Berkeley Group Share Price (BKG)

Sold 70% of my holding on Friday at just over £48. I think this is fully valued at the moment and could drift backwards. I have been a long-term holder and it's been a good investment: management remains some of the best in housebuilding but I just don't like the macro background and the prospect of a Labour government. That will be bad for Berkeley's middle-class customers and profitability.

AceOfClubs

Berkeley and M&G’s plans get green light despite concerns about ”an incongruous, monolithic wall of development”

Housing secretary Michael Gove has given the green light for a 2,150-home development on the site of a former Homebase and Tesco’s in Hounslow, west London.

A planning inspector had recommended refusal for a development of 16 blocks of up to 17-storeys on the two sites at the Tesco and Homebase sites on Syon Lane on the grounds that some of the buildings were too high.

The planning applications were made by St Edward Homes, a joint venture company owned by M&G Investments and Berkeley.

Nearly 4% now. Clearly the market thinks little of the report which if you read it one way is understandable. The run up this week was presumably based on the hope that the report would be more positive and while it certainly isn't negative it is a steady as she goes so all those hoping for a jump are baling. It all seems to be small numbers of shares so presumably pis rather than iis. If it had reached £50 I might have sold some myself as taxes are due.

Waiting to see how far it drops.

Very positive half year report, the nearly 2% share price drop seems a bit harsh

As I write, Crest Nicholson is trading at just under 50% of net tangible asset valuation! £876.6m of net assets, priced at £404m market cap…. Crazy!!

Even assuming worst case scenario:

Write the £29m intangible's off- leaves £847.6m net assets.

Inventories were sitting at £1108.1m on the latest 2023 balance sheet. So assuming worst case scenario, let’s say a write down of 20% due to market conditions- (£221.62m).

LEAVES £626m OF NET ASSETS (WORST CASE). That’s a 55% premium on current market cap!!

Being as Crests business is also predominantly in the south of England, it seems like a good opportunity for Berkeley to put a bid in to get the assets on the cheap. The latest accounts show it has £1070m of cash, so it’s well placed to put a bid in.

I’m not saying I’ve heard any rumours of this, just that it would be a great opportunity!