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SB
What did you make of the Galliford Try update. Jam tomorrow but at least parts were encouraging. SP rallied but has since fallen back.
Retail & consumer
Builders and building materials
Giulia Bottaro
11:37 Wed 16 Sep 2020
Vistry Group Plc
Vistry upgraded to ‘buy’ by UBS over solid base for 2021 profit rebound
The price target was bumped up to 790p from 730p as the discount was previously justified by the risk of an equity raise more than offset by a stronger outlook
Vistry Group PLC - Vistry upgraded to ‘buy’ by UBS over solid base for 2021 profit rebound
Vistry PLC (LON:VTY) was upgraded to ‘buy’ from ‘neutral’ by UBS as analysts see a solid base for a profit rebound in 2021 and beyond.
The housebuilder can count on volume and margin growth potential supported by the existing landbank, pockets of resilience provided by mixed tenure business, and realisation of synergies post-merger.
READ: Vistry predicts profits recovery as housing demand rebounds
The price target was bumped up to 790p from 730p as the discount was previously justified by the risk of an equity raise, despite being ruled out by management, while now the German bank thinks it is more than offset by a stronger outlook.
“The productivity restored to pre-COVID-19 levels provides improved visibility into near-term volumes and profitability,” analysts commented.
“Sales rates in July-August are 20% above 2019 levels with firm underlying pricing. Gross margins in the land bank are at 24.2% which provides a good upside for profit and loss margins recovery in mid-term from around 20% expected in the second half of 2020.”
Shares added 1% to 603p on Wednesday late morning.
Quick facts: Vistry Group PLC
Price: 600 GBX
LSE:VTY
Market:
LSE
Market Cap:
£1.33 billion
Kernowlad,
"SB
What did you make of the Galliford Try update. Jam tomorrow but at least parts were encouraging. SP rallied but has since fallen back."
.......................
To be frank, I haven't looked at it.... if you're a Galliford fan, you probably won't want to hear this but I regard them based on track record as an even bigger nightmare than Bovis.... I did get into some chat, as I recall, on the GFRD share chat some time ago so you can probably scroll back on my old posts for chapter and verse if you like...
And now Galliford have offloaded their house building arm to Bovis, I'm guessing that makes them just engineering now so they're off my radar in any event....
Of much more interest to me are Barratt, Redrow, Bellway, Taylor Wimps and Crest...
After all the hoo ha this year, Barratt have made a return on equity of 8.6% and Redrow have made 7.0%.... not really any big difference there to shout about, is there...?
Haven't had Bellway's results yet but I've got them in for 9.3% ROE.... maybe it's a tad high given the others, maybe not, but it's based on an estimated EPS of 220p but that's still less than the scribblers' 242p.
And I've got Taylor Wimps in for a prospective 8.0%, so that seems in the likely general ball park....
And Crest are having an annus horribilis, and they're in for minus 1.6%. but the market has already hammered them for that.... probably too much IMO, hence it's currently my biggest holding.
But, anyway, firmly glued to the naughty step, is Bovis, on minus 22% and, yes, this is mostly writing off the goodwill acquired in buying Galliford's house building business, but it all goes in the pot as far as I'm concerned though obviously everyone is free to calculate value their own way.
Strictly
Relatively small, but an example of the additional resilience ( mentioned earlier ) provided by ongoing partnerships with social housing providers.
VISTRY PARTNERSHIPS STARTS ON WIRRAL SCHEME
16 Sep 2020 North West Property
Vistry Partnerships has started work on a Wirral development.
The development, named Poppyfields, will comprise 78 self-contained apartments.
It will also provide a variety of facilities including a bistro, hair salon, spa bathroom and wellbeing suite.
Included in the development is a head office for Alpha Living, with North West managing director Ian Hilliker saying: "It's important to highlight the need for developments like these and we are happy to be able to provide flats to people who truly need them.
"High quality developments such as this are vital for local people and help build and sustain communities."
Chief executive Graeme Foster added: "The whole project team has been focused on delivering a high quality development, which will provide much needed affordable extra care housing on the Wirral."
"Relatively small, but an example of the additional resilience ( mentioned earlier ) provided by ongoing partnerships with social housing providers."
Raleigh, you're putting these comments out under the heading that I initiated, so I'm wondering if perhaps you are aiming them at me and are seeking a response...?
Taking driving a car as a metaphor for investing, my approach is to spend much of the time looking in the rear view mirror.... I appreciate that wouldn't be ideal if one was actually driving a car so the comparison only stands up so far....
The thing is, I've been in this game for twenty years and that approach has served me well, and now being well into my late sixties and (allegedly) somewhat set in my ways, it seems unlikely I'll change...?
But the thing about the rear view mirror approach is that you essentially only need three numbers...
The book value per share net of intangibles at the start of the year, the total equity net of good will at the end of the year, the number of shares in issue at the end of the year, and the amount of dividend per share actually paid during the year...
Okay, four numbers then...
From those, I can obtain the real, not mythical, earnings per share, and, from that, the real return on equity and the correct price to book value (which I update each month based on estimates and am usually within my target 2% error allowance when the numbers are issued - which is near enough for my purposes)
And that gives me what I want to know, going back decades for most of the big house builders. The amount of debt, or lack of it, is obviously an issue going forwards but, again, how successfully the company used leverage in the past shows in the actual return on equity achieved, and also I observe that companies, like people, can tend to have natures that, give or take, are likely to be fairly consistent.
"It's different this time" reckoned to be the four most dangerous words in investing.
Whereas, many investors put far less store on the past... and, of course, they may have great success with that... but it is very much a different approach - a different hand on the big ouija board that is the market, perhaps...?
And if Bovis really has changed, and if my metaphorical car I'm driving is also a time machine, then, all being well in due course, I'll be able to observe how they've done in the rear view mirror and make a value assessment accordingly...
And in the marketplace, all companies tend to have their moments in both the sun and the rain, and history suggests I can almost certainly bide my time for Bovis and, in the meantime, there are easier questions on the exam paper IMO.
Warren Buffett's perfect pitch, if you like...?
And if I'm wrong, and Bovis soars off into the sky from here and stays there, well, no one house builder has ever been the only game in town so far....
Strictly
No. iPad stuck or something tech. Difficulty in initiating new message.