Originally Posted by
Maverick
Hi Peat, good to get a gritty question from you to chew on especially on such a rainy day.
Winner and I went through your DMF /facility fee (same thing BTW) question about a year ago. We both viewed the DMF quite differently.
Winner originally saw it as you outline here, that it's a fee fully used up for the upkeep of the facilities.
I originally saw it quite differently, as mostly profit under a pretty label of “maintenance” in order to be more palatable to residents.
You decide for yourself how to see it after looking at the numbers from last FY. (Note I'm only using the “village” section of OCA and not including the “care” section DMF for simplicity.)
.................................................. .........................Fy 2020(a) .......FY2028(e)
Village DMF............................................... ................21.4m ............92m
Service fees (this is a weekly cash fee ) .......................6.0m ..............10m
Other income............................................ ................ 3.4m ..............4m
Total income............................................ ...............30.8m .............106m
Net village operating expenses...............................-15m...............-30m
Net Village profit............................................ .........15.8m..............74m
I have put in my own end of pipeline numbers (estimated 2028) to demonstrate how the growth of the DMF is one of the key drivers for OCAs profit expansion, especially important when the new sales margins dry up.
I think these numbers demonstrate that a large chunk of DMF is pure profit and not used for expenses. It also shows that the profit % of the DMF increases substantially as OCA converts more of its product to “high end” and then resells it under the DMF system.
Hope that's helpful Peat, did that answer your question?