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Anyone with shares in Bovis would be wise to sell them now. This company isn't going to improve at all. Check out the Bovis Victims Facebook Group if you can. https://www.facebook.com/groups/BovisVictimsGroup/ I've just seen a replacement paving slab (after their digger broke the original) that is the wrong colour and the wrong size! They didn't even try and cut it to fit! The only outcome will be Persimmon buying Bovis for the landbank.
Positive statement ahead of AGM. Surprised to see such a large impairment for advice concerning Redrow et al bid/merger attempts.
Current forecasts for 2017 financial years: PSN 2.4x TW 2.1x BKG 2.1x Bdev 1.91x (intangibles of 89p stripped out) CRST 1.88x GFRD 1.87x RDW 1.69x BWY 1.65x TEF 1.58x MCS 1.3x BVS 1.18x INL 1.08x
I agree, a real coup for Bovis after the significant damage done to the business by that absolute disgrace of a CEO David Ritchie. He should be utterly ashamed and embarrassed at the damage he did to Bovis homes. Reputationally Ritchie took Bovis from one of the best regarded builders in the sector and turned it into an absolute dog with what is now a pathetic 2* HBF customer rating- the worst in the sector. The warning signs were on the door for the last two years though with his inability to manage the build processes and business strategy clear in his weak trading updates. This begs the question as to how strong the overall board was though and why he was not challenged effectively by the Chairman (and put up for re-election by the nominations committee) who should ensure a strong and competent BOD's. There is no doubt about Greg Fitzgeralds abilities, and with Bovis homes valued on the lowest premium to net assets in the sector due to having the weakest ROCE in the sector there is no doubt it has amongst the greatest upside potential if sector stability continues. The big question is though, will Greg Fitzgerald have the time to reset Bovis's strategy and return it to former glory and upper quartile performance this business cycle? From a risk reward perspective it does look like a compelling buy again now wiith a good yield on offer whilst the strategy and business is re-set. If the business cycle does turn (which looks unlikely at the moment for the next few years) then one could argue this also has the lowest downside risk given its small premium to net assets compared to sector peers, with amongst the highest upside too if the party continues. With that in mind I have purchased a few again here after selling out a long time ago. I still think there is value elsewhere too though- Telford Homes still looks good value both on net assets and earnings multiples. Inland Homes also trades at an even lower premium to net assets than Bovis (although not a traditional housebuilder). Bellway, Redrow and Crest also look amongst the best value in terms of earnings if the party continues.
We are going places! :)
We are going places! :)
That's some wage packet that is, he better be worth it
Didn't see this rise coming in the event of last bidder pulling out! Just goes to show you can never predict the markets! I'm guessing they approve of the new boss?
Hope there is a new bid. Just read BVS RNS stating that new massively overpaid CEO comes from Galliford, and that BVS have rejected Galliford's bid.
I still feel positive about this share :)
New bid coming ? :)
Berkeley
Any thoughts on today's news ?
lol sorry Galliford.....typo time.
I got out a while back at 908p, if it falls back into the late 700's ill consider buying back in. Guess that depends on the Gailford bid as that could bounce the SP if its forthcoming.
Yes 8.5p up as at now.
Down today as c.f. on 30p div. So small fall actually a rise, if you follow me...
From Telegraph : "A top investor in Bovis has urged the troubled housebuilder to call off merger talks with Galliford Try and instead attempt to tease a sweetened bid out of another big rival, Redrow. Bovis, a FTSE 250-listed company, revealed last week that it was in discussions with Galliford about a £2.5bn tie-up, but it had rejected a cash-and-shares offer from Redrow for being too low. Richard Marwood, a fund manager at Royal London Asset Management and a top 10 shareholder in Bovis, told the Sunday Telegraph he would prefer Bovis to do a deal with Redrow, which is 40pc controlled by its founder, Steve Morgan. Unlike Redrow, which focuses solely on houses, Galliford also has a construction arm, which builds everything from gas plants to railway stations. “It would be potentially neater to do it with Redrow because it’s a pure housebuilder,” Mr Marwood said. “It looks a cleaner deal. Obviously the level of the Redrow offer was less attractive than the Galliford offer so it would need to be increased.” Redrow’s cash-and-paper proposal valued Bovis at 814p-a-share, while Galliford’s all-share merger valued it at 886p. Bovis shares closed at 914p on Friday evening. Royal London holds a 3.5pc stake in Bovis. The housebuilder’s shares have plunged in recent months after a profit warning in December, which triggered the departure of chief executive David Ritchie less than a fortnight later. It emerged last month that £7m in compensation had been set aside for Bovis customers whose homes were poorly built. It had also been offering home buyers £3,000 incentives to move into unfinished properties before the end of 2016. Mr Marwood said of the company’s woe: “You’re building houses, you’re not building spaceships. It shouldn’t be that difficult to fix. Bovis probably could sort things themselves, but they would need to get a new chief executive on board and the turnaround might take longer to realise value for shareholders than a bid.” Galliford and Redrow have until April 9 to make a firm offer or walk away, under Takeover Panel rules".
:)
Very limited upside from here imo, in terms of a bid price. Reason being is that a hefty premium to net assets is only ever paid for a strong management team or other intangibles. This has neither, and so its value is only the value of its landbank with a margin of c. 25% built in. Not many other builders likely to be interested at all as the land market is currently very bouyant so no large premium here. Gfrd merger looks most likely imo as geographically thenfit makes sense. All summed up nicely here: https://www.ft.com/content/4344af62-07fd-11e7-ac5a-903b21361b43
There are a lot of others out there who would see Bovis as the right fit and a real target. I am sure there are going to be some more throwing their hats in the ring soon.
Redrow has already pulled out
One can either listen to economists and other "experts" at the RiCS and elsewhere or ultimately trust the market. Bovis shares have been so far undervalued that someone had to make a bid. At just over £9.00 they are beginning to reflect the value of their landbank and planning permissions; if they were selling less houses at prices in the market 3 years ago.! With UK house completion still running at 150000 a years below demand for the last 3 years ( see Persimmon BARS chart) and more so going further back, Bovis still represent stunning value fro investors and any takeover bidders at £10.50 and above.
yes, sometimes this wait and see game actually works. Positive article and I will definitely wait and see if someone else bids ( Berkeley again?)