New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Thematic (Sector/Industry)

<ul><li>The latest REINZ data for July confirmed that NZ is in the midst of its biggest (nominal) house price decline for at least 50 years</li><li>Additional COVID buffer is largely exhausted</li><li>How much more to go? The long run still provides some comfort</li></ul>

The latest REINZ data for July confirmed that NZ is in the midst of its biggest (nominal) house price decline for at least 50 yearsAdditional COVID buffer is largely exhaustedHow much more to go? The long run still provides some comfort

Aged Care Sector: Montgomerie-Ibbotson Aged Care Pricing Index; Crunch Time

Equity Bottom-Up

<ul><li>Arvida Group (ARV) reported a weak and somewhat messy 1H24 result, but with sprinkles of hope for the future mixed in.</li><li>Excluding an insurance accrual and development gains from non-cash transfers of residents treated as sales, we estimate underlying earnings were down ~-45% versus 1H23.</li><li>A poor start to ARV's first period for some time, without any prior period acquired growth. </li></ul>

Arvida Group (ARV) reported a weak and somewhat messy 1H24 result, but with sprinkles of hope for the future mixed in.Excluding an insurance accrual and development gains from non-cash transfers of residents treated as sales, we estimate underlying earnings were down ~-45% versus 1H23.A poor start to ARV's first period for some time, without any prior period acquired growth. 

Arvida Group - 1H24 Result — A Hard Half

<ul><li>Arvida Group (ARV) provided an update on drawn debt, implying meaningfully higher debt versus our and Visible Alpha consensus forecasts.</li><li>The higher than expected debt is likely predominantly driven by higher development capex, but also worse than expected cash collection from new sales and resales.</li><li>ARV also announced it has restructured its debt facilities: now split between NZ$450m of development facilities, excluded from Interest Coverage Ratio (ICR) covenants, and core facilities. </li></ul>

Arvida Group (ARV) provided an update on drawn debt, implying meaningfully higher debt versus our and Visible Alpha consensus forecasts.The higher than expected debt is likely predominantly driven by higher development capex, but also worse than expected cash collection from new sales and resales.ARV also announced it has restructured its debt facilities: now split between NZ$450m of development facilities, excluded from Interest Coverage Ratio (ICR) covenants, and core facilities. 

Arvida Group - Debt Juggernaut Rumbling On: NEUTRAL

<ul><li>Arvida (ARV) reported a solid FY23 result, broadly in-line with our and consensus expectations with several of the key metrics having been pre-announced</li><li>ARV guides the market to an underlying profit that includes, ~NZ$5m of an insurance payment – which would take the result to a beat of ~+5% on underlying profit and +2% on annuity EBITDA</li><li>ARV also provided some sector leading disclosure on cash recovery on capex, laying out the actual capex spent and recovered on both brownfield/acquired villages and a greenfield development.</li></ul>

Arvida (ARV) reported a solid FY23 result, broadly in-line with our and consensus expectations with several of the key metrics having been pre-announcedARV guides the market to an underlying profit that includes, ~NZ$5m of an insurance payment – which would take the result to a beat of ~+5% on underlying profit and +2% on annuity EBITDAARV also provided some sector leading disclosure on cash recovery on capex, laying out the actual capex spent and recovered on both brownfield/acquired villages and a greenfield development.

Arvida Group (ARV): FY23 Result – Initial Impressions

<ul><li>Cash recovery of capex — new disclosure sheds light on the difficulties of recycling cash</li><li>Resales margins to remain higher for longer; new sales margins getting squeezed from both sides</li><li>Care suite model working well for ARV — but a slow burn to offset the lower for longer care profitability</li></ul>

Cash recovery of capex — new disclosure sheds light on the difficulties of recycling cashResales margins to remain higher for longer; new sales margins getting squeezed from both sidesCare suite model working well for ARV — but a slow burn to offset the lower for longer care profitability

Arvida Group: FY23 Result — Solid but Subdued

New Zealand

Arvida Group Ltd owns and operates senior care living facilities in New Zealand.

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Arvida (ARV NZ)

Aged Care Sector: Montgomerie-Ibbotson Aged Care Pricing Index; Crunch Time

The latest REINZ data for July confirmed that NZ is in the midst of its biggest (nominal) house price decline for at least 50 years

Forsyth Barr

Arvida Group - 1H24 Result — A Hard Half

Excluding an insurance accrual and development gains from non-cash transfers of residents treated as sales, we estimate underlying earnings were...

Forsyth Barr

Arvida Group - Debt Juggernaut Rumbling On: NEUTRAL

Arvida Group (ARV) provided an update on drawn debt, implying meaningfully higher debt versus our and Visible Alpha consensus forecasts.

Forsyth Barr

Arvida Group (ARV): FY23 Result – Initial Impressions

Arvida (ARV) reported a solid FY23 result, broadly in-line with our and consensus expectations with several of the key metrics having been pre...

Forsyth Barr

Arvida Group: FY23 Result — Solid but Subdued

Arvida Group (ARV) reported a solid FY23 result, broadly in-line with our and consensus expectations with several of the key metrics pre-announced;...

Forsyth Barr

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