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They say the markets never wrong. PSN are almost the worst performer of the major builder YTD. They have been running hot since before Covid, and at some point given current headwinds would plateau. Seems that has been confirmed today.
On the other hand, Vistry have been rebuilding their business (notwithstanding Covid) over the last few years, so I expect their update tomorrow to show more headway in the key metrics. Hopefully the market will reward this.
As for Wimps, I suspect that the jury is out at the mo. We will need to see what shape the overall market is like in a few weeks, otherwise any positive progress will get drowned out. I noticed they contracted for a new IT platform to manage all environmental and build quality functions and processes yesterday. This should provide productivity gains and help position Wimps as one of the better managed builders with respect to these increasingly important aspects of modern building requirements. Should also help push through planning applications a little more speedily.
Hopefully the US employment data points today and tomorrow won't be running too hot, otherwise the US market might just interpret that as requiring more large interest rate rises. A flattening out of payrolls would do nicely (not too hot, and not too cold). Could od with the markets settling down for a few weeks.
Finally, Boris still playing for time by resigning Conservative leadership, but wanting to stay on as PM for a while. "I'll behave myself honest ...". IMHO he should go now and we can get the grown ups back in UK GOV running the country for the benefit of all. This is no time for amateurs. I am assuming of course that we have any "grown ups ...".
PSN results are a bit of a mixed bag. Certainly hasn't impressed the markets, but nowhere near bad enough to drop the SP c.6%. Still saying f.y. profits likely to be ahead of forecast although volumes down. Not much of a steer to indicate what might happen here.
Hi All
Persimmons and vistry will read good, I haven’t seen a change recently so should make nice reading!
How they see the future will be most interesting.
Good luck all and happy trading
My guess is that there's a lag when it comes to the labour market and thus housing. 1 Economy starts to crack, 2 companies stop hiring, 3 proverbial hits the fan, 4 companies start firing, 5 unemployment goes up, 6 only then people stop buying houses or even start selling. My guess is that we're somewhere between step 2 and 3, as unemployment has been low. However, the stock market is forward looking and already prices in steps 4, 5 and 6 at least to some extent.
So I won't be surprised if Q2 numbers for house builders are good. It's probably guidance about next quarter that will move the share price and I expect that it might not be good. However, this might already be priced in. I'm never sure how the market will react on news!
Hi BigMan. No probs. I just thought the numbers seemed a little skewed to the high side :-). We should get some colour from PSN and Vistry as to future order book and cancellation rates. See what gives then.
apologies, I was referring to the division and not site - the division I operate from push around 800 units a year
Hmmm, be interested to know which site you are referring to. Most major house builders average around one sale per site, per week max, with a run rate of around three hundred or so sites on the go.
One site closing 26 to 30 sales in 3 - 4 weeks is extraordinary.
I work for one of the leading Housebuilders and the last 3-4 weeks sales have been rock bottom - in fact in 2 weeks we have sold 4 houses and our target should be around 26-30 units..... This FY is going to be tough!
Vistry Friday
Forgot to add. Lots of US data points on jobs and Fed commentary on the interest rate roadmap due the rest of this week. Likely to be bumpy given current market nervousness.
From a personal perspective, looks like we will soon be rid of "Liar, Liar, Pants on Fire ..." , although sterling will likely be under pressure until new more responsible management in place at No 10.
Persimmon trading update tomorrow.
Well, the Construction PMI quickly put the kibosh on the builders in general at 0930 hrs. Consensus was for 55, and 52.6 was announced. Also, it suggests that householders had the biggest slow down. The commentary was quick to highlight that the builders are expecting a slowdown, although these were just opinions from talking heads looking for headlines.
It's hard to correlate this narrative when ALL house builders have stated brimming order books in the last month or two, and confirmed year end targets above previous year.
Unfortunately its the market that sets the share price, and is responding to the usual negative narrative from media and commentators.
Still, these are the times which allow an accumulation shares at a decent price which will undoubtedly prove to be a solid return on capital over the next few years. See what PSN and Vistry have to say tomorrow and Friday.