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Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha, thanks , I needed that been a tough week.
I remember what happened in the 2008 crash and so I know what can happen when the housing cycle turns. The top of the housing cycle has clearly been reached now.
I think that housebuilders profits will collapse over the next five years, and any dividends will be greatly reduced or stopped completely. When the UK housing cycle has reached the bottom in about five years, I would be quite interested in buying housebuilders.
My entry price target for Redrow is the 2008 low of just below £1.
Marquess, looks like I was right last week. Good company.
Looks like the SP is holding up better than I expected!
Excellent results , lots of cash and this year has started well - what could possibly go wrong?
Housebuilder Redrow said revenue in the financial year to July 3 rose 10% to GBP2.14 billion from GBP1.94 billion the year prior. However, pretax profit fell 22% to GBP246 million from GBP314 million after booking exceptional fire safety costs of GBP164 million. Excluding these costs, underlying pretax profit rose 31% to GBP410 million. Redrow's final dividend was lifted to 22.0p, up 19% from 18.5p the year before. This took its total payout for the year to 32.0p, up 31%. The homebuilder said its order book has placed it in an "excellent" starting position for the 2023 financial year, but added: "Given rising inflation and higher interest rates it is not surprising the buoyant housing market has moderated recently and demand has returned to historically average levels." In the first ten weeks of the new financial year, demand has moderated to historic levels.
I think a red day is likely, regardless of outcome, due to yesterdays CPI data.
FY results due today. Show us what ya got Redrow!
Think Fed mentioned raising interest rates.
Has anyone got any idea why FTSE took a sharp drop at 1.00-1.30 All my share went down about 2-2.5%
Flat. Looks suspicious
Just found it, £100 million share buyback scheme
How many shares do Redrow plan to buy back. They’re spending ££ millions at the moment, can only be a good sign.
Good to hear from someone with first hand, current experience Lovelace, thank you.
My brother in law is a foreman / manager on a large building site here in the county town of Somerset. The town is one of the new “Garden Cities” & as such thousands of new houses and flats are being built by most of the major building co’s. My daughter is also looking to move to a bigger property and so is visiting various said sites. I am told by both that demand is exceptionally high, prices are strong and not being reduced. Just a small snap shot I know but good examples of where the market is.
I work for the Berkeley Group. Generally, sites have extended procurement routes to between 6-18 months, with orders fixed at prices of order, so most cost uplift is also factored in or mitigated. All housing stock sells at least 1 year in advance, and there is a massive push for social housing (which is guaranteed revenue/profit for householders even within a recession). Realistically FY results for hours builders for the next few years will be ahead of expectations.
"I’ve back dated the RNS and nothing is jumping out at me. Can anybody tell me what happened back in 2016 on the wk commencing 20th June.
Saw it go from £4 to £1! Excuse me if I’m being stupid, maybe i should go to bed."
........................
Indigo,
23rd June 2016 was the Brexit referendum result ~ which caught one or two people out and even including Nigel Farage who had metaphorically thrown in the towel early that evening....
Not sure about your prices quoted for that period, though...?
Redrow's share price dropped from 407p at the opening whistle on 23rd June 2016 and closed at 267p at close of play on the 24th June....
Which was grim enough if you happened to be holding Redrow at the time ~ as I was, with more than two thirds of my entire investment portfolio in just that one share! ~ but I can't see where you got the closing price of 100p from..?
But it did, at least, pretty quickly bounce back from that, within a few months... :-)
Strictly
I’ve back dated the RNS and nothing is jumping out at me. Can anybody tell me what happened back in 2016 on the wk commencing 20th June.
Saw it go from £4 to £1! Excuse me if I’m being stupid, maybe i should go to bed.
Hi Marquess, I've just looked at the tecs of RDW, according to them it's a screeming buy, see what happens next Wednesday.
I wasn’t expecting the drop to come on this strong, or this early. You can thank HSBC for that. I still think there is more to come, so I’ll be holding off on buying for now.
Sept 2 (Reuters) - Shares in British housebuilders' index tumbled to a near nine-year low on Friday after analysts at HSBC warned that the country is on the cusp of a housing downturn, as a steep climb in mortgage rates casts a cloud over demand.
The UK housing sector, a pandemic winner, is now showing signs of losing some momentum with surveyors reporting fewer new-buyer inquiries in recent months, while the number of mortgage approvals for house purchases has fallen below pre-pandemic levels.
HSBC's Building Materials team predicts a 20% slump in UK housing demand for a year from this autumn, the brokerage wrote in a note. Britain's housebuilders' index .FTNMX402020 fell about 4% to its lowest since 2013.
The brokerage downgraded all UK housebuilders under its coverage to "hold" from "buy", except for high-end homebuilder Berkeley Group BKGH.L, whose rating was cut to "reduce" from "hold". Meanwhile, it kept its "buy" rating on Vistry VTYV.L.
The research action comes at a time when Britain is widely expected to enter a phase of recession at the end of the year in the face of surging inflation and rising interest rates.
Berkeley, Barratt BDEV.L, Persimmon PSN.L and Taylor Wimpey TW.L led declines on the FTSE 100 .FTSE, falling between 2% and 5%.
The sector index has plunged about 44% this year with the initial declines coinciding with the government's move in early 2022 to ramp-up pressure on housebuilders to foot the bill for cladding removal before the market started pricing in the gloomy environment, particularly a rise in operational woes.
Red-hot house prices in the UK have helped homebuilders stave off cost pressures from supply chain disruptions and labour shortages, caused partly by Brexit and the coronavirus crisis, but key players including Barratt and Persimmon in recent months have highlighted the toughening situation.
How far is this going down?
On dividendmax.com is states ex date is 22 Sept 2022. Has anything been mentioned about the final dividend payment?
Hey Gary, you will find some useful info here. I actually took out a subscription to this service, but as I recall they let you look at a certain number of records for free.
https://simplywall.st/markets/gb/consumer-discretionary/consumer-durables/homebuilding
Hi Gary, Sometimes it is good to look beyond dividends. A couple of the ways Housebuilders are valued is by book value and equity growth. Bellway and Redrow are strongest on this measure.
I have just seen you are on the Bellway chat. You'll get a few good commentators on there. :).
Please be gentle - I am looking to invest in a housebuilder or two for the long term & am respectfully looking for recommendations from those with more knowledge than myself. I shall be doing my own research but forums such as these are a mine field of brilliant knowledge, dividends are my priority rather than growth. Berkeley seem too expensive for me & their dividends are a bit low.
I am favouring PSN, Barratt & or Redrow who look more undervalued than most. Thanks in anticipation.
MarquessR
Yes, and of course the extent to which Redrow can buy back their own shares and cancel them below book value ~ and by my reckoning they currently sell at 0.94 PBV, so are just under ~ means they not only marginally improve EPS & ROE, ceteris paribus (and, of course, these improvements are only marginal, so I don't intend to get too carried away here :-) ), they also improve PBV.
Taken to its logical extent, in theory, Redrow could continually liquidate assets and end up with a single share in issue...
Somehow, though, I think the share price is likely to shift some considerable time before they reached that point...!
The painful thing to watch, elsewhere in the market, is when a company continually buys back its own shares to improve EPS at a big multiple of PBV...
Next comes to mind here....
Okay, that might move the earnings up a bit, but it haemorrhages share holder value in the process...
On a milder level, the same effect is had by Persimmon, who pay out an impressive dividend yield, but at a PBV of mostly over 3.0 in recent years, this is painful for long term value and overall shareholder returns...
Which is why, despite their sector leading return on equity ~ which really is quite awesome ~ I don't hold any Persimmon shares.
But, in the meantime, while share prices are this low ~ go for it Redrow...!!
Strictly
Some more details RE the share buy-back , care of SimplyWallStreet.
Redrow plc (LSE:RDW) announces a share repurchase program. Under the program, the company will repurchase up to £100 million worth of its shares. The program is structured in two tranches. In respect of the first tranche of the program, the company has entered into a non-discretionary agreement with Peel Hunt LLP to purchase shares up to a maximum consideration of £50 million. The second tranche of the program will be undertaken by Barclays Bank PLC to purchase shares up to a maximum consideration of £50 million. The primary purpose of the program is to reduce the share capital of the company. The majority of the shares repurchased under the buyback will be cancelled and a portion of the shares will be held in treasury. The first tranche of the program will end no later than February 18, 2023, the second tranche will begin as soon as the first tranche is complete and end no later July 31, 2023.
Good timing it the SP see’s a drop in value over Q3-Q4 due to Macro economic factors, more shares bought back in the first tranche, but might just balance out the 2nd half.