It doesn't go towards the company in any form.
It's important to realise what share investing is, ie your not really supporting them through buying on asb or sharesies.
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It doesn't go towards the company in any form.
It's important to realise what share investing is, ie your not really supporting them through buying on asb or sharesies.
I remember many many years ago a strategic analysist told me the past belonged to companies which made money by making a widget & then selling it, i.e. manufacturing, but the future belonged to companies which were able to keep reselling the same widget over & over again. e.g. IT, App's, etc.
I always thought well run Retirement Villages also fitted this template.
Yes it will take time but when you look at all those OCA units at Meadowbank or Browns Bay or Taupo etc which will eventually be resold & resold & resold, you start to see a gradually accelerating rise in profits which should increase exponentially in years to come as initial development costs are paid off.
So Maverick and Beagle are 'on the same page' and forecasting Underlying Profit of $60m/$61m for FY22
They reported $61.2m Underlying Profit for the year to March 2020 (reference their comparative numbers in presentation)
So our guru's forecasts shows that earnings growth in FY22 (from $50.7m) will only get profit back to what was achieved 2 years prior
Patience and more patience required
Yes I realise that. There are occasions where one can financially “invest” outside of an IPO. Many of us did just that with the placement/retail offer.
I’m obviously doing a ****ty job of explaining myself. Bottom line - of course I want to make money, but money isn’t my whole focus.
Buying shares on market supports the share price allowing a company to raise capital if it wishes without much dilution to existing shareholders if the SP is high. I never buy @ IPO far too risky with all the hype. I wait for the dust to settle before I make a decision to buy. I consider my shareholding’s along with all the other shareholdings as supporting the company.
Do you also feel that way regarding village occupiers... would you rather see lower village profits and shareholder returns on that side from sales and resales so that new buyers can pay lower prices on units or apartments because it is the kind thing to do. Personally I would like to see much lower nz real estate prices, maybe oneday we can have a listed RV company do just that, making minimal profit or breakeven. Like the supermarket model, sell higher quantity at low margin. But we all know it will fail in short order
Care fees are taxed with a quite punitive rate of 15% (gst) while revaluation gains aren't. The RV model doesn't work without it
I can't believe we are all but singing from the same song sheet here Beagle! :t_up:
It seems we are in surprising agreement on most aspects of OCA but where our differences are now is mostly about the time frames for profit growth to show.
That was a really good post today by the way with some very salient points but I'd like to particularly respond to your eureka moment about Julian's (SUM) statement.
“where the real money is at, its in reselling those units to the next lot of residents with an input cost (repayment to the outgoing resident's estate) of just a mere fraction of the resale price.” Beagle
We will both remember that fun day at DR RUDIs a few years back (ST meeting + beer, oooh..... so much wisdom that followed;)). You were super keen to discuss this new “churn" thing and the fact OCA had it down to 3 years with their care suits. I do recall you hated the term “churn” though.
On the Q and A time on Friday's webinar, Brent made a comment that the c/s churn is even faster than that now.
I've already figured it out at 2.5 years and we are now already starting “reselling those units to the next lot of residents’at the high end Sands and Meadow bank .
FY2022 will demonstrate a steep acceleration of care suite resales and profit that will just keep growing significantly.
What I'm probably making a hash of trying to say is that OCAs feature of fast churn dovetails beautifully into your "eureka" moment about the good profits arriving on the second sale . We are at the early stage now with the care suits.
Here are the resale volume for the last 5 years
62 79 94 107 136 ……2022 should be around 195
I have a pretty darm reliable formula for future modeling c/s sales with very accurate back testing. So my projection of 195 c/s sales 2022 sounds “pie in the sky” stuff but the math's are accurate.
OCA are also playing a similar game with Apartments which churn every 5.5 years so also quicker than a SUM villa.
In a nutshell , I think your time frame for growth to show up is too long and the growth is coming much sooner than you are expecting.
My thoughts are that there's no rush to jump back on Monday, this growth will be continual and ongoing. But why pay 20-25% more each year if you can buy them now virtually at asset price ( Actually the mkt price is currently slightly under asset backing if you add in another $.09cps on top of $1.28 when the unsold stock gets sold for the first time and the CBRE discount is removed).
Last thing….when are we going back to DR RUDI`s mate?