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Last post: 404x, 18 Jun 2024 14:28
In the interims last week they reported NAV of £803.1m which equates to ~312p per share. Applying a 10% discount from that seems reasonable to me, on account of Crest's operational issues, and to more than cover any unknown provisions. So I agree with your numbers.
I see this bid as win win for both parties - Bellway get to expand in the south and a big landbank at a discount, to offset their north heavy operations.
Crest shareholders get the obvious fast track premium from the bid, or by staying invested if the merger happens, the benefit of synergies/cost savings from scale as part of a larger group.
IMHO a third and final offer will be tabled on or before the 11th July deadline. Chances are this will be before the General Election as a. Labour majority is already baked in and will be reflected in the upside of planning reform. 275-280 is where it will most likely sit.
Last post: OracleofOldham, 18 Jun 2024 14:02
Looks like it, a bold move and unusual to see in an approach like this. Could indicate a plan to to go hostile, or at least dangle the implicit threat of that over Crest board.
Do the RNS's of today indicate that Bellway now has a 10% holding in Crst?
Seems to me someone has been trading these shares with knowledge of the offer.
That's all wrong. All shareholders should have the same information. At the same time. All have the same rights.
-----------
How come no class action or legal on this?
Posada agree 100% I brought in a few days before result so not happy with the drop, now with rise today don’t know if I should sell now and take the 1k loss or hold on hoping it will go up more if and when Bellway comes back with another offer
Started: Posada, 14 Jun 2024 15:23
Last post: Deutscher, 14 Jun 2024 19:10
I didnt check crest recently. Recognized it was up (in my portfolio) 40%. I decided to hold, because of its dividend. Then it went down and I regretted the hold. Not until now, when it was back up, I read of the dividend cut. So I made the decision to sell with at least 35% profit. GL to all
Posada, that’s for your reply. I usually buy share only if they paid a dividend 5%+ just in case the price drops I can look forward to the div. With Crest cutting the div by 80% not must to look forward to, anther reason to sell
I have just check the shares that I have sold at a loss and if had kept them I could have sold them later for a profit
Velladean. What would Warren Buffet do. He'd keep the shares. One of his main themes. Only buy a share you are happy to keep for 10 years. This will in time achieve it's NAV.
Was thinking the other day. Of all the shares I have sold at a loss I would have made at least 50% on them if I had only kept them long enough. Example M and S.
Having said that I wish I have got in at £1.90 just a few weeks ago.
Good luck.
Started: cranmore8, 14 Jun 2024 17:27
Last post: cranmore8, 14 Jun 2024 17:27
I only buy shares that I’ve loved with a high asset value hoping they get taken over or gradually creep back up again. You don’t need inside information but I would like some.
Started: Sucafoods, 14 Jun 2024 10:16
Last post: 404x, 14 Jun 2024 11:00
For completeness before someone else says it let's mention Berkeley too. I'm sure we get the broad point of that sentence from my post - that there are a finite number of plcs with the necessary scale and financials.
404x: "Probably too big for the rest to absorb."
Except TW. I'm not saying TW will be in for CALA, they've already got a decent landbank pipeline, but TW are big enough to absorb CALA.
Cala deal will be an interesting bellwether. With L&G looking to exit the sector completely will likely require cash buyer. Also reported they're looking for price on a par with NAV, all means quite deep pockets required, only so many plcs could justify it. Bdev busy with Rdw, maybe PSN could fund it with a rights issue. Probably too big for the rest to absorb.
Agreed. Labour will be good for the Housebuilders.
I have been monitoring the house building sector for a while and there are only a few remaining big players to be swallowed up. Crest has under performed for the last few years maybe this is a good deal
I'm waiting to see who buys CALA homes but looks like its not Bellway
Spring field properties - 94p Scottish play
Watkin jones 45p
GLE affordable homes £5.30
PEN buys CALA?
But all politicians are saying build more houses so any house builder is a great bet for a labour or ny other victory
Started: Crossley, 13 Jun 2024 17:53
Last post: strictlybricks, 14 Jun 2024 09:34
"The results today were dreadful and disingenuous"
....................
James,
And it's probably also worth bearing in mind that Crest's book value per share hasn't made any progress since 2017...
They seem to have taken over Galliford's mantle of being the Vicky Pollard of the sector....? :-)
Strictly
I don't know about punching their air, seems a bit of an overstatement. Personally only bought this in April as a recovery/takeover play. Market punished accordingly the operational issues, everyone knows about them already. Bellway's offer means this has now become an M&A play where metrics like NAV becomes more important than previous management.
Reeks of opportunism. 350p is a fairer offer. Or 325p cash.
The results today were dreadful and disingenuous (specifically, ignoring hugely increased remediation liabilities to arrive at a delusional net operating profit, rather than a thumping loss). The CRST management team has been very poor and I do not trust the reported accounts - even now. CRST shareholders should be punching the air that anyone is prepared to to take this mess over at a material premium, even accepting that the CRST share price is on its knees - as is the BWY share price, for that matter.
Poor offer of 20 percent less than assets needs to be much nearer 3 pound a share
Started: 404x, 13 Jun 2024 19:00
Last post: 404x, 13 Jun 2024 19:00
Started: Phippsy, 19 Mar 2024 12:38
Last post: WiganWarriors, 13 Jun 2024 13:46
CRST have suffered a series of mis steps over recent years, which reflects upon the mediocre management team in place. This, plus a cyclic down turn has compounded to send CRST to the bottom quartile with respect to sector performance. If they can work through these difficulties, and under new leadership start to rebuild margins with more predictable earning forecasts, then they do run the risk of being picked off by private equity, or one of the larger builders.
I would expect the management team to rush through new bonus arrangements, and set themselves up with share options, to mitigate this risk and ensure that they, at least, will prosper either way. A little more difficult for the ordinary Joe profit from a recovery. Still, time will tell.
IMHO, there are less speculative investments in this sector at the mo.
All housebuilders have underperformed the rest of the market vs 10 years ago. Go back a bit further though, at nadir of financial crisis in 08-09, and anyone investing in the big plcs at that time has done very well indeed.
Similarly, if you chose to pick the comparison starting point as the Truss car crash in Autumn 2022, BDEV is up by 40%+, Bellway by 60%+, Redrow by 75%+ etc.
Crest has its own specific issues, much of which overseen by CEO who announced his retirement in January. We'll see if new one appointed today can turn things around.
But the main point is that this is a cyclical industry. We can all chose to pick arbitrary dates to say anything, but it might be telling that those investors who bought into likes of BDEV or RDW during the periodic cycle lows - before the inevitable recovery kicked in - did very well indeed.
One long slow death for this share, check out its performance over 10 years, it’s why U.K. shares are known as the “ bug zapper trade “😂 U.K. is fxcked since Brexit.
CEO sacked - sp will fall until another company gobbles them up. Sub £2 nailed on imv today.
Very unloved company but could still see a decent reversal here. Feels like we've passed the bottom of the cycle for housebuilders now, and of all of them this has the lowest price to tangible NAV. Probably for good reason, they've executed pretty poorly over last couple of years - but by the time they signal operational issues behind them, it'll be priced very differently. Helps it has to be a promising takeover target with the lowly valuation and hefty landbank.
Started: Florence141414, 13 Jun 2024 12:29
Last post: Florence141414, 13 Jun 2024 12:29
This is my first look at Crest Nicholson. There are obviously uncertainties with the cladding provision. Who knows whether that gets worse from here? Or by how much?
Today’s results were not great as they are working through selling properties at rubbish margins built during the worst of the build cost inflation. However, they stayed very active in land acquisition when prices were at their most favourable in 2023 which has allowed them to be more selective in what is now a more normalised competitive environment.
Is there a potential situation arising in a year or two whereby they are completing construction, absent of the extreme build cost inflation of 2022/2023, on sites acquired at cheap prices?
This would have a turbo charging effect on margins that other developers who adopted a wait and see approach in the 2023 land market may not benefit from in the same way?
Started: cranmore8, 2 May 2024 08:24
Last post: cranmore8, 2 May 2024 08:24
Somebody bought 2 million at 1:90 shown in trades this morning I guess that might be a bi signal
Last post: Apeirogon, 21 Mar 2024 12:33
You can always move to Scotland and enjoy rent control… ‘cos that worked out
It's about time these cowboys faced the reality. They all got away for too long and NHBC is not worth the paper they were written on.
Too greedy and with CONS in their back pocket, they having been cheating for too long.
Started: dedino, 19 Mar 2024 08:08
Last post: MaryBr190, 19 Mar 2024 11:53
Would you buy a home from such a builder? Would b nice to know what the defects were. Unforeseen or shortcuts taken.
Not invested but thinking about it around the 170p level.
Legecy issues and hired third party sounds expensive to me...
Crest Nicholson said it has achieved reservations in line with expectations in the period from November 1 to March 15. Sale prices achieved have been in line with expectations and cancellations remained at normalised levels, it added. However, build activity in the sector continued to operate at a lower level which is now resulting in lower labour costs in some areas. Crest also updated markets on pre-2019 completed sites. It explained that it has become aware of "certain build defects predominantly on four sites that were completed prior to 2019." The company said that these sites will require remediation over the next three years at an estimated cost of up to GBP15 million.
Started: stargate, 4 Dec 2023 04:44
Last post: dedino, 29 Feb 2024 16:30
Signs of life were seen in the UK housing market in the new year with a rise in the number of mortgages being approved.
Activity remains weak overall, with potential buyers still nervous about high interest rates.
But the latest Bank of England data shows approvals for house purchases rose to 55,200 in January from 51,500 in December.
This was the highest level since October 2022.
Borrowing on credit cards also picked up last month.
People took on £1.9bn more in credit on cards, car finance and other loans in January than they repaid.
Why up today ? Bid coming here next?
RM
The SB Blog...
In case you didn't seen my email yesterday, I wrote to you to advise that I'd accidentally signed you up on the blog at the wrong level ~ and I couldn't undo it retrospectively so instead I cancelled that access and have sent you a new blog invite which you’ve hopefully received..?
As said in my email, I appreciated you challenging me there ~ I reckon I don't get enough of that TBH ~ so hopefully will hear from you again there...?
Given the nature of our discussion, I'm imagining you're following the overall movement of share prices for the house building sector pretty closely right now ~ and particularly with regards to Redrow's share price....? :-)
If you’ve got to read much of the blog, you’ll no doubt understand that wherever Redrow’s share price goes of itself from here is very much a secondary consideration for me…
What is of primary importance is where it goes against Bellway’s price…
And, just two days in admittedly, I ain’t complaining thus far…!
I’m also pleased to have moved completely out of Crest ~ especially having now downgraded its book value weighting against that of Bellway’s to minus 40%
Strictly
RM,
I also sold my remaining Crest shares to buy Redrow about a week ago...
As things stand, that's proved to have been the right move....
The reason being that though the market may look through the gloom to onward and upward, there's also that if I'm anywhere near right about the 4.5p reality check EPS for tomorrow, this is quite a stark difference to the figures the scribblers are talking...
Of course, they too do seem to love that little word to conjure with ~ "adjusted".
So, any big difference tomorrow may come as a market upset ~ along with likely the reduction or even cancelling of the dividend...?
So, whether it's a case of great minds think alike, or small ones seldom differ, we seem to be in agreement.
Which surely means that tomorrow's Crest numbers announcement is now a popcorn moment, rather than potentially requiring incontinence underpants...? :-)
Of course, part of the function of the market is to make fools of us all when it can....
Strictly
Hold on tight for tomorrow, it's going to get rough...
FTSE 100 housebuilder Barratt Developments announced that it will be taking over FTSE 250-listed Redro
This is helping here and CRST is up more than 8%, who is next?
Started: sparhawk, 23 Jan 2024 07:46
Last post: OracleofOldham, 23 Jan 2024 10:11
Came here for a deal, but looks like the bugger is holding up so far.
Looks like dividend will be slashed next year
Proposed final dividend of 11.5 pence per share. Total dividend for FY23 to be in line with prior year at 17.0 pence per share. The Board expects to return to its policy of 2.5 times cover going forward
Started: ge0rge123, 22 Jan 2024 12:15
Last post: ge0rge123, 22 Jan 2024 12:15
Used to hold Crest and looking to place a cheeky LBO for tomorrow opening.
Great informative threads from Strictly, Registerme and Crossley
Respect
Started: Registerme, 17 Nov 2023 10:01
Last post: strictlybricks, 17 Nov 2023 11:32
"Oh, I’ve finally got round to posting on Strictly’s blog! About the net cash situation here. Wether he allows it to be posted and if he responds we shall have to see. Just in case you wanted to get involved, if indeed, it becomes chatted about? "
....................
Crossley,
Don't worry ~ I ain't the thought police and I have just responded on the blog to your comment there....! :-)
Strictly
Morning RM
It’s hard work over on PSN isn’t it at times?
For me, out of the six HB’s I have on my watchlist,
(I’m sure you can guess these? ) I reckon this may perform the worse until the January update. We shall see?
Oh, I’ve finally got round to posting on Strictly’s blog! About the net cash situation here. Wether he allows it to be posted and if he responds we shall have to see. Just in case you wanted to get involved, if indeed, it becomes chatted about?
Anyways, I have to tidy the house before my daughters grandmother comes round to mind our second child as I’m off to the big smoke tomorrow. My nine year old is attending her first live gig. Ed Sheeran at the RAH.
And to think I could have sold the three tickets on a resale site for 7k. Hope she enjoys it!
Have a great weekend RM
Best regards
Can’t see going that low…
Started: Crossley, 15 Nov 2023 09:21
Last post: Crossley, 16 Nov 2023 18:22
As I’ve said Crest isn’t really my thing but I’ve looked a bit further into this as I’ve not had a busy day.
With this statement only being twelve weeks ago I’d certainly like to see some financials in Jan before investing?
The firm’s group finance director Duncan Cooper told analysts yesterday (21/8) that Crest would likely end the year with less than £100m in net cash after the firm reported that sales had dried up in recent weeks in the face of soaring interest rates.
When I read the net cash this morning I expected a much
larger fall tbh
Afternoon crossley,
I had a stop loss set at 185 for my remaining holding, so I’m out completely now. Don’t get my wrong, I still like the company, but it’s drifting back to 170, I don’t think it will revisit the 150’s, but who knows in this market? Anyway, there’s no point being in a falling knife.
I think you’re right, there’s not going to be enough cash in the pot to pay a divi. Springfield recently got in a similar situation and had to scrap the divi, and the share price went well below 0.5x book (I think about 0.35x?).
Afternoon RM
I’m glad for you you did.
What’s your thoughts on….
With the net cash dropping from £277m to 65m and pre tax of say 45m (17.5p per share) they will surely have to drop or maybe even suspend the div come January? It looks like they’ll burn through net cash soon at this rate?
The trading update could’ve been worse, but could’ve been better.
I sold half my holding yesterday afternoon, and am just keeping the powder dry for now.
I see long term gain here, but I think it’s inevitable this will drift back down to 170 in the short term. Nothings really changed since it was 170 only 2 days ago. The fall in inflation was expected anyway.
Bottled it around 3pm at 192.9!
Good luck with whatever you do
Started: volcano, 16 Nov 2023 07:51
Last post: volcano, 16 Nov 2023 07:51
Same as other housebuilders, activities are slowing down,we will see how the market reacts.
Started: moneyline, 24 Oct 2023 11:16
Last post: moneyline, 25 Oct 2023 21:55
Registerme,
Shared ownership is available on the secondhand market, there are usually restrictions for people living and working within the area for a certain amount of time and also the max earnings people can have. I agree it’s an interesting scheme however still having to pay rent along with a mortgage is a broken way of buying a property in my opinion. I’ve sold shared ownership homes and they are a nightmare to shift, no one wants them, granted in the area of London it may be somewhat different. The schemes however are completely different and will make little impact.
I’m down a little on my position but will be averaging my investment every couple of weeks, I still think house builders could slip further but hopefully the autumn budget can bring positive news. Once inflation comes under control and interest rates come down, house builders will very much be back in favour. I agree on the land crest has is lucrative, but other house builders have been doing the same. BKG would not want to over leverage their land position in the short term.
Money line,
What makes you think there wouldn’t be a market to take crest over? BKG only operates in the south, where all of crests land bank is held. They have £1070 cash sitting on their balance sheet. Crest has £847m net tangible assets. BKG could offer a 50% premium on crest share price (£600m total) and still get all of crests land bank at a circa 30% discount.
Money line,
What struck me about this shared ownership scheme was that other housebuilders don’t seem to be offering it, and it’s not available on pre owned homes, which give crest a competitive advantage in a market where buyers are few and far between.
From the HB’s perspective it’s just as good as help to buy because it’s more affordable per month for a FTB, and the deposit is still 5% (10% of the 50% share).
The total monthly payments will be lower on this new scheme because they buyer is making payments on a 45% mortgage + 0.23% per month (2.75% p/a) on the rented 50% share. This will be cheaper per month than both traditional renting, and paying a regular mortgage, with or without HTB.
Registerme,
Its an interesting scheme, the shared ownership model does only make up a very small percentage and the shared ownership schemes never seem to sell as well in London, cant say much about outside of London however.
The help to buy was a different beast that counted for so much in london for one and two bed flats at £600,000 and below.
Its a simply Supply/Demand example though, over the course of the next 10 years we will require more homes and we never keep pace with new homes being built in line with the demand that is still strong. House builders will invariably have to weather the storm of the market for the short term. I think its an interesting take to consider a potential takeover, yet there isnt the market currently to make this worthwhile, land is being banked in readiness for lowering inflation and interest rates, which hopefully will be on the horizon next year. Still think housebuilders are well priced at the moment, yet there may be further to fall for many.
Money line,
Re help to buy, Crest has just partnered with legal and general to launch its own scheme which is very similar help to buy.
https://www.warwickshireworld.com/lifestyle/homes-and-gardens/local-warwick-homebuyers-benefit-as-crest-nicholson-launches-new-shared-ownership-scheme-4383385
Started: Registerme, 23 Oct 2023 14:00
Last post: Registerme, 23 Oct 2023 14:00
As I write, this is trading at just under 50% of net tangible asset valuation! £876.6m, of which £29m is intangible… priced at £404m market cap…. Crazy!!
Let’s assume worst case scenario:
Always write the intangible's off- leaves us with £847.6m net assets.
Inventories were sitting at £1108.1m on the latest 2023 balance sheet. Assuming worst case scenario, let’s say a write down of 20% due to market conditions- (£221.62m).
LEAVES US WITH £626m OF NET ASSETS (WORST CASE). That’s a 55% premium on current share price!!
The closest competitor to Crest is Berkeley group as it also operates predominantly in the south of England, which is where the vast majority of Crests land bank is held. Berkeley’s latest accounts show it has £1070m of cash sitting on its balance sheet so it would be a great opportunity for it to put a takeover bid in for Crest to get the assets on the cheap?
I’m not saying I’ve heard any rumours of this, just that it would be a great opportunity!
Started: Registerme, 28 Sep 2023 19:48
Last post: Registerme, 28 Sep 2023 19:48
How can this be down 8% on no news?
It’s now trading at 50% of tangible book value. Absolutely crazy valuation. Must be a take over target for one of the bigger housebuilders?
Started: Aeoninvestor, 28 Sep 2023 18:50
Last post: Aeoninvestor, 28 Sep 2023 18:50
The dividend of 5.5p will be paid on 13th October go those on the register on ex dividend day 21st September
Started: Registerme, 20 Sep 2023 13:52
Last post: dedino, 20 Sep 2023 16:04
Thursday 21 September
Crest Nicholson Holdings PLC ex-dividend payment date
Started: bitofluck, 31 Aug 2023 19:56
Last post: bitofluck, 31 Aug 2023 19:56
Interested to notice two very big trades of £2M each around 4.20 pm at price of £1.837 (Probably Buys).
Also other big trades of £236K and £437K. I've only just started to look at CRST and assume that these are
actually unusually large and not a regular occurance ? Any comments from you people who have more
knowledge of CRST and have researched them over a long period.