Riding the 'seniors tsunami' | The Australian - thumbnail

Ingenia – Riding the ‘Senior’s Tsunami’

June 26 2012

CLIENT | The Australian 26-Jun-12 |  Ingenia Communities Group ‘Riding the Seniors Tsunami’

Extract from the full article which can be found at,  LINK | Ingenia – Riding the ‘Seniors Tsunami’

 

IN an uncertain world, if there is one certainty about the future of Australia, it is the ageing of its population.

Yet investors will be hard-pressed to find long-term thematic stocks on ageing on the Australian stock exchange, says fund manager Simon Owen.

The few stocks that can be described as truly aligned to the ageing population are Ingenia Communities, Ramsay Health Care and InvoCare, a funeral business.

Owen, the 43-year-old chief executive of Ingenia Communities, the former ING Real Estate Community Living Group, believes strongly that investors now recognise this thematic investment. Recognised as one of the most knowledgeable people about the retirement industry, Owen has salvaged what was left of the listed vehicle.

It was a baptism of fire with its share price dropping to 3c as it struggled with gearing of more than 70 per cent. Since then, he has turned the company around, successfully internalised its management and renamed the company Ingenia this month.

“There is considerable recognition among investors of the ageing population and the impending “seniors tsunami”. The challenge has been that some senior living providers, like many businesses, overpaid for assets in the years leading into the GFC and then compounded the problem by over-leveraging through debt, which in many instances is still working through the system.”

“We now have a sound business. Our strategy is on highly accretive growth. We are not interested in the size of the business. Our share price is at a 45 per cent discount to net tangible asset backing.”

“FKP is trading at a 60 per cent discount. Therefore, every time we deploy capital we have to ask ourselves: is this in the interest of our unitholders? We recently spent $2 million on an acquisition that will be highly accretive.”

“When we went on our roadshow after my first result in December 2009, we saw three institutional investors. No one wanted to see us. On the last roadshow, we saw about 30 institutional investors.  Our register has changed from having a lot of traders to mostly institutional investors because they like the long-term thematic, of Australia’s ageing population.”