New Zealand Professional Investment Services Firm

Forsyth Barr

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.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Arvida (ARV)</h2>
<p><strong>March market update indicates business is tracking well</strong></p>
<ul>
<li>New sales for the first 11 months of FY20 were 101 units and resales were 244 units, both are on track with our FY20 forecasts. We are not changing our numbers of the back of this update and as per our ARV update Getting Better with Age dated 13 February 2020, we are forecasting 16% EPS growth in FY20. No changes to our NZ$2.03 Target Price and OUTPERFORM rating. (Conviction List stock).</li>
<li>Average resales pricing is up +11% also in line with our forecasts, as are margin gains that are up +56%. Total 3Q sales were up +46% on the pcp</li>
<li>Resales vacancy remains low and aged care occupancy sits at a high 95%. ARV confirmed it now has 80% of its care facilities graded to the 4 year highest DHB certification level.</li>
<li>Resident satisfaction levels are very high with a net promoter score (NPS) above 50.</li>
<li>ARV has reached an agreement with an Australian home care company to use its technology in NZ and believes this fits with its outwardly facing community strategy.</li>
<li>Development activity is on track for 200 units built in FY20 and 250+ in FY21 which is in line with forecast. Greenfield development progress continues with digging in the ground in Kerikeri, 25 villas and the resident clubhouse underway at Richmond and the next stage of 20 villas and advanced planning for the resident clubhouse and care facility is underway in Queenstown.</li>
</ul>
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<p><strong>Jeremy Simpson &nbsp;CFA</strong><br>Director / Senior Analyst, Equities</p>
<p><em>M: +64 21 995 998 |P: +64 9 368 0022 | TF: 0800 367 227&nbsp;</em><br><em>Level 23, Lumley Centre, 88 Shortland Street, Auckland</em></p>
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Arvida (ARV)
March market update indicates business is tracking well

New sales for the first 11 months of FY20 were 101 units and resales were 244 units, both are on track with our FY20 forecasts. We are not changing our numbers of the back of this update and as per our ARV update Getting Better with Age dated 13 February 2020, we are forecasting 16% EPS growth in FY20. No changes to our NZ$2.03 Target Price and OUTPERFORM rating. (Conviction List stock).
Average resales pricing is up +11% also in line with our forecasts, as are margin gains that are up +56%. Total 3Q sales were up +46% on the pcp
Resales vacancy remains low and aged care occupancy sits at a high 95%. ARV confirmed it now has 80% of its care facilities graded to the 4 year highest DHB certification level.
Resident satisfaction levels are very high with a net promoter score (NPS) above 50.
ARV has reached an agreement with an Australian home care company to use its technology in NZ and believes this fits with its outwardly facing community strategy.
Development activity is on track for 200 units built in FY20 and 250+ in FY21 which is in line with forecast. Greenfield development progress continues with digging in the ground in Kerikeri, 25 villas and the resident clubhouse underway at Richmond and the next stage of 20 villas and advanced planning for the resident clubhouse and care facility is underway in Queenstown.



Jeremy Simpson &nbsp;CFA Director / Senior Analyst, Equities
M: +64 21 995 998 |P: +64 9 368 0022 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland



Arvida (ARV): March Market Update Indicates Business Is Tracking Well