Its going to be very interesting to see how well or badly Earl and his team controls costs in the forthcoming result.
I think their result will be north of the PCP but not as much as Mav is hoping for.
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Sold half my holding a few weeks back balance now under 70c .......so happy either way SP goes :p :t_up:
Suppose they get somewhere close to what Mav is hoping for and the result comes in at ~ $27m and suppose second half is $35m giving $62m underlying profit for the year, that's about 10 cps. Share price of $1.30 suggests forward PE is 13 which seems okay to me "provided they can hit those numbers".
Oceania has mentioned how their development margin is about 30% in Auckland... along with seeing how this margins continues to track (and among several other things) it will be interesting to see how 2 key Auckland developments (also both higher priced complexes) are going:
I will be interested in how sales are going at The Sands (64 apartments and 44 care - completed May 19)
It seemed to me this morning there were at least several units still not occupied... given it has been several months since the facility re-opened and the previous talk about "strong demand", it would be (for me) a bit of a disappointment to still see, say, over a quarter of them not yet settled
Will also be interesting to see how Meadowbank stage 4 (64 apartments and 44 care - completed May 19) sales are going, and stage 5 (26 apartments - due this FY20) is progressing
Indeed they will and they should enjoy it while it lasts. One of the interesting differences between the business model OCA uses v the others is most construction work is contracted to outside parties. I am sure they would have got a profitable fixed price construction quote for projects committed a couple of years back but going forward from here ?
By using external builders their model is more exposed than the likes of RYM who do almost everything in house.
I also think they have a LOT of work to do with improving their internal control systems regarding cost control.
I remain convinced the massive Macquarie stock overhang is also a material factor going forward, until it isn't.
Happy to keep watching from the sidelines for now but redeployment of MET takeover funds looms as something to ponder in the not too distant future.
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Meanwhile over at RYM based on the mid point of their official forecast of ($250m-$265m underlying) $257.5m / 500m shares = 51.5 cps and at $16.30 this places them on a forward PE of 31.7 when they grew underlying earnings at 11.5% last year and forecast at 13.4% this year = average growth rate of just 12.5%. PEG ratio is this 31.7 / 12.5 = 2.5 which makes them look very expensive, (arguably perhaps the most expensive they have ever been relative to their growth rate).
Then there's ARV with its single digit average growth rate trading on a forward PE in the very late teens. Hmmmmmm
Then there's MET where they struggling to get even current NTA under a takeover because of their track record, (which actually isn't that bad with average underlying growth of 15% in the last 5 years)
Then there's SUM with an average growth rate of about 35% since it listed trading on a forward 2020 PE of only about 14.
Hmmmmmmmmmmmmm Two stocks stand out as compelling value, one of which is under a takeover offer. Is SUM other one next ?
Even if the completed units are not ‘sold’ they will still be fully valued in the accounts and show in the real profits number.
Their accounts are so complicated there is a compelling temptation to simply look at the NTA change and add any dividends paid during the period. That would save me a ton of work wouldn't it Winner.