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PPS
Demos,
In checking the numbers for my previous comment, it occurred to me that there may currently be a parallel for Crest with Battersea, aka Bovis...?
Crest started off like Syd Barrett, in that it reached for the secret too soon with some early sector outperformance in 2015, having only been delivered back to the market a couple of years previously from intensive care, and Mr Market over-responded accordingly.
And now we have Battersea, with decades of underperformance in its CV, having just bought the house building arm of the other woofer of the sector, Galliford.
And now they've had a good half year, at last, and the scribblers have them down for a decent full time whistle result, and once again, Mr Market is off his meds and has put them on a PBV of 1.65 against Redrow's 1.24.
I reckon it'll take a braver man than me to venture into that one right now, though if they're still sustaining it in a few years’ time, then who knows...?
I'm not holding my breath on that, though, and am happy to watch from the side-lines in the meantime...
Strictly
"Strictly, why miss out RDW in the comparison?" PS
..........................
Demos,
I omitted to include Crest in my previous comments ~ a company that is significant to both of us, is it not, in comparison to the others...?
As we know, Crest have been a great Sid & Doris share, and combine that with their disappointing underlying performance in recent times, since pre-covid too, and also that they were a share highly favoured by the market back in 2013, with a PBV at the time above even that of Persimmon, being 1.60 as against 1.41 respectively....
It seems Mr Market is now getting his thinking straight on Crest now, though (still not fully there yet, relatively, IMO, though I'm aware that Cyberduck doesn't, and you possibly don't, agree with that..?) with the upshot that, as of the weekend, Crest's PBV is currently only 1.04, which represents a PBV fall of 35% since 2013.
In this respect, it is in a class of its own ~ even against our pals Inland who have only dropped PBV by 13% over that time.
The upshot is that their market performance, including divs reinvested on the day, has only been an 88% gain since the start of 2013, barely one fifth of Redrow's 402%.
Who would want to have been a long term holder of Crest over the past nine years, eh, with an overall average annual compounding return of just over 7% compared to what's been had elsewhere within the sector..?
Strictly
"Strictly, why miss out RDW in the comparison?"
..........................
Demos, yes, I could have included Redrow, but I've got that in for the blog post I'm currently working on along with Persimmon and our pal Inland, so you should have that shortly...
But here I didn't want to distract from the main point I was making which was to say that Taylor Wimps are in amongst the chasers (though not the leaders) and on that basis is Peter Redfern really entitled to such opprobrium...?
If you look at relative share price performance, though, Taylor Wimps have out-performed both Bellway and Redrow if you're comparing starting PBV at beginning 2013 to PBV now.
Bellway's has increased by 6% over that time, Redrow's has increased by 16%, and Taylor Wimps has increased by 24%.
So I don't agree with commenters here that they have disappointed in their share price performance, unless they are also suggesting that Bellway and Redrow have disappointed more..?
The huge outperformances in this regard have been Barratt, Battersea and Persimmon....
I'm still waiting for Mr Market to catch up with those boys and feel their collars....!
When it comes to underlying performance shining through eventually, as young Macaulay Culkin called out to those hapless burglars in the film, Home Alone
"You can run but you just can't hide..!"
Strictly
Strictly, why miss out RDW in the comparison? Are they not the best performer in this period in terms of growth in BVPS?
But probably the concerns about TW are more in terms of TSR (total shareholder return) during this period. I understand this to be growth in share price plus dividends reinvested. I think on this basis they have somewhat underperformed ....?
Demos
"You have to give Redfern some credit"
......................................
PCla, to put some numbers on it, which is generally a useful thing to do I find, and as I've very recently updated my figures for this particular marker (and providing there are no schoolboy errors or, more likely in my case, senior moments involved in my calculations…? ?? )
So I now have some comparison figures for average annual BVPS growth added to dividend yield from 2013 to 2021 (so, for some of these, 2021 is estimated as we have had full time whistles yet...).
I've given the companies in the same ball park as Taylor Wimps, plus Bellway ~ as this is my benchmark share.
These are as follows:
Bellway 15.6%
Barratt 12.9%
Taylor Wimps 12.6%
Crest 12.2%
And, firmly in the doghouse,
Bovis 7.5%
Now, while I would say that the above figures suggest no cigar for Mr Redfern, at the same time, it’s hardly been a comparative disaster, surely...?
Strictly
You have to give Redfern some credit for keeping the company going when the share price was 4p however there is no doubt that overall we have underperformed against some of the other major house builders
I am pleased he is now departing and giving someone else the chance to deliver the potential that TW undoubtedly have.
Excellent news indeed; tw may now have a chance of achieving what it's capable of with Elliots onboard and redfern out. The gap between tw and bdev, PSN tsr has been widening for years under redfern's Inferior and weak leadership and it's time to close the gap under better leadership. Onwards and upwards, great potential here now redfern going.
This Elliott news has made my weekend. Elliott is now one of the top 5 holders in TW. Elliott typically uses derivatives to build a position in a target company, which is why no one knew of its TW holding before now.
All I know is that, ever since Elliott declared their interest in GSK, my shares in that company have gained by almost 25%. It’s possible that the shares would have gained anyway, but I’m happy to give Elliott the benefit of any doubt.
(Alliance News 10 December 2021) - US private equity giant Elliott Advisors has written to the board of housebuilder Taylor Wimpey PLC, slamming poor decisions by outgoing Chief Executive Pete Redfern.
In the letter, the activist investor said: "Taylor Wimpey is a business with extraordinary potential, powered by talented employees dedicated to delivering high standards of product quality and customer satisfaction. Yet for all this promise, the company continues to fall short of achieving the opportunity inherent in the business.”
"In particular, a series of operational and strategic missteps has resulted in persistent share-price underperformance, leaving shareholders frustrated and lacking confidence in the company.”
Elliott went on to criticise the company's plans laid out in 2018 of focusing on large-scale sites, which it said led to sale-price erosion. It added that Taylor Wimpey was the worst-performing company in its sector during the Covid-19 pandemic, pointing out its decline was 39% compared to Barratt Developments PLC and Bellway PLC's decline of 28% to 29% and Persimmon PLC's of 14%.
https://www.morningstar.co.uk/uk/news/AN_1639164985522051500/elliott-advisors-condemns-outgoing-taylor-wimpey-boss-over-missteps.aspx
Well who says I would have got a job with another builder.... My opinion and that's it from MY point of view only. If this now changes anything and shares go up then obviously I'm happy too, all I'm saying is that I wish him well
The market is after total shareholder return- hence why tw has underperformed. Redfern hasn't delivered the goods.. look at some of his recent decisions they are laughable. E.g major redundancies just as the labour market tightens and sector demand rockets, talk about bad timing! Then he had to pay extra to recruit many back! Worst CEO left in the sector.
All rumours until a TR1 is dropped otherwise. Then it can be confirmed a position is being built.
PR has been steady & sensible!
Having regular divi’s every year has been lovely, if you’re after aggressive growth i’d look elsewhere. As TW hasn’t gone down that road unlike other HB who have & look how badly that turned out for some. :S
Agreed, well said.
At best, Redfern has been ‘ a safe pair of hands’ (aka uninspiring), at worst, his performance has been pretty woeful, for a Footsie HB in boom times. Clearly, the City don’t think much of TW under his management. His departure, plus interest from Elliott, are probably the best things to happen to this company in many years.
No, I've been in and out this share for over a decade. I guess you're referring to the activist Investor Elliots who have taken a position- they too clearly saw Pete redfern's incompetence. The total shareholder return speaks for itself.
I guess you must be the new share holder?
Fantastic news that this entity will now see the back of a very poor CEO. Pete redfern's performance has been bottom quartile at best, in terms of total shareholder return. Glad to see the back of him- a weak CEO, and specialist in underperformance, with a proven track record that he does not have the ability to driver returns even close to sector peers- the gap between persimmon and bdev has widened significantly under his embarrassing tenureship.