in building sector right now PE of only 16, results out on Friday.. should be very good, get on it
at present sp,a 20% annual compound return on investment would need a SP of winter 14 408p winter 15 490p winter16 587p winter 17 705p what are the chances of that happening do you think?.
Great post. SP valuation in a nutshell explained .I think The Sales Director is fully aware of the increased margins kicking in with forward sales. 2013/.2014 figures really reflect the market 2 years ago as Heleco flagged up where TH had to sell lumps of plan to kick start construction and the only way to have achieved that was to offer concessionary prices.We havent really cashed in on the uplift so a P/E on this years projections of 16 / 18 shouldnt be too ambitous Schemes such as Lime Quay, The Boatyard were conceived before the market movement and also with staged releases responding to improved pricing.These are the ones where the gross will go through the roof In terms of getting a pipeline of 5000 I agree thats ambitous but 3200 should be readily achievable Its extremely difficult trying to estimate completions /handover dates to see which come in to which finacial year .Lime Quay is anything from Winter 2014 to May 2015.They operatae a"dual monthly" construction update which seems to be a little stretched Letss hope for niot too many disruptions It would be useful under "gallery" on their developments on the website to have photographic images of work in progress so wecan guesstimate and watch those little beauties rise
Great post,thanks....a P/E of 15 gives a return of 6.66% of which a third is paid out as dividend and the other two thirds retained by the company and added to the balance sheet.So a P/E of 15 is not a fantastic return and only reasonable if future pfofits are expected to grow by 20% plus.That is likely to happen for the next few years but any higher P/E at the moment would see the SP getting infront of the business value.
Comments on P/E of a company.. P/E is just Share price divided by Earning per share At the moment TEF is around 24; ( 342 /14.3 ). Looking to the future sums. The Market is looking at ; DATE REVENUE PROFIT EPS DIV 31/3/14 144M 18 23.8 7.90 31/3/15 165M 20 26.8 9.0 So on these figures the market is looking for 360 and 405 for the following two years for a P/E 15. However, from comments by TEF we know that these could and will be beaten. Subject to completions. If both half totals for revenue are combined and the 2nd half is the same as 1st for this year the total is 146M. So already this is above the market and we know that the 2nd will be greater than the 1st. So this implies that we are looking at revenue around the 165M and 26.8 EPS for 31/3/2014.and a DIV about 9p total This means we are looking at 405 to 420 for March 2014.on a PE 15. Looking forward to 2015 and completions coming onto the market we are looking for 220 M Revenue / EPS around 36 and a share price.around 540. Regarding 5000 completions this is a big ask to be achieved internally. You will have to buy 2 slots for every one sold. So they have sold 1850 to date from their 2750 plots so the company is looking to purchase land to build 3700 to replace to grow. Regarding the purchase of shares by Sales Director, this is a big tick in the box. After two curved balls from the BOE and capital gains for overseas buyers he must have concluded that this will not affect the sales for Telford Homes for his future performance from his department. All these figures are my own conclusions to what I read and think might happen.
Steph, Terrace, Sain & others o..
Hi guys. Please let me clarify my comments of yesterday on the forecasted SP and E/P calculations. I did not mean to cause any confusion! I based my calculation on £18m. profit after tax. We are making assumptions here of course, and I took comfort from the much higher profits expected in the second half of the year. This is a growing business with ambition and in the light of its displayed success to date we cannot simply multiply first half of profits by 2 in order to get annual profit level. Anyway, £18m. was also mentioned by a couple of you previously, so that was the basis of my analysis. Based on £18m. net profit, I calculate E/P to be 0.30p. That's profit divided by no. of shares in circulation. Then, for the price per share I took 15 (again this is based on sentiment) times multiple, and that gives you 0.30 x 15 = 4.50p In terms of Avant Garde, that was launched in London in April 2011. Most of the plots/floors were taken to the Far East before then. I heard that people who bought at the initial launch made as much as 35%. TEF released the plots in phases, thereby benefiting from each market jump on the sale prices. Back then, given the general state of the market this was a little risky and not the modus operandi for TEF, who normally built and sold and moved onto the next. However, this strategy has paid off and now with the rising house prices, they are always holding some back in each scheme and release in stages. As Sain points out, the effect of Avant Garde on the final results is going to be phenomenal. Of course, not all the completions will make it to the end results as some flats in Avant Garde do not complete until May June 2014.
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