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Anybody know why the DCA group is falling everyday especially today?
C L
C L
DVC - DCA Group
- Thread starter stock passionate
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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!
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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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.
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.
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....
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....
Sean K
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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.
Oversold. If you're a long term investor, this is worth considering right now.
3 veiws of a secret
3 veiws of a secret
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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!
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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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.
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.
Sean K
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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.
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.
RichKid
PlanYourTrade > TradeYourPlan
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BraceFace 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.
RichKid
PlanYourTrade > TradeYourPlan
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RichKid said:
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
Sean K
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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.
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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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 !!
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 !!
Sean K
Moderator
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I agree Sam. I bought a few more. Averaging down a bit.
