Is there any thoughts of a CR ?
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Is there any thoughts of a CR ?
I thought the lower DMF was offset by the purchase price for unit occupation rights being higher on 'like for like' units at Rymans? So the actual cash taken from the resident was more or less equivalent to villages run by other operators, despite the DMF being lower? Or have I got that wrong?
SNOOPY
Not sure Snoop, or how to identify but considering they currently only take 20%, to recoup that in the price would mean for every dollar difference in DMF they would have to charge $5 in the upfront justvto bring it to 25%. They also have to return that higher amount in the future to the resident.
Yes that is right. Which is why the Ryman unit is priced higher than equivalent unit under one of the other of the big 3 RV village owners. IOW it is a smokescreen that makes the resident *think* they are getting a more generous deal, when in fact they are not.
But that is the beauty of the RV model as it stands today. Ryman do not have to return a higher amount to the resident when they move out. It is the incoming resident that takes their place that pays the previous resident out with the 'higher amount'. From an operational perspective, the value of the unit, once the occupational rights have been sold for the first time, is a red herring. If Ryman prices the unit high, but then uses a lower DMF percentage to make residents *think* they are getting a good deal, they can still get the same dollar fee in dollar terms than they would have with a lower occupational unit price and a higher DMF percentage fee. And this illusion of a 'bargain for residents' carries on, in perpetuity.
SNOOPY
Hmmm I think you can quibble over who pays. When I say RYM pays a higher amount, I.e that's a liability in the accounts.
Anyway my question is, do you have evidence that RYM are selling at a higher price for the same thing than other providers?
Are their new build margins significantly higher than other providers?
That would appear to me to have a pretty big impact on a potential resident decision to buy.
At some point there could be value play. Market participants could take positively when they see falling debt in their books. For me first sign for turnaround is consolidation and low debt or manageable debt along with positive business environment in the sector. In some countries population growth is going to slow down. Regular CR is not a good thing. Shares can be diluted.
No, I don't have any evidence that Ryman are selling at a higher price point the same thing.as other providers. Apart from anecdotal comments I thought that I read some time ago on this forum? Or maybe it was KW when she and her father were looking at a suitable retirement village for him in Christchurch on that other forum? I guess with real estate, value is difficult thing to pin down. Put an identical unit on different sites and the outlook view, proximity to neighbours and the access to differing village facilities can all influence opinion on 'value'.
SNOOPY
Is it possible that there has already been value there? RYM has taken a new format of reporting results from this year, which is clearly much better. I intend to believe its NTA $6.01 now is more reliable, and if this is the case, current SP is only around 60% of NTA. That for me means value.
If signs you mentioned came out, SP would have been up by 30% or more. So now it's time to accumulate.