# DVC - DCA Group



## stock passionate (31 January 2006)

Anybody know why the DCA group is falling everyday especially today?

C L


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## jet-r (31 January 2006)

Its probably because of the profit downgrade recently announced by HSP which gave companies in the similar industry a big warning sign.

any other factors?


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## BraceFace (7 February 2006)

Down another 10c today....
Sliding badly.

Brokers still have a buy on it.....
Surely the downgrading of Healthscope can't have this much of a negative impact on DVC.

Idea's welcomed!


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## Mouse (24 February 2006)

Does anyone know what happened with DVC this morning?

Closed yesterday at $3.60, then down to $3.10 on open today.

cheers
Mouse


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## trader (24 February 2006)

Profit report out.


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## Mouse (24 February 2006)

Hi,

I saw that, but I thought the profit report was a good one?  Did I miss something in it?

cheers
Mouse


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## BraceFace (27 February 2006)

Here is Macquarie's slant on DVC - seems pretty positive.
Think I might hold on for a bit.


DCA Group 
Interim result 
Stock:	DVC AU
Volatility Index:	very high

DCA Group has reported an interim adjusted profit of $38.1m, up 47% on the same period in the previous year, but short of our $43.4m forecast. Dividend was in line at 4c.

Impact
Despite management talk of weaker than expected sales, we could find no fault in the imaging result, which was in line or even slightly ahead of our forecast.

I-Med achieved 8.9% organic sales growth coupled with 1.4% of margin expansion to achieve $69.4m in Earnings (before interest, tax & amortisation). This was achieved through the capture of synergy benefits in MIA in a supportive industry environment, whilst at the same time re-signing 90% of the network's 300 strong radiologist workforce onto incentivised long term contracts. The other 10% will be completed in coming months.

The aged care business suffered from ongoing cost pressures in the domestic business, with rising occupancies unable to cover wage rises, resulting in a 0.3% margin decline. Whilst painful at the current run rate, this trend only exacerbates the likelihood of a near term step change in high care funding, to the favour of a player like DCA Group with industry leading efficiency. New ministry leadership, greater opposition party pressure, and ongoing public outcry (including recent press of exceptionally poor nursing home care, even criminal activity) should together catalyse the inevitable regulatory change that has already been recommended (yet again) to Cabinet.

Corporate costs were in line after adjusting for one-off costs associated with restructuring and re-financing surrounding the Guardian transaction, as well as for stock compensation costs. The major difference to our forecast was actually interest costs, which were elevated by a surprisingly (and non- recurring) punitive rate on a bridge facility, discount unwinding for the convertible bond, and also the aforementioned Guardian re-financing costs.

Earnings revision

Earnings per share: 2006 -10.7%; 2007 -11.7%.

Price catalyst
12-month price target: $4.43

Catalyst: Aged care regulatory change and UK National Health Service outsourcing contracts.

Action and recommendation
DCA Group has faced ongoing scrutiny with regard to margin leakage to radiologists, possible imaging reimbursement cuts, delays in growth for the promising UK business, expensive aged care expansion and aged care margin pressures.

In light of a slightly weaker than operational result, we have stripped our forecasts back to basics by removing any above-sector growth (through aged care expansion, UK expansion, and domestic market share gains in imaging), as well as any operating leverage across both aged care and imaging. In other words, no margin expansion from levels seen in the December half just gone.

Even after these (surprisingly minimal) reductions to our operational earnings forecasts, the investment thesis remains the same. Two strongly cash generative income streams underpinned by government-underwritten industries where powerful demand drivers will continue to comfortably exceed supply for the foreseeable future. This is set against an exceptionally low cost of capital (8.51%) demand from DCA Group's highly efficient balance sheet and accommodation bond feature.


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## jet-r (12 May 2006)

Can someone explain this?

on the 23rd of Feb. DVC's sp opened 20% down from previous days close without any ann. The sp quickly pulled back and closed at $3.5, only 4% down. 

Again, the samething happend this morning, a giant 20% freefall on opening at $3. and now its bounced back to $3.30, without any announcement.

what does this tell us? Ive never seen this before. Is it because some institute holder are dumping the shares? or is it because rumours leaked out of the boardroom? Im confused....


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## Sean K (12 May 2006)

They announced last night that profit would come in at the lower end of analysts expectations. 

Oversold. If you're a long term investor, this is worth considering right now.


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## 3 veiws of a secret (12 May 2006)

I do tend to follow this share ,but I do recollect this share being dumped recently (if my memory is correct to abt 3.05?) but in a few days it's back to its norm.I read that shareholders dumped the share due to 'possible' lower profits forecast.....
Yes your correct it did rise like yeast did'nt it! 3.50 then 3.60 within days.....personally I like it when a share price gets dumped ,like a vulture I tend to swoop!


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## jet-r (12 May 2006)

I bought 2000 shares on opening at 3.14  and sold in 3 minutes for 3.39
450 gain..  im not complaining..    

I agree with you that DVC is a solid business and woth to consider for long term.


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## BraceFace (12 May 2006)

As a long term holder of DVC I have taken quite a hammering today. :swear: 

I dont think I'll sell. Seems to be quite a kneejerk reaction today.
Even though the profit is possibly on the low side, a profit is a profit.

I expect to see this back up to $3.50 fairly shortly (I hope.......!!)

Good buying at 3 bucks.


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## Sean K (12 May 2006)

I'm in the same boat BraveFace.

If I didn't think the market was ready for a correction, I'd buy some more. 

And you are right, this thing actually makes money! All those baby boomers will be increasing the share price nicely over the next 10 years.


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## jet-r (12 May 2006)

Iv just bought a parcel of 2000 near closing this makes the 4th time of holding this thing.
looking to hold it for long term.


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## RichKid (12 May 2006)

BraceFace said:
			
		

> Here is Macquarie's slant on DVC - seems pretty positive.
> Think I might hold on for a bit.
> 
> 
> ...




Extract above from an earlier post of a few months ago. 

Looks like they have a record of delivering below expectations but obviously the people who matter in the market believe it's strong so they keep moving it up.


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## RichKid (14 May 2006)

RichKid said:
			
		

> Extract above from an earlier post of a few months ago.
> 
> Looks like they have a record of delivering below expectations but obviously the people who matter in the market believe it's strong so they keep moving it up.




Crucial week coming up, needs to hold last week's low, unlike the last big drop the price direction didn't reverse intraday. Article on the bad news:
http://www.smh.com.au/news/business...nt-figures-down/2006/05/12/1146940732618.html


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## Sean K (17 May 2006)

I ended up topping up on this today at $3.00 but it ended $2.95. Lowest level since Oct 04. Surely the company is worth more than it was then! Oversold. Surely! 

From Aegis:

We like the fundamentals of both aged care and radiology. We remain very favourably disposed to DVC despite the sober guidance provided for FY06, which will mean a flat EPS result for the year. Our confidence in the management team is unchanged. DVC's forward PE is on the high side, but reflects the upside potential from future government reforms to aged care funding and the potential upside from the NHS's restructuring of the UK radiology market. We retain our BUY recommendation.


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## samsterchan (14 June 2006)

*DVC - expect UK tender announcement very soon !*

The UK government is due to release results of the tender process very soon.
This was originally due out in May, but all indications point to the results being released very soon.

At the current price, DVC is a bargain compared to other healthcare companies.

The following is a snippet from a recent Intersuisse report :

DCA Group is a healthcare company primarily operating in 
the areas of diagnostic imaging and aged healthcare centres 
in Australia, New Zealand and the UK. 

In terms of growth, DVC has confirmed it is short-listed for 
four of the seven UK outsourcing tenders in diagnostic 
imaging and we estimate this represents ~£100m per annum 
of potential revenue. Contracts are expected to be awarded in 
~February 2006. We believe £30-40m per annum is a likely 
outcome and value this at ~50 cps to DCA Group.

Go in now !!


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## Sean K (14 June 2006)

I agree Sam. I bought a few more. Averaging down a bit.


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## jet-r (14 June 2006)

*Re: DVC - expect UK tender announcement very soon !*

what is the chance of DVC winning the tender?
anymore details on this?



			
				samsterchan said:
			
		

> The UK government is due to release results of the tender process very soon.
> This was originally due out in May, but all indications point to the results being released very soon.
> 
> At the current price, DVC is a bargain compared to other healthcare companies.
> ...


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## Sean K (14 June 2006)

If I knew, and told you, I think I'd get in trouble. Unfortunately, no rellies in the NHS. 

.50c per share boost would be nice. I might be even then!


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## jet-r (15 June 2006)

Kennas 
theres a nice article about DVC on this months smart investor. From the author's point of view, people over reacted on the profit warning. In fact it will most likely to have 18% growth this year.


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## Sean K (15 June 2006)

Yes, there are a few good articles about. Doesn't seem to be helping the sp though. Down another 1% today. I'm $4,500 down on this great investment. :-( I might have to double up! And keep doubling up until I win! Maybe I should have just gone down to Crown....


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## BlackTie (15 June 2006)

yeah Kennas, I also think DCA is a good investment. I  have invested $8K in it when it down to $3 then anotther $4K when it down to $2.95.     Now just have to wait.  I will not put money in till I see sign that people buying in.


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## Sean K (15 June 2006)

Black Tie, I reckon that this one is one you put away in the draw and have a look at again in 10 years. It's big business, in a massive growth area. Safe as houses. Well, brick houses in a popular suburb with good neighbours, out of a cyclone and earquake zone...you know what I mean.


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## jet-r (15 June 2006)

I think holding it 1 to 2 years will do. You will collect some dividend along the way and enjoy the 50% discount on CGT after one year of holding.

Its investor's mood that is ruling the price of DVC at this stage. Time heals everything, give the it few months time and they will look at this investment unbiased.


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## Sean K (15 June 2006)

Jet-r, 

I'm also looking at some consolidation around the old people sector. I think some of the big players will start to try and REALLY dominate the market. I think DVC are well placed, once they bed down Gribbles, to look at other parts of the retirement/health sector. 

Not sure where that is going...Perhaps a HSP and DVC merger? They would rule the sector completely if the ACCC allowed it.


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## Sean K (21 June 2006)

Skimming under the 200d MA.   

So unloved atm. Poor us ignorant retail investors. Please someone tell me this is a good investment for the long run again. Thanks!


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## jet-r (21 June 2006)

the next support level is at $2.46.  WHen should we expect to hear the news about the results of the tenders at UK??


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## Sean K (21 June 2006)

Supposed to be about now, but with all this selling makes me thing something smells.


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## Sean K (27 June 2006)

At last a positive report from someone. Must be holding some.....

 0838  [Dow Jones] STOCK CALL:ABN Amro says the market is significantly discounting DCA Group's (DVC.AU) earnings, with stock down 34% since profit
downgrade on May 11. "The current share price assumes no incremental increase in revenue growth in the U.K. Diagnostic Imaging division or Aged Care division," ABN says, adding on a 12-month view there is also "significant upside potential in DVC that we have not captured in our forecasts". Keeps at Buy; target price A$4.00 vs last trade A$2.48.(SVM)


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## Sean K (29 June 2006)

Another upgrade for DCA today. Looks like it hit bottom at about $2.46. You're a genius jet-r.


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## jet-r (29 June 2006)

finally..!  DVC is starting to take off!! I think people have got over their emotions and start to realise that DVC is undervalued.

I realised my loss last week and at the same time bought back another 4000 units at $2.51, now happily sitting on some paper profit.

Good luck to all DVC holders.!


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## spottygoose (3 July 2006)

Announcement. Regis aquistion no longer proceeding as parties could not agree on price.


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## Sean K (2 August 2006)

This has been quite possibly my best stock pick of the past 3 years! I originally bought in at about $3.75, then topped up at $3.00 when I thought it was oversold. I then got excited recently with the possibility of a NHS contract and ABN having a $4.00 target on it. Now, no contract, increased wages, interest rate rise....yada yada yada....

 

MUST be good value at pre 2004 prices. Hitting support area at $2.25. 

A BARGAIN! Please someone buy this stock, I need to eat this month....


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## Absolutely (2 August 2006)

I feel for you Kennas.

Unfortunately I had to engage my stop loss yesterday morning and busted out of it with a tidy loss. I was expecting it to surge up again today since my stop loss was activated  but turns out the stop loss saved me losing an extra $700 though.  

I am looking for support to buy back in and and try and regain some losses. Most analysts seem to still support the stock despite a series of bad announcements.

I just wonder if there is more bad news out there. I recall that the stock fell 11c the day before the UK contract losses were announced so I am sceptical about the current round of selling.

Bottom got to be round here somewhere though..................


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## Sean K (2 August 2006)

Perhaps it will be value at $1.50!


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## Sean K (18 August 2006)

Well, it certainly bounced off $2.25, now back at $2.70 on takeover rumours. Similar rumours linked to HSP recently.

1018  [Dow Jones] Private equity hype extends to DCA Group (DVC.AU), up 6.4% at A$2.67 on trade of 1.5 million shares early. Unsourced item in AFR's Street Talk column says talk is that DVC could be subject to bid at A$3.10 a share, says Pacific Equity Partners one of names linked to group. (LMF)


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## jet-r (18 August 2006)

DVC is up 15% in two consecutive days with decent volume. The annual result is due next Friday and with some take over talk.
even from the technical perspective there is a nice break out.
Good luck to those faithful DVC holders. Its finally starting to pay off.


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## Sean K (18 August 2006)

My average cost is $3.50 so I've got a while to be   

Perhaps time to buy some more...


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## Prospector (18 August 2006)

DVC has been kind to me in the past but reduced my holding some months ago.  I still believed in their concept but had too much to risk.  Seems at last that something positive is happening again.

Lots of takeover rumours in the market at the moment....


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## redandgreen (18 August 2006)

Prospector said:
			
		

> DVC has been kind to me in the past but reduced my holding some months ago.  I still believed in their concept but had too much to risk.  Seems at last that something positive is happening again.
> 
> Lots of takeover rumours in the market at the moment....



AFR this morning
suggests a takeover bid of $3.10 per share is imminentl


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## michael_selway (18 August 2006)

redandgreen said:
			
		

> AFR this morning
> suggests a takeover bid of $3.10 per share is imminentl




Hi T/O by whom?

do u have teh article

thx

MS


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## redandgreen (19 August 2006)

michael_selway said:
			
		

> Hi T/O by whom?
> 
> do u have teh article
> 
> ...



Street Talk   P34 "Plenty of PEP in talk of takeovers"   ...... according to talk, the private equity bid for DCA will be at $3.10 per share .......FRIDAY AFR
interested to read the announcement that the company claims to know nothing about it


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## redandgreen (19 August 2006)

Pacific Equity Partners, (PEP) to specifically answer the question.......


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## jet-r (8 September 2006)

whats happening with DVC today?
up almost 10% by now.. NO announcement, no news?
take over rumour agian?


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## spottygoose (8 September 2006)

Have no idea, wondering the same thing. My only thought is that is is the take over rumour and perhaps some are in the know but it could be anything as I am generally the last to know! One would think that asx will issue a please explain.


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## spottygoose (8 September 2006)

MELBOURNE, Sept 8 (Reuters) - Shares in Australia's top 
private radiology operator DCA Group jumped as much as 11 percent 
on speculation that a private equity group would launch a A$1.66 
billion ($1.26 billion) bid for the group on Friday. 
DCA Group would make a highly desirable target for a private 
equity fund because of its secure cashflows from radiology and 
aged care, said a source with another private equity fund, who 
declined to be named. 
"The rumour is there's going to be a A$3.50-a-share private 
equity bid this afternoon," said a health care analyst. 
DCA shares jumped as high as A$2.88 and last traded up 9.2 
percent at A$2.84 a share. 
"There has been a lot of volatility in the share price over 
the past six months or so and a fair degree of volatility in 
volume as well," a DCA spokesman said on Friday, in the company's 
only comment on the latest share price jump. 
Last month, following a sharp share price rise on speculation 
of a bid, DCA Managing Director David Vaux said the company had 
received no offer


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## spottygoose (9 September 2006)

DCA dissects multiple takeover bids in $2.5bn private equity raid
Elizabeth Colman, Robert Clow 
September 09, 2006
DIAGNOSTICS and aged healthcare giant DCA Group is considering multiple takeover offers in what appears to be a private equity raid which could see the company sold for around $2.5 billion.
Shares in DCA surged 17 per cent or 45c, closing at $3.05, with 42 million shares changing hands yesterday after a brief announcement from the company. 

The jump in price valued the company at $1.4 billion. 

Following weeks of rumour, DCA Group, Australia's biggest owner of radiology centres, confirmed it had received proposals. 

DCA told the Australian Stock Exchange that it was considering "highly conditional proposals regarding the company's ownership from independent parties" and had appointed investment bank UBS as defence adviser and law firm Freehills. 

The company did not disclose the bidders, but The Australian understands Ironbridge Capital has expressed interest. 

Pacific Equity Partners and Macquarie Bank are also believed to be interested. 

Nonetheless, shareholders said that DCA was not under an urgent obligation to accept proposals. 

"There's a huge difference between what people view as the price to pay operationally, and what they'd pay strategically - DCA is in quite a strong position," Rob Patterson from fund manager and DCA shareholder Argo Investments said. 

Ramsay Health Care, which is Australia's biggest private hospitals provider, decided not to put a proposal to DCA. 

"We looked at it but decided it didn't suit us," Ramsay managing director Patrick Grier said yesterday. 

Some analysts speculated that a buyer could separate the company's aged care business. 

Macquarie and Ironbridge are already investors in the aged care business. 

PEP sold its New Zealand-based Guardian aged care business to DCA and has separately looked at MIA, a diagnostic group that has now been merged into DCA. 

All bids are likely to be made by consortiums of more than one party. 

DCA said it would seek unanimous board approval before accepting proposals. 

Market analysts said that a takeover offer that split the diagnostic and aged care businesses would also alleviate competition concerns if the buyers wanted to sell to other operators such as Symbion Health or hospitals provider Healthscope. 

But one healthcare market analyst said DCA's existing management was viewed as strong and, as such, an industry operator was not necessarily involved. 

The company was also said to have the "best margins in the business" and was heavily leveraged with about $700 million in debt. 

"There's not going to be a whole lot of savings," said another analyst, who asked not to be named. 

He added that while the hallmarks of private equity were present, the DCA deal was not identical to Coles Myer, which this week rejected a takeover bid by US firm KKR. 

DCA last month forecast a modest lift in profit for the year, despite salary costs. 

It posted a $73.3 million net profit for 2005-06, up 30.4 per cent, and in line with previous guidance. 

However, perceptions that the company was underperforming have persisted since a major profit downgrade in May. 

Shareholder Merrill Lynch also this year appeared to dump its 5 per cent stake in the business.


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## scsl (25 September 2006)

The Board have just recommended a CVC bid of $3.50/share.


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## Sean K (25 September 2006)

scsl said:
			
		

> The Board have just recommended a CVC bid of $3.50/share.




In the ansence of a higher one. There's plenty of private equity sniffing around out there. Would not surprise me if someone else jumps at this. I HOPE SO!

Two takeovers in one day for me (DVC, HDR).   

HSP and FGL will probably go now....


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## jet-r (25 September 2006)

when will it resume trading?


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## scsl (25 September 2006)

jet-r said:
			
		

> when will it resume trading?



DCA (and HDR) are now out of trading halt.... But DCA is trading at below $3.50


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## Prospector (25 September 2006)

You do realise the reason why the SP is rising today is because I sold out of them on Friday


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## Sean K (25 September 2006)

Prospector said:
			
		

> You do realise the reason why the SP is rising today is because I sold out of them on Friday




Nooooooooooooooooooo!!!!!!!!!!!!!!!!   

Only missed a few% Prospector. The gains were made the past 4 weeks.


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