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'PSN look like they are offering to pay a mortgage for 10 months which is a great idea'
I've noticed Avant homes also offering to pay the first 12-months mortgage payments, whilst also going with the marketing angle that a new-build is more energy efficient and saves money in the long-run. I think we'll see more HBs follow suit with the mortgage offers
BB Yes great trading update the forward orders for 2023 are £ 2.3B alone its steady as she goes simply outstanding house builder
Reads outstanding to me £4.6bn forward orders.
£300m aquistion costs for Countrywide paid off !!
The protection affordable by partnerships in a downturn is excellent.
My top pick house builder
BB - Sorry for the fat finger mistake should have been BB/AS (AnkerSharkz)
Anyway seems to be off to the races today already ALB and GLL
SS/AS Agree conclusions Steady-As-She-Goes would seem to be the order of the day ;-)
Svend - VTY are afforded more protection that others through social housing and partnerships to a greater extent than other builders.
I think building on Chester's post thats what the experts are seeing.
Hope i'm right.
PSN look like they are offering to pay a mortgage for 10 months which is a great idea. They utilise there own cash to do it. Put a limit on there contribution say 100k and caped at 5% = 4k. Super idea that basically repositions inducements to buy that would have been offered anyway.
I fear the cat may be already out of the bag as Barratt warns of a marked slowdown in the housing market and they have cut approved sites from 22 to 16 in 2023 as a result of the weakened demand due to higher borrowings but I hope I am wrong and VTY has a great trading update next week. GLA
Peel Hunt, reported via Interactive Investor, place VTY amongst their top 30 'growth' shares for 2023. Their definition of growth must be different to mine, but I hope that they're are right! They (PH) didn't do very well with their selections in 2022.
Looking forward to trading update - hoping for positves, obviously.
GLA
CG
Apologies all as trading update is now 18 Jan 23. H&L are still showing due today but having checked VTY website they confirm it is due on 18 Jan 23. What is another week's wait!!!!!!!! Let us hope it is worth it. Continued good luck to one and all. Rgds S
As we head into a new trading week I hope to see a nice increase ahead of the latest trading update which is due on Wed 11 Jan 23. It will be interesting to see what is reported. Fingers crossed for positive news. Continued good luck to one and all. Rgds S
Here is hoping that 2023 see's a steady but decent rise in share price. Not going to set targets but I would like to see a decent rise for VTY. Continued good luck to all on this board be you investors, potential investors or those just watching. Good luck and success to one and all. Per ardua ad astra!!!! Rgds Saintly
Merged with Vistry Group PLC exchange of shares ( D ) today
Changed its name from Countryside Properties to Countryside Partnership 31st January 2022.
At Vistry price today 633p a loss of 50% for me .
Yield here 6.7%
Londoner,
Okay ~ if you have a change of mind about the blog, just let me know.... probably best to do that on either the Persimmon or the Bellway share chats....
Hmmm, Galliford eh,...?
If you did join the blog, and read back, you'd no doubt find that I've been somewhat less than complimentary about that company & Bovis in the past....
But, as I mused before, has Greg Fitzgerald now turned water into wine there...?
I'm guessing I'd want at least a year or three of watching & waiting to see and, in the meantime, I'm definitely not holding my breath ~ but some say that miracles DO happen...!
With regards to metrics, our home grown one is our currency for house builder shares which is weighted book value…
It’s only really applicable where you’ve got house builders with similar dividend policies, so Persimmon doesn’t fit into that based on their past but if they now come more into line then not only does it bring them closer to being able to be easily included, it also makes them inherently better value from an investor’s perspective.
And, finally, while I’m on metrics, the other thing I do is to follow the progress of a single share for each company, i.e. how does the book value per share move over the years, once adjusted for dividends reinvested at the share price on the day paid…?
That really is the cold marble slab of truth of comparison over the long term…!
Gets tricky when there is a rights issue involved ~ and that’s another reason, apart from the Vicky Pollard aspect of their nature in the past, why I’m no fan of Galliford.
Though it is fair to say that they did have their time in the sun in the years coming out of the credit crunch when, as memory recalls, they kicked off with a shed-load of plots recently purchased at bargain basement prices….
But then, from 2013, it all went south ~ and Galliford morphed into Vicky…
Good luck with the timing, though ~ that's above my pay grade...
Well, I’m relieved you said Bond Street, rather than bandit country ~ I mean, south of the River….
Strictly
Hi Strictly, thanks for your comments and the invitation to join your blog. I understand your point about 'reinventing the wheel' - I'm familiar with that feeling on these boards, but I thought I'd try my luck.
I'd like to take a rain cheque on your blog invitation - I might follow up later. I've a small holding in the house building sector - Vistry, as a legacy of my holding in GFRD - but given the current economic climate I'm looking to increase my weighting in the sector over the coming months. Hence my current interest. Given previous cycles, getting into the sector anywhere near the bottom should prove a good investment, and I suspect getting the timing right, rather than the specific company will be key - at least in the early stage of any recovery.
In the meantime, you've given me good insight into your ROE metric. I plan to develop my own ROE database using Bellway as a benchmark against Vistry alongside a valuation metric, probably around Mkt Cap and Enterprise value (to capture debt effects). My interest in Vistry is based around their focus on partnerships. I want to explore that aspect further.
Best, londoner7
(Born and raised in the home counties and currently living in Scotland. But I had a wild and memorable year living in the West End - 200m from Bond Street Tube Station - which is my link to London)
Londoner,
I've had a quick butcher's at your past posts here, and it seems to me that you like to take a serious look at companies in depth ~ and, in this, you seem interested in what other people have to bring to the discussion as well as being up for contributing in detail yourself...
Also, you are polite, friendly & respectful ~ something that can't be said for everyone who comments on the various house builder share chats here…!
You may have come across my making reference to a private blog ~ the name of which I use as my moniker here so, as you might imagine, it only concerns itself with the house builder sector.
This was originally set up, in 2016, to help my circle of family & friends who have joined me in this investing-in-house-builder-shares malarkey over the past couple of decades as they’ve followed the progress of myself along with those already in it…
In recent years, a few “outsiders” have joined, a number of whom I came across in LSE chat over time…
And I have kept that to just a few, as I don’t want to dilute the original basis of the blog too much, but it’s fair to say that the people who have joined have, mostly, brought something to the discussion ~ and I definitely have to be “on my game” these days with what I have to say there… though, now working with a 70 year old bit of kit (my aging brain) I am prone to more than the occasional senior moment ~ which keeps the more sharp-eyed amongst our crew on their toes…
This lengthy preamble is because my sense is that you want to dig into this ever deeper and I don’t want to be trying to reinvent the wheel here in these LSE share chats ~ which often seem to have something of a pre-occupation with short term price movements and which ain’t what it’s all about IMO…
But nor is the Hokey Cokey…!
So, anyway, if you are interested to do so and are happy to put up an email address here (even if only a temporary one to use just to make initial contact), I’d be happy to send you an invite to the blog and we could carry all this on there, probably with others chipping in there ~ though, if you give it some reading time, you’ll no doubt find that we’ve explored the ins & outs of a duck’s a.se on much of it over the years…
You’d probably be familiar with several of the others who have been contributors both here and in the Telegraph investing comments.
Incidentally, given your name, I live on Dartmoor these days (that’s “on” it, not “in” it, mind ~ which would be something altogether different) ~ but I hail from Ealing originally…
Strictly
Hi Strictly, thanks for the detail of your ROE calculation. I'd have struggled without the reference to the cladding reserve.
I thought the easiest place for me to start would be with the 1/1/21 BVPS baseline. I worked it by multiplying it by weighted average shares in 2020(220.9m), which results in £1,456m and went looking for that number in the balance sheet.
The closest I could get was Net equity minus goodwill minus intangibles = 2,195-547-144 = £1,504m. Although this is only 3.3% higher than your number, I know it matters when we're essentially considering the difference between two large numbers.
I was good on the BVPS 2021 number, and I see you've used £50m from the guided range of £35-£50m for cladding, (I note this was revised to £71m at the recent interims, but I've stayed with £50m here).
Your 60p dividend number is declared dividends for 2021. I've used 40p for dividends actually paid out in 2021.
My numbers lead to (771.61-22.49+40-680.85)/680.85 = 108.27/680.85 = 15.9% ROE
The main difference with your 22.7% is my starting number for 1/1/21.
Your reference to Bellway 2020 and Covid threw me until I realised Bellway has a different accounting year.
Given the recent release of Bellways FY to July 2022 and Vistry's interims to Jun 2022, I ran ROE for both. In this instance the cladding reserve has been incorporated, as I said earlier, Vistry increased theirs to £71m.
I guess you've worked the Bellway number. I have 7.2% ROE to July 2022. (We can compare detail if yours is very different).
For Vistry June 2021 to June 2022 (interim to interim) I have 14.3%.
The difference between Bellway and Vistry seem to me to be largely due to Bellway's higher new cladding provisions. If I back these out the ROEs are similar, so Bellway is holding its ROE average while Vistry is currently punching above the old Bovis ROE average.
Looking at Countryside numbers I suspect the acquisition will have an adverse impact on Vistry's ROE, and any synergy from the deal would have to be significant to make up the difference. On this basis I doubt Vistry will be joining your 'splendid' list anytime soon. But even quality companies can be over priced.
The next question is having established your quality list of Bellway, Redrow and Persimmon, how do you assess market valuations, and what is the criterion for switching between these companies shares?
Extending your ROE metric, I assume you compare the change in equity to the market capitalisation or enterprise value, to determine a valuation. I recall from our earlier conversations you maintain a database over several years. I'd be interested to know what valuations for, say Bellway, flagged highs and lows and the degree to which the valuations of your list of quality companies varies to a point you would switch - staying invested in the market. (As you said, Covid being the exception)
Londoner,
I have tangible BVPS 31/12/21 of 771.61p, less further cladding reserve 22.49p per share = BVPS 749.12p, plus 60p div paid = 809.12p, less BVPS b/f on 1/1/21 of 659.38p
= EPS 149.74p = ROE on BVPS 659.38p = 22.7%.
My apologies in advance if there are any schoolboy errors or senior moments unintentionally incorporated within that..!
The low ROE for Bellway for 2020, which was 6.5%, was down to covid.
By comparison, the figure I have for Redrow for that period is 7.0%, Barratt is 8.6%, and Crest is a loss of (2.8%).
Re buying Countryside, I’m afraid I don’t really have anything to offer on this other than to say that I am both a simple soul and an investing wuss…
And I am already struggling with the notion that Bovis seemed to have turned water into wine when they bought Galliford ~ seeing that, as far as I and my investing fraternity are concerned, those two were the woofers of the sector.
So my intention is to stand well clear in case of any delayed booby traps there and also, maybe, now with Countryside…
I think this is a good example of one of Warren Buffett’s sayings about waiting for the perfect baseball pitch and ignoring everyone shouting “swing, you bum”
After all, with splendid companies like Bellway, Redrow and now, more recently, Persimmon, in the frame, why chance it…?
After twenty two years in this game, and being very happy with my annualised return over that time, I’m really not tempted by situations with any sort of question mark over them.
If you’ve read much of my other stuff here and can remember elements of that, you’re probably aware that the only time I’ve called a downturn during the twenty two years was for covid in February 2020 and that, beyond that, I remain firmly in my bunker, helmet on, remaining invested come rain or shine and as prepared as I reasonably can be to brass things out when it’s peeing down.
Strictly
Hi Strictly, a few years back we exchanged posts on GFRD before Bovis acquired their building business and renamed themselves Visty.
I recall your focus on the house builders and your preferred measure of ROE on tangible assets. At the time your metrics put you in Bellway, although I have Redrow also in mind. M&A can cause hic-ups in metrics and perhaps that's behind the wobble you noted in 2021 between Bellway and Vistry.
But I've three questions following your recent post:
I don't see the ROE of 22.7% for Vistry. Could you simply list the numerator and denominator of your sum. That should be sufficient to get me on track.
Was there any specific reason for Bellways drop to 6,7% ROE in 2021?
And thirdly, what do you see as the impact of Vitry's greater focus on the 'partnerships' model, both before and after the recent acquisition of Countryside, on your comparative assessments of the housebuilders? I guess this question is around the 'partnerships' impact on your ROE metric.
My initial attraction to the 'partnerships' model was that it should offer some protection during the cyclic downturns' housebuilding follows - something that might be tested soon. But the public buildings response to Covid restrictions and their slower recovery than the private sector isn't a good sign, which leaves me wondering if the model would offer much protection in the current downturn.
Your thoughts would be appreciated.
Best,
londoner7
Within our investing group, our not-so-affectionate name for Vistry/Bovis has been Battersea...
The reason for this is, since 1998, Bovis (because, when it comes to names, you can run but you just can't hide, I reckon….?) has made an average return on equity of just 11.6% against that of Bellway ~ our benchmark share ~ having been 16.4%.
This has translated into Bellway having grown its book value per share over the period more than threefold that of Bovis, along with having paid out nearly twice as much in dividend
The only shiny spot in Bovis’s comparative history is for 2021, when they declared profit such that this gave rise to an ROE of 22.7% against Bellway’s 6.7%.
Never mind that the previous year, Bovis achieved a negative return on equity of 16.6%.
So, the most recent set of figures for Bovis suggests their performance, after nearly a quarter of a century, has finally leapt ahead of Bellway…?
This was after having absorbed Galliford’s building division.
And our not-so-affectionate name for Galliford was Vicky Pollard given that there was always a “Yeah, but” story alongside the bad performances.
So, Bovis may have finally come good…?
Really….?
On the basis of just a single year’s performance it seems like a Harry Callahan job to me…?
I mean, as in the question to be asked: “Do I feel lucky…? Well, do ya, punk?”
Me ~ I DON’T feel lucky when it comes to Bovis, so I think I’m going to just wait a couple of years or so before re-evaluating them as a potential serious prospect for investing….
Having said all this, Persimmon came good after surviving the reign of King Jeff, despite my doubt & concern there, just that they remained too expensive for the likes of me until now.
So I DO live in hope ~ but well tinged with doubt & cynicism.
But the fact that Vistry seem to have now swerved this latest trading update hasn’t helped.
Strictly
The update disappeared from their financial calendar quite a few weeks ago. Presumably due to the takeover about to complete.
Hmmm, today's trading update appears to have disappeared from the financial calendar page on their website. Next event is a trading update on 11th January. It makes me nervous... just how much is this takeover costing in fees etc? Seeing dozens of RNS posting every week makes it look complex and expensive!
AngerSharkZ & johndean,
No, and as johndean had also referenced today as being the day, I feel reassured that it wasn't just a senior moment on my part that I had then down for the update today...
Especially as this was the time for one last year and also the same time is scheduled for next year...
So, does the plot thicken, or are they just a bit delayed...?
I'm imagining that, if the pundits & press pick up on this & make an issue of it, Mr Market might award Vistry a black mark..?
Strictly
trading announcement tomorrow, thursday
PS
Potential senior moment there, on my part ~ I've just re-checked my notes and it was down as due tomorrow.
Still, it's no longer mentioned in Vistry's diary as far as I can see..?
Strictly
What happened to the trading update that was due from Vistry at 7am this morning...?
It was scheduled for today ~ certainly until recently, when I last looked ~ last year's was issued 9th November and next year's is now in the diary for 9/11/23....
Does anyone know about this..?
Strictly