OCA - Oceania Group - retirement villages

[ValueNZ]

Any juicy questions? Had the privilege of catching the catching the insightful ones last year on native trees, recycling and how that lady was really interested in getting costs for a room at the Helier.

One shareholder asked the board if they were sorry about the share price lol

[X-men]

Bet they just don't care about the SP.....they all still get their $$$ wages

[winner69]

One shareholder asked the board if they were sorry about the share price lol

What was the response?

[ValueNZ]

What was the response?

Can't remember exactly but it was a no. After all they don't control the prices at which people transact their shares...

I've sent an email to their investor enquiry address asking for a copy of the recording of the meeting, I'll share that here if they send me it.

[ronaldson]

In my opinion the trouble with all RV listed operators ( I exclude those companies that are fully aged care ), unlike companies in other sectors, is that both Board members and senior executives are not actually shareholder focused at all. Rather, they have the underlying belief that their mission is to benefit society by providing and building out secure village accommodation for the monied elderly via an endless pipeline of development, as a social good.

Indeed, I would be inclined to feel that way myself in their shoes, as the alternative would be depicted as capturing and milking for profit a dependant and vulnerable segment of the population.

Recent experience, evident with a number of operators, is that focus has become misplaced and they have lost their way so that shareholders have had a distinctly negative outcome. There are natural limits with regard to the extent of activity and asset base that the available shareholder capital should support. I have not seen, ever, any commentary as to what scale is desired to optimise shareholder outcomes, nor any assessment of when expansion should be curtailed in the interests of ensuring a stable longterm return to shareholders that realises embedded value and derisks activity.

OCA is no exception. The Board would be best advised to divest all but the most promising of sites held and restructure the business to operate the optimum asset base in the best interests of shareholders. The fact is that will not be contemplated because there are no kudos for doing that, and the underlying assumption appears to be that demographic tailwinds will provide support forever. Some analysis is needed as to how the model actually benefits shareholders.

[winner69]

Well done the mighty Warriors, a 32-16;win over the Broncos. Even though Broncos were missing a few star players it was still an impressive win. Last weeks big disappointment is now behind them and everything is back on track. Fans excited again and this is really going to be ‘our year’ UP THE WAHS

Oceania had a mixed week with the share price down 1 cent to 53 ….and still drifting down from 73 cents at the beginning of this year. Highlight of the week was the fans getting together (and watching livestream) to celebrate the past year’s successes and to hear from the bosses how well things are going. Seems we have a great team and a great plan and its all working out great with a bright future ahead. One solitary fan asked if the bosses were sorry about the results (shareprice) and in true Warriors mode the CEO blamed the referee and it wasn’t their fault. Things looking good ….GO OCEANIA YOU BEAUTIFUL THING.

A casual observer would still think that progress by either isn’t really that good and the fans are really still hoping like hell that their dreams will burst into reality later this year.

[Baa_Baa]

In my opinion the trouble with all RV listed operators ( I exclude those companies that are fully aged care ), unlike companies in other sectors, is that both Board members and senior executives are not actually shareholder focused at all.

As you've put this on the OCA thread, albeit referring to all listed RV's, I was wondering what you might think they could do to be more "shareholder focused", bearing in mind a couple of Directors have very large shareholdings and exec's are remunerated with share options. I suppose it will vary about what different shareholders want or expect.

It seems that you might think stopping development and asset growth and consequent growth in future cashflows, and just consolidating now, removing development expenses, divesting underperforming assets (they're already doing that), and feast on the capped but modest cashflows that results, would be more "shareholder focused"?

I would beg to differ, as a shareholder I didn't buy this for dividend earnings at this early stage in OCA's listed lifetime, this and the whole sector are woeful dividend payers. I didn't buy it either, for a short/medium term sugar hit on the shareprice, fortunately I suppose as we can see that the market has other plans. Albeit that play into my hands as I can buy a lot more OCA cheaply at ridiculously low multiples to asset value, without any consideration for future cashflows or distributions.

I bought it, and some other RV's, as a proxy development property play with a unique-to-sector capitalisation model that will develop and grow assets, and cashflows, ad infinitum until the market cannot sustain utilisation, which on sector demographics is decades away.

When that saturation point comes though, then yes I agree, stop all development costs, get rid of any underperforming assets if there are any left, optimise operating performance and drink from the cashflow firehose with outrageous distributions of excess profits to shareholders.

If I thought being "shareholder focused" was anything other than that, I would have sold my holding some time ago.

[winner69]

CEO is ‘incentivised’ by having Total Shareholder Return as one of the LTI targets.

Not a very demanding target ….but that doesn’t seem to work insofar as shareholders are concerned.

[Balance]

Just saw a big block of new premium terrace apartments in The Helier catchment area dropped the asking price of individual units by 23% yesterday.

Developer accepting reality after the units were advertised for $2.2m+ from a year ago.

But hi, OCA’s properties are special - they can only ever rise in values so as W69 would say, no worries!

[Daytr]

As you've put this on the OCA thread, albeit referring to all listed RV's, I was wondering what you might think they could do to be more "shareholder focused", bearing in mind a couple of Directors have very large shareholdings and exec's are remunerated with share options. I suppose it will vary about what different shareholders want or expect.

It seems that you might think stopping development and asset growth and consequent growth in future cashflows, and just consolidating now, removing development expenses, divesting underperforming assets (they're already doing that), and feast on the capped but modest cashflows that results, would be more "shareholder focused"?

I would beg to differ, as a shareholder I didn't buy this for dividend earnings at this early stage in OCA's listed lifetime, this and the whole sector are woeful dividend payers. I didn't buy it either, for a short/medium term sugar hit on the shareprice, fortunately I suppose as we can see that the market has other plans. Albeit that play into my hands as I can buy a lot more OCA cheaply at ridiculously low multiples to asset value, without any consideration for future cashflows or distributions.

I bought it, and some other RV's, as a proxy development property play with a unique-to-sector capitalisation model that will develop and grow assets, and cashflows, ad infinitum until the market cannot sustain utilisation, which on sector demographics is decades away.

When that saturation point comes though, then yes I agree, stop all development costs, get rid of any underperforming assets if there are any left, optimise operating performance and drink from the cashflow firehose with outrageous distributions of excess profits to shareholders.

If I thought being "shareholder focused" was anything other than that, I would have sold my holding some time ago.

That's all well in good Baa_Baa and each to their own etc, but why hang on to a proxy property development play post the Covid property sugar rush and a higher interest rate cycle?

Investors that have, have sat on a lame duck for the best part of three years and seen their investment shrink to 1/3rd of its peak value.
Sticking it in the bank would have been a much better option.

If I was a long term holder and weathered the storm (and perhaps there is more bad weather to come who knows) would I sell out now?
Probably not and I might be doing what you are doing in averaging down, but probably not in the same company, as you say it's a proxy. So if I owned OCA, I would probably by RYM or visa versa.

It was just obvious to me, post Covid, the Government was throwing everything at the property market legislatively to slow it down & increase supply and interest rates were going up fast.

Interestingly now the Government has reversed those things, seem to be getting out of building state houses, developers are going broke and perhaps interest rates will start to come down in the near future.

Only to have 3 times the money earning interest or invested in appreciating stocks for the last few years to reinvest now.

This is not to rub your nose in it, but I am questioning why hold an investment as a proxy to a market that had so many changes that would all negatively impact the sector.