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Predictably bad results as the interim ceo makes provisions and bad comment on prior state of business. Usual stunt so he can appear hero later. I see some big unit trust purchases have gone through at 770-ish, and I h ave followed, buying more. Good value now and maybe takeover to unlock real value...
Property market grows 3.1 per cent year-on-year in Your Move index, with even London seeing a boost Prices edged up 0.3 per cent from December, or 3.1 per cent from January last year, to £300,169. Housing market activity was also higher than is usual for the time of year, Estate Agent Today says, with approximately 60,000 transactions in January, down around 2,000 on 2016 but up by the same margin on 2015. Oliver Blake, managing direct at Your Move and Reeds Rains estate agents, said: "Following a strong December, the performance in January shows a market whose resilience continues to defy the doubters."
Sour grapes? The units are run by accountants but there are poor in house cost control hence the RIOE is slightly less than their peers? Little of this stacks, when buildings are " rushed" but the drivers need drive and passion !
I worked for Bovis briefly as a Regional Director. I was unhappy with Senior HO Management (now gone of course) and the insular way they worked. The watch words were 'Price of everything / value of nothing' and 'if it ain't broke don't fix it'. This included also very poor in house cost control systems and no visibility of the Balance Sheet at a local level. Hence low margins and low ROCE / ROI could not be challenged. A consequence of this was rushed build, an exclusively P+L only focus, and lip service paid to quality control. All in all a very strange non industry standard approach and atmosphere generally. For example Finance Management are regularly promoted to business MDs; This can work, but needs drive and passion - not always the case with accountants..
You were certainly right about the sp.
In the Business Section of Monday's Telegraph by someone named Rhiannon Bury who informs us by Headline that "Housebuilder Berkeley rejects Schroders bid to merge it with struggling rival Bovis" She goes on to explain that "Bovis have issued a profit warning at the end of 2016 and is in a difficult period which has claimed the scalp of David Ritchie" this was due to Pre-tax profits being flat at £160M and £170M below the analysts forecasts of £180M because of the slowdown in the rate of building and sales in December". Apart from the fact that there was a longer Christmas break this year and a sudden very cold snap, house completions were only "moderately affected" with completions picking up on the first half of 2017.Why does anyone listen to these boy and girl scribblers? Even the RICS which has been backtracking like fury, trying to justify its horrendously wrong string of forecasts is still being quoted as a source of economic data in the market, when it has yet to be shown to have any semblance of a prediction model remotely accurate its disastrous attempts. Bovis has a strong pipeline.,Its sales are at much higher value and both continue to rise .The only constraint being skilled labour availability and some increases in building materials. Presumably if the slight chance of a merger.is now off the planning board the share price will fall back to around 800P where they represent superb value and potential for even bigger dividends and further growth going forward..
Source888 - any idea on what impact of this might be on BVS sp ? Merger or dutch auction ? From Times : "Schroder Investment Management, Bovis’s second-biggest shareholder with a stake of about 6.4%, is understood to have written to Berkeley Group, a bigger competitor, urging it to consider an all-share merger. The move could lead to Bovis being unofficially put up for sale and flushing out takeover interest in the FTSE 250 company, which has a market value of £1.1bn. Redrow, another rival, is believed to be monitoring the situation."
Bovis Takeover Moves Occuring according to Major Shareholders & in The Times. About time the significant value here started to be released! Would be a good buy for real competitor housebuilders given Bovis's low valuations compared to the rest of its industry... Regards, Source.
Anybody any idea what effect her Brexit speech is likely to have on BVS ? Time to sell ?
I have to agree with your post, cml,s are based on bribes and not on fully checked units, I work on site and feel sorry for anyone moving into a new home from Bovis. I will also say that whilst most site have awards for safety plastered all over there sites, most are totally unfit places of work, safety is ONLY adhered to if there is to be a H& S visit otherwise it is ignored, how can there be any consistency when agents are rotated or sacked weekly, personally I suggest no one consider buying a bovis house anywhere in the southern central region, most agents like the position of power and concentrate on this over any kind of build quality
That's a great insight in to what's happening everywhere, people are so unhappy in there jobs, I'm nearly at the end of my working life, well having to work that is, and I pity people that are starting work , and the ones that are stuck with there jobs. It's all *******s, human resources, investors in people, who they kidding ,it's all bullshit.
Having worked for Bovis as a Sales Consultant I am not surprised at the press coverage. December was shocking for the sales staff who knew properties would not be ready but were told by regional Managing Directors to tell purchasers they would be moving in. Yes money was paid, people were put into hotels and B&B for Christmas and many people who did move in were in absolute turmoil. My question is this - The CML certificates which confirm that properties were build complete were being issued on clearly unfinished units - to enable solicitors to draw down funds and effect completions - is this not fraudulent. Purchasers who were part exchanging were told to complete on unfinished units and given licence to occupy their current properties until the new plot was ready again CML certificates were clearly issued on unfinished properties. Its about time the banks and solicitors were also held to account. I have no sympathy with Bovis but to honest this is an industry wide problem which occurs at every half and full financial year and needs to be curtailed. I am out of the industry now I cannot take any more stress from both the company and its purchasers.
Just read the report on , bribes to move into unfinished properties, to get sales figures, it happens everywhere, componys hold back payments before end of year so cash pile looks higher, it's all so corrupt. And for what. A few months, long term your either selling them or your not. It's accountants that run british buissiness now, with no idea about the sectors they run. In Germany engineering is run by engineers, and the poor people on the ground are been driven to despair.
I am new to this share pre xmas present to myself, as some of you say most builders have had recent increases in SP think this trend may follow here in the coming months. I read late last night in the Cambridge News that together with Taylor Wimpey they have been authorised to build a further two thousand plus homes in Cambridge [West Cambourne] adding to this ever growing Village/Town of some previous ten plus thousand existing new builds. All sounds good to me.
Compared to sector peers its an appalling performance; the management at Bovis has been nothing short of disgraceful and I am surprised Ritchie even lasted this long. This is not the first time Ritchie's poor management structure and system of internal controls have allowed important completions to slip further down stream and it is absolutely right that he has gone. No other builder would have allowed this to happen which is why Bovis is being punished by the market. Other listed builders have superior management structures that ensure units are delivered on time, and if their is a slippage for whatever reason this will be properly managed and equivalent units from other sites brought forward to manage sales and year end volume and profit expectations. Time and time again Bovis has failed to deliver and until they appoint a decent CEO who will shake up the management structure then I would advise steering clear as until then there is no guarantee of much needed operational improvements. Furthermore Bovis has a terrible reputation within the sector for build quality and customer service ratings, for which it is the worst in sector along with its ROCE, margins and share price performance! Ritchie took hold of Bovis not long after the great recession, which it weathered well due to its strong balance sheet and, at the time, sector leading margins. Look where he has taken it- Bovis is not a laughing stock in the sector with some of the worst product quality, lowest margins and the lowest ROCE in the sector. Good riddance to an absolute disgrace of a CEO! The only positive is that Bovis is now so lowly valued on price to book metrics for instance, that is has amongst the highest potential for improvements and share price performance in the right hands from here. But before its worth buying back I want to know who is in charge and what they are going to do to turn this laughing stock of a builder around! The management has been nothing short of shocking.
Increasing market and sales and at much higher prices is hardly a poor performance and in any other sector would be hailed as a very good outcome. Bovis have consistently matched or bettered its competition in dividends and continues to deliver. Ritchie is not flavour of the month with the boy scribblers, and has never cultivated them but internal indices and ROCE has improved, and the forward pipeline looks healthier than ever. Shore capital and Hardy have not been exactly brilliant at calling the market.
The Guardian today The Grudian today "The housebuilder’s (BOVIS) chief executive David Ritchie quit on Monday, less than a week after the group issued its profit warning. It warned last Wednesday that it would complete about 180 fewer homes than expected in 2016, blaming operational issues. This will affect profits – Bovis now expects to make an annual pre-tax profit of £160m to £170m, compared with analysts’ forecasts of about £183m. Categorically BOVIS DID NOT ISSUE a profit warning!!!! They clearly stated that completions would be made Q1 2017 Financial scaremongering at its worst!! and affecting share prices, but typical of the media sloppiness and lack of experience amongst staff!
Analyst Robin Hardy at Shore Capital said that Ritchie's exit "comes as no great surprise" given three profit warnings "driven by poor execution in a period when other house builders were reporting unerringly positive trading". "We have long been concerned that there was something structurally wrong at Bovis and that for reasons that were not wholly clear from the outside, Bovis was struggling to keep hold of key resources necessary to execute its growth plans. It has long been suspected that there were cultural issues that ran right to the top of the organisation and that the business was less able to function freely and take best advantage of market conditions because of too much control." Hardy said he felt the "deep set" problems at Bovis are unlikely to improve significantly
Faramog Richie gone - your new year's wish come true ! Just hope weather stays benign and those late completions get completed before Trading Update on Friday 13th
Ritchie is off! Fantastic news, I've always liked the business plan of Bovis but Ritchie was always the weak link in the chain and hence I've been out of this for a good while. Great to see him gone- worst CEO in the sector. Lets hope they get someone decent in, BVS needs a big shake up at the top.
.... Richie goes. Be a while before this stock re-rates up though
Darkelf99 I think you will find it was down due to broker updates. From a buy to hold.
Bought today but thought it would bounce back as generally a very good day in the sector, anyone know way it was down again
The Daily Telegraph today. "This may or may not be a good time for democracy, but one thing is certain about the past year of political upsets; it’s heaped further humiliations on the economics profession" How very true yet we still get articles containing such pearls of wisdom such as The Week reproduced by H&L today "Predictions at the moment suggest that the loss of momentum will continue and that power has shifted in favour of buyers, but that in most parts of the UK the house price trend will remain positive next year." What are these people talking about.? They claimed Armageddon immediately in the aftermath of Brexit votes, initially made no reference to the enormous increase in buy to let prior to the increase in stamp duty, causing a massive decline immediately afterwards, attributing that to Brexit and now gradually reflect what is actually happening in the housing market. Truly pathetic! In new build house prices for companies such as Bovis are increasing at a rate that in any other sector would be lauded as incredible Manufacturing processes, automation, cheap imported labour, and global procurement has meant nearly stable or decreasing prices for a whole swathe of products and services, yet house price escalation of nearly 10% in the case of Bovis is countered by "expert" opinion telling all that prices may drop! At one time the Law of Demand and Supply dictated that with a finite resource such as land, planning constraints, and availability of skilled labour, assured us that only a certain number of housing units in normal peace time conditions would be built, with prices ultimately determined by demand and lack of availability i.e supply. So unless the demand is switched off by not "uncertainty caused by Brexit" the catch all excuse bandied about by those predicting dire outcomes, but by a major recession stopping the desire for ownership such as 1988 then the RICS and others are hopelessly demonstrating the Telegarph's accusation of "expert and economic guesswork" Clearly the point "that interest rates have dropped to 0.25% but could go up again" is not only futile but pointless with 290 fixed rate mortgages at their historic lowest in the market. In the next 2 years immigration will peak as EU citizens will will have the right to stay if resident . With other articles advising of a housing crisis,lending from parents, the indigenous demand is off the scale Government initiatives such as new villages and others mayl deliver up to 50,000 extra homes per annum eventually but will not dent the 1 Million backlog. In the interim "expert" opinion now is beginning to accede to a slightly slower rate of INCREASE in house prices. Yet Bovis et al share prices languish at around their value of 3 years ago when they were building far less houses at far less profit. Dividend yields will increase for at least 2 years. BUY!