveraged balance sheet and are in excellent shape to expand their development profile, this was also an important factor for me. Looks like this is going to plan nicely.
Quote:
MET
01/04/2015 13:24
ASSET
PRICE SENSITIVE
REL: 1324 HRS Metlifecare Limited
ASSET: MET: Metlifecare Acquires Another Auckland Development Site
Date: 1 April 2015
Media Release
METLIFECARE ACQUIRES ANOTHER AUCKLAND DEVELOPMENT SITE
Metlifecare confirms the conditional acquisition of a prime 5.5 hectare site
within the Manukau Golf Course, Manurewa, Auckland. This is the second site
acquired this year following the recent conditional purchase of 5 hectares in
Red Beach.
The land acquisition forms part of a proposed $175 million retirement village
project and is subject to the following material conditions: the satisfactory
completion of due diligence (including feasibility); resource consent of the
site being obtained by Metlifecare; and subdivision consent to be obtained by
the vendor. Development of the site is scheduled to commence in the calendar
year of 2017 subject to satisfaction of these conditions, completing detailed
design and undertaking earthworks on the site.
The site is on Great South Road and is part of the larger residential
re-development of the Manukau Golf Club. It is planned to be Metlifecare's
16th village in the wider-Auckland region and the 27th in the North Island.
Metlifecare CEO, Alan Edwards, commented: "We are looking forward to working
with the vendor, Fletcher Living, on this opportunity and providing more
retirement living and care options to the local area. Our vision for this
village is to see a retirement community established that complements the new
residential community to be created by Fletchers on the balance of the golf
course land. Seeking higher levels of engagement between these communities
through a public caf? and other possible shared services will form part of
our forward planning. We expect to have resource consent in the first half of
the 2016 calendar year."
The proposed village would be Metlifecare's second village in the area. The
other village is the popular Longford Park Village in Takanini. Upon
completion, the village is planned to include a wide range of one, two and
three bedroom independent living options and care beds. The planned community
facilities include a swimming pool, gym, caf? and bowling green.
Importantly, the acquisition supports growth in Metlifecare's development
pipeline. With the addition of this land, the pipeline is likely to grow by
over 400 units and care beds lifting the total pipeline in excess of 1,750
units and beds. Metlifecare continues to look for additional land development
opportunities.
Metlifecare currently has 349 units and beds under construction. The Poynton
(Takapuna), Greenwich Gardens (on Auckland's North Shore) stages 1 and 2,
Coastal Villas (Kapiti Coast) and Oakridge Villas (Kerikeri) will be
completed over the coming months. Stage 1 apartments at The Orchards
(Glenfield) are scheduled to be completed by the end of June 2015. The 36
care beds at The Orchards will be completed early in FY16 followed by the
completion of the stage 2 apartments. Stages 4 and 5 at Greenwich Gardens are
under construction with delivery split from mid-2016 until early 2017.
Metlifecare is a leading New Zealand retirement village and aged care
provider and currently owns and operates 23 retirement villages in prime
locations throughout the North Island of New Zealand. The company has two
villages currently under construction in Auckland - The Orchards and
Greenwich Gardens, together with the Red Beach site conditionally acquired in
January 2015.
ENDS