Forum Archive Index - December 2000

["Ben Dutton" <bendutton@sharechat.co.nz>]

Hi Kelvin,

I was tapping out a mail describing the competitive pressures the whole
retirement sector faces, but Mark took the words out of my mouth.

I should probably add that about a year ago, many brokers and analysts were
over-exceedingly positive about the industry - we heard the usual story,
what a massive market the baby-boomer generation will be for future
retirement villages, etc etc.

However, I think many overlooked just what a competitive industry it really
is - think of how many advertisements there are out their for private
retirement villages and home-care services.

I pulled up an old post from Colin Ross (hope you don't mind Colin) because
it's a piece of "insider information" so to speak on the situation that
these company's face:


Subject: Re: [sharechat] Eldercare
From: "Colin Ross" <ceejaynz@xtra.co.nz>
Date: Fri, 8 Sep 2000 17:19:09 +1200

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I've been pondering on this subject for a while now, and would like to share
my thoughts with the group.
I have recently retired from over 40 years experience as a retail Pharmacy
Proprietor. During that time, I had a good deal to do with Retirement homes
and similar facilities.
There has been a long period  in the past where  government subsidies
provided profitable opportunities for Retirement Home providers.
However, during the more  recent past the generosity of these provisions
have been reduced to the point where margins have become very tight, many
operators have been forced out of business, and the survivors have needed to
become very "efficient" which has often  resulted in inferior services,
employment of cheapest possible labour, and a general squeeze on contractor,
Doctors, Pharmacists, etc..
Eventually, there may well be a market for User-pays services, but right
now, the public has a contrary mind set.
In my opinion, the Corporate providers will have their work cut out to
become profitable. Hard working owner operators are managing to prosper, but
they need to be very good at it and extremely hard working.
I am certainly very pleased to have extricated myself from this quagmire...
Ceejay

-------------------------------------------------

Still though, even though the situation doesn't look the best for
retirement-care, I find Eldercare's change of business direction interesting
(as detailed in their announcement - check Phil's post to have a read).  It
means that the management realise that if they are to become a profitable
and strong company, they have to diversify.

This could be positive in the long term and, if you are a long term holder,
you may well be rewarded.

Best Regards

Benjamin Dutton
(Disc. do not hold ELD)



----- Original Message -----
From: "Mark Hubbard" <mhubbard@es.co.nz>
To: <sharechat@sharechat.co.nz>
Sent: Tuesday, December 05, 2000 1:29 PM
Subject: Re: [sharechat] Re: Eldecare


>
> > >No Replies, Someone must have an opinion please.
> >  , I have Eldecare Shares av..451, I am along term holder,
> > > this company was a brokers buy some time back is there something I
don't
> > > know or is this a great time to top up. Latest price..168 nta is .22c.
> > > Comments please.
>
>
> Hi Kelvin
>
> Eldercare, Metlifecare, and Ryman all operate in an exceedingly
competitive
> area, and growing more so, which would imply pressure on future earnings.
> Its also subject to govt. regulation to an uncomfortable extent in my
> opinion - re subsidies, etc. My personal favourite in this sector is Ryman
> (although I have now sold all my shareholdings in this). I like Ryman
> because they build as well as manage their own resthomes, thus, more
> diversified revenues, lower cost structure? Also, this company has kept to
> all of its profit promises since listing (well largely anyway). Thus, if
> you're dead set on this sector, perhaps think of Ryman rather than
> Eldercare - Ryman's shareprice is also down historically.
>
> IMHO anyway.
>
>
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