Based on PDL’s selling pattern, they will offload shares all the way til end of June. And they will buy Adairs instead as seen in change in substantial holder announcements.
significant headwinds faces Japara. 1. Cash flow is an issue, as evidenced by the fact they needed to sell land and also sell a facility and then lease it back. Cash flow issue also evidenced by the shrinking dividends ands and franking credits.
2. corona and the upcoming flu season will reduce occupancy rates throughout Australia, much similar to the last severe flu in winter that dropped occupancy to below 90%
3. too many facilities are being built when the demand is not there which is why Japara didn’t bother developing the piece of land and got out by selling. Short term demand will also be impacted by the fact that family members cannot visit aged care facilities so many will be reluctant to send loved ones there.
4. Japara consistency pays way too much to its staff north of 70% of revenue when its peers EHE and REG are much lower. This has always been a point of concern to the market.
5. why did the CEO/MD quit now ? Surely if things are going to be great soon, he would’ve stayed on with the company.
JHC Price at posting:
52.0¢ Sentiment: Sell Disclosure: Not Held
