Member Info for Blades2323

The perceived value in terms of price to book isn’t all that great here.

If you take market cap plus total liabilities as a percentage of total assets the it’s only trading at about a 30% discount, which isn’t great considering the fire provisions could be higher, and land is being sold to meet these provisions, which incurs further costs.

The P/E ratio is over 100x, and yes this is including exceptional items, but exceptional items crop up every year at crest.

Without inside knowledge, the stock market is as risky as the casino IMO. Stocks are just as likely to go down as they are to go up. This share has been on a downward trend for 9 years.

In the most recent results, crest mentioned a severe but plausible case where it could breach interest coverage covenants in April. Anyone know what the details?

Crest Nicholson is trading at a 50% discount to its portfolio value and is ‘well-geared to any recovery’ in the property market, says Peel Hunt.

Analyst Sam Cullen retained his ‘add’ recommendation and target price of 160p on the Citywire Elite Companies + rated housebuilder, which was trading down 0.3%, or 0.4p, at 127p at the time of writing, and have fallen 23% this year.

Cullen made further cuts to his forecasts, after cutting after November’s trading update. He is expecting a slower rate of margin recovery in full-year 2026, with gross margins broadly flat on last year.

This results in a further £7m cut to his full-year 2026 profit before tax prediction, bringing the cumulative profit reduction to 26% since mid-November.

‘Shares trade on a more than 50% discount to tangible net asset value, and on 12.5 times our depressed current year 2026 earnings, which are 5% below consensus,’ he said.

‘In our view, the shares remain well-geared to any recovery in housing activity in southern England and a more positive net pricing backdrop.’

BWY pulled out at £720m. They were paying too much when the net assets are only worth £700m. It’s now trading at £340m.

Sherlock, if persimmon is very active with acquisitions, they should be looking at crest Nicholson. £700 of tangible net assets on the balance sheet, currently trading at £341m.

Kpa, this isn’t a food review board.

Currently trading at £1 of net tangible assets for 47p. Crazy. Not surprised Bellway walked away at £720m, considering the net assets are worth around £700m, but an offer of £450m would see the share price increase about 35% and the buyer would still be getting a 35% discount on the assets.

Kpa, this isn’t a good review board.

Just started building my position here, having watched it fall for the past week and to rising again since Friday.

The market has already more than priced in the worst here, so if the budget is anything better than shambolic, this will rise imo.

Getting a little uneasy about holding this stock now. It has a habit of getting up to mid 170’s and then falling back 10-15%. Uncertainty will start in the run up to the budget too.

Just checked the short tracker.. the most shorted stock has been Ashstead having had a short interest above 4% (now 8%) since May. Interestingly, the SP is up 24% over that period, so don’t go thinking a high short interest will see the SP fall.

In the case of Greggs, it already has fallen, around 50% and those shorts will need to buy back in which will push the SP back up.

Were people saying 24x earnings was too high when it was priced at £32? No, so why say 12x is high. This is market sentiment plain and simple. And if you shorted in 2022 when everyone was panicking about Liz truss etc you’d have lost your trousers come the new year. Invest in solid companies when they’re trading low and ignore short term noise. If you’d gone along with all the hype when the SP was £32, you’d be sitting on a 50% loss now.

There’s no point trying to compete with a supermarket meal deal as you’d just wipe the margin out. Greggs is about convenience, on high street locations. People don’t want to be going to a big supermarket on their lunch break. Compare with actual competitors like subway, Pret, Costa and Greggs is the best value.

Senator, it was an easy short at £32, but not at £16. You say the rally didn’t last long, but nothing rebounds in a straight line.

Your thinking seems to be half-baked.

They may well have been offering a 60% premium on the current SP until they did their due diligence, and now it seems they aren’t interested at any price. What did they find? Looks like value trap to me.

“The reason this company's profits have struggled recently is mainly because it's spending all its cash on cladding remediation, so less likely because it's been overpaying for land”

This will be recognised as exceptional items. The underlying profit forecast of £22-29m is concerning. How can they only be getting 2-3% return on assets?

Bob,

I’m not sure the high profile stuff has been dealt with as yet, as I understand many leaseholders are unable to sell due to the points you raise. Until the market sees some clarity from crest on what the final bill will be, its share price will continue to fall.

Bob, it’s only priced circa £400m below stated asset value. To put that into perspective, they have accepted responsibility for 296 buildings on the gov contract for cladding. The LGA estimates around £2m per block (generally speaking). That’s a potential bill of around £600m.

I’ve been watching this for a while and considering buying in now it’s at all time lows, but I see a lot of red flags here. Why has the profit/ROE always been so abysmal compared to other housebuilders, and more recently a loss in the latest results? The property market has picked up since last year, yet the latest results are a lot worse. The dividend can’t be safe? Are they overpaying for the land? In which case the PBV wouldn’t be as attractive as it seems. Then there’s the question of what the total cladding bill will be? And why do they keep getting sued for other issues? I see they’re being sued £13m for a fire? Then there’s the question of why Bellway pulled out?

I see they’ve got a new chief at the wheel. I’d like to see a turnaround plan from him, revaluation of the land, and a full assessment of what the cladding cost will be, before I can decide if it’s worth a punt. Watching from the sidelines for now.