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Troubles hi,
Thanks again for the quotes, will have to sit down for an hour to read them.
Have a great day too, Suns out !!!!!!
ATB
Tom :-))
Cheers Tom,
Chttps://myopencountry.com/news-fun/71-inspirational-hiking-quotes-to-get-you-motivated/
Have a great day.
ATB
Troubles hi,
That vid was absolutely fabulous thanks, I have saved a copy :-))))
Cheers
Tom :-)
Hi Bamps,
Wonder if some of his pubs will be built to this design :
https://www.youtube.com/watch?v=XP4C-m3U8F0
Don't know whether Taylor Wimpey can manage anything like this ?
BoL
Hi Bamps,
Founded in 1799 and taken over by Li Ka-Shing - don't think Old Speckled Asiatic Pheasant and Buddhist Ale will quite taste the same, somehow. Turks taking over our steel - what next ??
Hi troubles
My lad took his family round the titanic museum in Southampton
He phoned me up to ask if we got any relations that were on it
I said the band leader used to live near my great grandmother and the story goes they had an affair. Well that didn't last long and here I am :)))
Been counting my pennies after yesterday's takeover of Greene King :))
Roll up, roll up house builders for sale take your pick they're all cheap as chips( well not from my local anyway)
ATB:))))))
Hi Nige,
Forgot to mention - they all said the Titanic was unsinkable.
BoL
Hi Nige,
I prefer to wait if necessary to buy a pair of good quality boots from a shop with a good reputation where they take their time to ensure that they're suitable and fit correctly.
With a bit of spit and polish and occasional dubbin they can last a lifetime.
BoL
Hi TMT
I also recommended bwy, with bdev as the safe option. Main point is diversify a bit in builders. Having said that bdev FinRes 14/09/19 (and XDivDt 11/10/19 > 5%), which I expect will be good (but I got psn wrong!)
Hi Troubles
Reputation is very important, but I think it doesn't matter too much when supply far less than demand. If you want some new shoes and the shoe shop only has 1 pair in stock (that you don't like much) do you buy them or not?
Houses not quite like that cos most people (for whatever reason) think I Must buy a house.
BoL
Hi TMT, also worth noting that Wimps are heavily investing cash into their customer centric strategy to create a "digital" business. This involves all aspects of their business, back office functions, site build and manage functions and customer facing functions. Wimps are probably the leader in this area compared to their peers. They have recognised that punters will pay a premium for a more aspirational and individual experience when purchasing a new home. This digital business model enables Wimps to move closer to an individual build to order model, and are probably the most advanced amongst their peers in this approach. Gone are the days of build em, and then try to sell em. This helps smooth out the cyclic nature of the sector and should be reflected in more predictable returns for investors. Personally, and notwithstanding the Brexit background, I would expect Wimps to prosper and become the leading brand of the larger mid market builders. Of course, IMHO.
At least, the PSN results have got all the builders back into synchronised swimming mode for now, although there was a scary dip in PSN's SP first thing this morning - wonder if anyone managed to take advantage ?
Don't know how long it will last before some politician starts blabbing regards their own self-interest.
GLA
@WW 'Maybe the surprise is that LON and SE has shown good reliance considering it includes the expensive central London portfolio (average price over £1M).'
That was surprising. Thanks for the breakdown, BTW.
@Tom
'Yes TW had a small temporary reduction to their anticipated Operating profit but that was down to a situation out of TW's control and a lot of other builders suffered the same due to increase costs. My point was simply to TW's report that's all and not comparing that report to others.
Anyway TW have taken it on the chin and move on.'
You're right, of course. The reason comparing the report to others matters is because not everyone wants to be invested in this sector right now (due to Brexit, etc), and those who do want to will be comparing the different builders and deciding where to invest. These companies are competitors, not only for selling houses, but for investor funds. Brexit, etc, affects all of them and resolving it will benefit all of them. But the SP is going to be affected by comparisons between the companies.
TW got hit in their SP because the comparison, particularly on margin, looked bad for them compared to their competitors.
I'm still not in TW, though I am in PSN. I'm sitting on some cash which I intend to invest in early October. Nige thinks I should put it in BDEV, but right now I'm leaning towards TW. I'm not as bothered by the drop in margin as the market is. I do think that explains what we've seen on this share price.
Hi Tom
TMT pretty much answered for me.
Four factors to watch for growth shares:
EPS Growth (down)
Margin (down)
Cash (down)
Divis (no change - will be announced with FinRes).
So certainly not growing as fast as it was.
"Bad" is not a very precise word. You could look at it from the point of view that "Bad" results are when Sp drops after them.
BoL
Hi TMT, you are correct that reduced operating profit is not good. Markets like to see steady growth, and tend to over react when that pattern breaks. Just to add a little more colour to your point, analysis of segmental information shows just where the damage has been done. Business units: NORTH flat operating margin, LONDON and SE fallen 3.3%, CENTRAL and SOUTH WEST fallen 4.4% and SPAIN fallen 5.4%. So, this reflects not just increased costs but also the need to offer incentives (discounts etc) in some business units. Which of course reflects the general market activity across the sector. Maybe the surprise is that LON and SE has shown good reliance considering it includes the expensive central London portfolio (average price over £1M).
Hi Tom,
Like the fact that TW have moved their attention towards customer satisfaction which will pay 'greater dividends' in the long run. PSN may have managed to maintain their profit margins ATM but reputations can take a long to recover (if ever) and at great cost to everyone concerned.
ATB
Sorry " moved on "
TMT hi,
Yes I see where you are coming from but I am not invested or involved in PSN.
Yes TW had a small temporary reduction to their anticipated Operating profit but that was down to a situation out of TW's control and a lot of other builders suffered the same due to increase costs. My point was simply to TW's report that's all and not comparing that report to others.
Anyway TW have taken it on the chin and move on.
ATB
Tom :-)))
Hi, Tom. Key point, very simply.
TW
"Operating profit* of £311.9 million (H1 2018: £344.3 million), reflecting higher build costs and geographic mix, partly offset by higher volumes, delivering an operating profit margin of 18.0% (H1 2018: 20.0%)"
Out of every pound, they used to make £20 profit, now they only make £18. That's bad news.
PSN
"Underlying new housing operating margin up by 130 basis points year on year to 31.0% (2018: 29.7%); a reduction from 31.8% in the second half of last year"
Out of every pound, they used to make £29.70 in profit (H1 2018), £31.80 profit (H2 2018), now they make £31.0 (for the first half). They are making a little less profit per pound than they did the last half of last year, but more than the first half last year. That's good news, very good news if they really are increasing their spend on build quality and customer service.
Whatever is happening out there has lowered TW's profitability and not done so with PSN. That's what has driven the market. TW has to increase volume to maintain the same gross profit, PSN doesn't.
And of course, PSN's margin is much higher anyway. That means that the gap between them on profit margin, which was already high, has increased. The only reason PSN's price isn't much higher, relative to TW (IMO) is that they've rubbished their own reputation and need to rebuild it.
TMT hi,
Yes I agree with most of what you say and I agree that the main driver for builders is still Brexit uncertainty together with other political uncertainty. Personally I say this is not down to TW. results but down to the current world sinario's. The report specifically say's "We have not seen any meaningful change in customer confidence, with positive underlying metrics and forward indicators. We expect full year results for 2019 to be in line with expectations"
We still have great dividend payments and as Troubles pointed out very good category finals in the forthcoming award ceremonies.
My post was about a statement that said TW report was Bad, please point out if you will the BAD comments within the report as I have not seem any apart from the comment that has hit all builders re experiencing higher than expected cost inflation, driven primarily by underlying cumulative inflation, exchange rates impact on the cost base of suppliers, and a higher than expected demand in the short term which has impacted operating profit margin. We anticipate that build cost inflation will be c.5% for 2019 (FY 2018: 3.5%).
SO overall the report was not so bad as suggested and applies for most House builders and construction activities.
https://www.lse.co.uk/rns/TW./taylor-wimpey-plc-half-year-results-for-the-period-end-30-june-2019-l2f3pum2zis2q3l.html
Cheers
ATB
Tom :-)
Tom, Nige will answer for himself, of course. But I agree with him that the TW results were bad.
All those things you mentioned are 'scary' (causing people to be afraid to buy builders) because people think housebuilding is still cyclical (I don't), and those things can take us into an economic downturn. But those things really have nothing to do with the results. They affect how the market views the share, and thus the SP, but they shouldn't really have affected results much yet. We aren't really in a downturn and housing demand hasn't dropped.
So the reason the TW results were bad is because the margin dropped. Even before we really get into a downturn, even while people are still buying houses as fast as they can be built, TW saw a drop in their profit margin. People didn't expect that.
That's also why PSN hasn't been hit. They had lower revenue, at least in part because they've delayed some sales for quality reasons, but they maintained their margin pretty well. PSN went lower with the market, and because the market doesn't like builders when people expect a downturn, it went lower faster than the market as a whole. But the PSN results haven't really affected it much at all.
The main driver for builders is still Brexit uncertainty. IMO, either doing Brexit (any kind of Brexit, deal or no deal) or stopping Brexit will be positive for builders before long. Neither outcome is going to kill builders. The thing that is hurting builders SP right now is uncertainty. Remove the uncertainty and people will find that these companies aren't out of business and are still making money, under any scenario, and things will go.
Nige hi,
Re your comment "Thing is I don't think people were expecting TW results being so bad"
Are your referring to the Half year results for the period end 30 June 2019. Please can you elaborate why these are so bad and why has this forced the SP to where we are now ?????
Pete Redfern, Chief Executive, commented: "We have made good progress in the first half against our long term strategy, underpinned by our continued commitment to our customers, build quality and employee engagement. We delivered a record sales rate in the first half as we saw strong customer demand for our homes in a stable market and the success of our strategy to build more homes on our larger sites coming through more quickly than anticipated.
I would suggest that the results are rather OK reflecting on the World issues, Trade wars and Mr T doing his thing and especially the Brexit mess.
ATB
Tom :-)