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I have been following this board for some months having bought a few shares in late summer 2022, on the basis of the cash position of BDev and the clear need for housing additions in the UK. (i.e. It was just a matter of time before house sales would restart and the company could ride out any downturn IMO)
Then I noticed the share buybacks. The latest round finished in December. BDev bought back 12.7 m shares for a consideration of £49.2m. Average price was £3.87 per share. Today's price is £4.62. So that's a profit of 19.5%. This seems like a good thing but I don't understand how BDev accounts for this in their results?
As is often the case alck of sales in Nov, Dec means nothing except that folk prefer to move house after Christmas instead of before. Back in the 70's we saw some horrendous interest rates and inflation but peopel still insisted on buying houses whenever they could (I was one of those buyers) because they knew that almost any house they bought would be more expensive next year. This phenomenum is still happening because there are still not enough houses to buy in the UK. So if you sold Barratt or Persimmon back in December you were wrong as I advised at the time.
Started to build new HB portfolio with Barratt D.
Will continue to add as I do not see a house price crash in 2023/24.
In my opinion only ...gla
Relax boys just a matter of time SP is surging along with Persimmion back where they both belong
Interest rates dropping
Never mind £5 expect this back at £6 in short order
RT003, I think you've been misquoted...
Quoting myself and that 500p target will go today
This will do well but before continue going up it will go down and there more reasons for it than not.
Recession, income, unclear future, higher loans, cost of matrials and list goes on... so don't be fooled by these dummy rises will not last.
If you are A long termer you will make money if you are deciplined to hold and keep holding beyond 2024. Otherwise you are playing with fire here.
GLA
IMHO
DYOR
Link below to an interesting analysis of the main UK house builders from Dr David Paul @ VectorVest.
https://www.youtube.com/watch?v=xKaXuthR75k
Persimmon have put out their report this morning which is on balance more optimistic than Barratt, with fewer sales being a short term issue with the longer term still bright. The market liked what Persimmon said and is currently up 9%. Barratt has clearly benefited from the rise at Persimmon.
What has happen in the last 24 hours
Was to be expected and will probably be reflected across the board for the house builders for H1 2023. As we move through the next half year I think we'll see a continuing improvement/acceptance of the new mortgage conditions, easing cost of living effects and possibly government incentives for first time buyers. GLA, keep the long-term view
Really down about 30% on last year so grim news- lower volumes and lower values . Pleased the company has a big cash pile.
Indeed it was and with a fair wind I expect this back above 500p by April
It's a bargain basement play. 70 million people in Britain. Most want to buy their own home. Whatever it costs.
......and delighted with an average of 406.25
I simply dont buy into this housing slow down and have also bought heavily in Taylor Wimpey and Persimmion
The facts that dividends are in play is an utter bonus
People so easily forget that hardly anyone buys a house at this time of year - ask any estate agent. Once Christmas is over and done with folk start looking for the next house again, will be doing the same meself.
They are pretty committed on the buy back, it’s easier to reduce or stop the dividend same as Wimpy did. What’s worrying me is the Directors Sales are way bigger than any buys, so something isn’t smelling so good right now. Maybe it’s the slowdown which the insiders see weekly, we only see it after in updates.
Yes, of course, which is great as long as trading continues to be strong. And maybe trading is fine and TheBigMan21's comment isn't reflective of the company as a whole.
But if trading collapses then the company will need to hold onto cash, which means they should stop the buyback. In 2008 all the UK house builders were happily buying back stock and then the market collapsed and they had to issue equity to survive, effectively buying high and selling low. The last thing we want is for that to happen again.
The buybacks will make the. EPS. and. div look better. because there are s. smaller number. of. shares between. which they have. to. divide. it.
Surprised they're still doing the buyback if trading is that bad.
Things are not looking so good for some Barratt regions. One office I know very well in the south west has only managed 16 sales in 5 weeks. This time last year that figure were 60 plus sales. A lot of regions are forward sold but come March / April things are going down hill. Caps have been put on land purchases to protect cash in the bank and talk of redundancies to office staff but this isn’t until early next year
Haven't been on here for a while ( concentrating on new film script and book. Tough at the top). But, to reiterate: Barratt has always been pro-active in growing its pool of home-grown apprentices. As the old guys retire, young, well-trained-up dudes will step into their shoes. Tradesmen from EU countries can still come here, and earn good dosh. Their motivation for coming to the UK has always been the top money; not sentiment. The Pole are/were bril workers. Collectively, they sent a fortune back to their country (+ UK family allowance) and , in doing so, raised the Polish economy. Last two years I bought these shares as they went down from around £8. The fundamentals of this company are solid. And I've got my sell price set at... £8. May take a little while, I know - but better than money in the bank, in my opinion. And what about that last divi, eh? GLA.
No need for apologies strictly, I'm not a frequent visitor to these pages. Thanks very much for the reply.
The only part we disagree on is wrt the Polish plumbers, the Bulgarian brickies and the Czech chippies. It wasn't the builders who sent them home, that was the great British public when they voted for Brexit. The builders were desperate to hold on to them, but people tend not to stay in a country where they don't feel welcome.
Krusty,
Sorry for the tardy reply ~ I’ve only just come onto LSE BDEV chat and seen your comment…
Referring back to the numbers in my previous comment here, the big contrast in the differing fortunes of Bellway on the one part and Barratt on the other (and for Taylor Wimps it was even worse than for Barratt) due to the credit crunch is largely down to the big contrast in the relative amounts of balance sheet leverage of the different companies…
So that’s now been sorted in respect of all the above ~ none have excessive borrowings compared to last time ~ so one hopes that the lesson about not getting ahead of themselves financially has been learned..?
But another element to this ~ one which I have reflected upon ever since the credit crunch, but which I never seem to see discussed elsewhere other than in our crew’s investing blog is this:
Just imagine if we’d had a government at the time of the credit crunch that had had a bit of wisdom & foresight ~ sufficient to say to the house building industry “Don’t slow down the sausage machine, don’t send home the Polish plumbers, the Bulgarian brickies and the Czech chippies ~ we’ll guarantee to take your surplus production off your hands for social housing at cost plus x until the economy & the market turns around”.
If they’d done that, which would also have meant that the brick kilns wouldn’t have had to shut down (as you can’t just switch those on and off like a kettle), the industry could surely have just kept chuntering on with building at full steam ahead instead of more or less halving in the interests of survival and which has caused damage to production capacity that seems still not fully resolved..?
Whereas, by sharp contrast, look at the money thrown at the banking sector at the time ~ considering that, as Basil Fawlty might have put it, “Well, they started it..!”
So, if it does start looking like push is coming to shove next year for house builders’ travails, maybe, just maybe, there’s a lesson from the credit crunch in there for the government to learn too…?
Because it’s not just the nasty house builders that are harmed by this (by “nasty”, I mean that the companies we’re invested in seem to have something of a poor rep with the public at large).
Mind you, I’m definitely not holding my breath on that one…!
Strictly
Arso you can't Strictly, never mind I'm sure most of us get the gist. Love the reference to Dick Emery - oohh you are awful!
Thanks for the numbers, no doubt you'll have seen my exchanges with hics below re the similarities or otherwise to 2008. To be fair, there are some pretty scary monsters to negotiate in housebuilding waters next year and, as much as I could argue that BDEV, TW. and PSN (my personal holdings) are much better positioned now than they were then (particularly wrt debt levels) I don't know if that will be enough to help them survive, let alone continue to pay dividends at current levels.
As we don't know when or at what level inflation might peak, how long it will remain above the 2% target, when interest rates might start to fall, the economy recover, war conclude, national/individual debt levels reduce, a Prime Minister & Chancellor survive longer than a school term etc. etc. etc. there's no way we can realistically forecast when things might look a little brighter for potential house-buyers and therefore housebuilders. Since we've already seen a significant recovery from recent lows, though, the market at least is betting that things will improve at some point in the future. So I'm holding for now.
Thanks again, always helpful to get your insights.
K