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.

Equity Bottom-Up

<ul><li>After the kerfuffle of Ryman Healthcare's (RYM) result, Arvida Group's (ARV) result provided only incremental news and mostly good news.</li><li>ARV set out an ambition to close what it considers a major gap between the market's perception of its value (~0.5x net tangible assets) and its own view.</li><li>The strategy consists of: (1) leave no stone unturned to reduce core debt, (2) look for potential capital partners and other strategic options, and (3) review pricing and reduce costs. </li></ul>

After the kerfuffle of Ryman Healthcare's (RYM) result, Arvida Group's (ARV) result provided only incremental news and mostly good news.ARV set out an ambition to close what it considers a major gap between the market's perception of its value (~0.5x net tangible assets) and its own view.The strategy consists of: (1) leave no stone unturned to reduce core debt, (2) look for potential capital partners and other strategic options, and (3) review pricing and reduce costs. 

Arvida Group - Incremental Steps in the Right Direction

<ul><li>Arvida Group's (ARV) semi-annual investor update was on the whole, positive. It delivered: (1) strong resale gains, driven by both solid unit sales and margins, and (2) illustrated net debt was tracking better than our expectations. </li><li>We were also encouraged by the reduced FY25 build guidance, suggesting a focus on reducing debt and realising the potential of its Arena acquisition.</li><li>A sensible prioritisation given how the stock is currently valued. </li></ul>

Arvida Group's (ARV) semi-annual investor update was on the whole, positive. It delivered: (1) strong resale gains, driven by both solid unit sales and margins, and (2) illustrated net debt was tracking better than our expectations. We were also encouraged by the reduced FY25 build guidance, suggesting a focus on reducing debt and realising the potential of its Arena acquisition.A sensible prioritisation given how the stock is currently valued. 

Arvida Group - Strong 2H Resales, Sensibly Lowered Build Rate

<ul><li>Arvida Group (ARV) turned down a highly conditional non-binding NZ$1.70 per share takeover bid from an offshore infrastructure fund in September.</li><li>The bid represented a ~+36% premium to its September price of ~NZ$1.25 (~+89% premium to its last undisturbed price of NZ$0.90).</li><li>ARV said it has no reason to believe anything further will proceed from this bid; there is a big step between a firm offer and a highly conditional unsolicited non-binding bid.</li></ul>

Arvida Group (ARV) turned down a highly conditional non-binding NZ$1.70 per share takeover bid from an offshore infrastructure fund in September.The bid represented a ~+36% premium to its September price of ~NZ$1.25 (~+89% premium to its last undisturbed price of NZ$0.90).ARV said it has no reason to believe anything further will proceed from this bid; there is a big step between a firm offer and a highly conditional unsolicited non-binding bid.

Arvida Group - M&A to the Fore ARV Not Considering Offer

<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

New Zealand

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

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Arvida (ARV NZ)

Arvida Group - Incremental Steps in the Right Direction

After the kerfuffle of Ryman Healthcare's (RYM) result, Arvida Group's (ARV) result provided only incremental news and mostly good news.

Forsyth Barr

Arvida Group - Strong 2H Resales, Sensibly Lowered Build Rate

Arvida Group's (ARV) semi-annual investor update was on the whole, positive. It delivered: (1) strong resale gains, driven by both solid unit sales...

Forsyth Barr

Arvida Group - M&A to the Fore ARV Not Considering Offer

Arvida Group (ARV) turned down a highly conditional non-binding NZ$1.70 per share takeover bid from an offshore infrastructure fund in...

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

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