Member Info for casapinos

Reflecting on this morning's SP action I am amazed. I had funds set aside to benefit from what I thought might be a sharp budget-driven fall across the market and particularly those companies with a large headcount when the well -trailed news of a rise in NI contribution was confirmed. To that end, I had looked up this data www.statista.com/statistics/1218430/largest-uk-based-companies-employees/#:~:text=Largest%20companies%20based%20in%20the%20UK%20by%20number%20of%20global%20employees%202024&text=Com

in order to identify potential targets

BUT, it didn't happen, most of those co's are sailing serenely on and, as to Greggs , they don't appear on the list and only the DB note seems to have triggered today's wildly overdone fall.

One other comment - market reactions to news now seem as a general rule to be exaggerated , IMV by the prevalence of HFT and bot-driven algorithms, when you put the same data into similarly designed systems they ALL REACT IN THE SAME WAY, meaning a lurch in SP , to be followed at some later point by a correction . In recent months and years I have based some of my more high risk investment s on the premise that such lurches do correct, at least in part, and there are profits to be made. NOTE this is NOT advice, merely a contribution to the sorts of thinking sensible investors should consider

As I posted a while ago I have been a GRG holder in the past and sold at tad under 2800, having taken a reasonable profit but in the belief that the SP, after a strong runup from the 2300's was probably due a pause. GRG is a good company, well run and expanding , BUT it runs on very tight margins and they can be easily eroded. I suspect the logic behind the DB downgrade is the recently announced changes to both employer's NI rates and thresholds and GRG as a large-scale employer is particularly affected.

Not withstanding that, I think DB have created an overreaction and while I was contemplating a buy at any price below 2700, they have given me the opportunity to buy at a few pence above 2600.

I am not expecting fireworks but do expect a rebound and upward movement of maybe 10-1%5 from here over the next year or so. What I am confident of, is that the company is well run in a business which isn't going away and so , for me, the downside risk is minimal.

The good news seems to be that the problem (which is still not described in any detail) is confined to the southern group of the company, that the overall costs though now higher at £165m, are similarly contained and despite that, the group expects to produce an adjusted PTP of £300 million. Unusually for me (I would like to think I am a cautious rational investor) I took a position here in the hope/expectation that the SP would recover to former levels in time. I still belive that to be true , but wouldn't be surprised to see further falls today(in which case I may add) or in the near future.

I have had considerable recent succes by playing the markets capaccity to significantly overreact to bad news and this is my latest foray, let's see how it plays out!

Https://www.theguardian.com/business/nils-pratley-on-finance/2024/nov/07/finally-bt-has-a-plan-rein-in-foreign-adventures-and-concentrate-on-uk

Nils Pratley, who despite working for the Guardian, does occasionally write some sensible stuff , supporting what he sees as BT's efforts to simplify/exit their many and varied foreign undertakings. Slimming the organisation down and concentrating on the Uk , he agrees with the sensible view here that the approaching end of fibre build-out will/could mean a leaner more profitable BT.

RIck, the purpose of these boards is to discuss opinions on the value of shares. I do that, and while I have no idea whether that helps form, change or reinforce someone else's opinion or not, I feel it's appropriate to let them know, if/when I change my mind and why. I don't see a problem with that, if you do I'd be grateful for you to explain why you might.

...the insult tennis match. BUT, I'd like to discuss today's news as it relates to the merits , or otherwise of BT shares as an investment. Following on from the RNS I'd like to remind the board that BT's headcount reduction plan is proceeding well, with around 2000 fewer staff saving around £433m in annual salary costs, unfortunately as an organisation with still well over 100,000 employees recent changes to both the rate of employers NI and the threshold, all of that saving will be swallowed up.

Nevertheless, BT is still saying that a further 10000 staff can be shed and assuming a pro rata saving (and no more significant additions to the burden of employing staff by our financially illiterate chancellor) the staff cost should fall by about another £2billion p a . As I have often stated and believe still to be true , cost savings have the significant benefit of " dropping through" to the bottom line. I expected a negative market reaction when I posted this morning but was quite surprised by how much. I have taken the opportunity to add a few more bringing my average up to almost 110p (NOTE via my broker there was a dearth of stock to buy , something which has happened a few times lately).

As ever I expect the SP to recover slightly over the next few days and to return to a slow steady climb , maybe lasting (with the usual undulations!) for many months .

RP... the risk of buying now is obviously greater than it was a few pounds / weeks ago. If a takeover bid does emerge then clearly there is still a profit to be had. At these levels I still think BRBY is a tempting target for several premium luxury goods companies, but obviously as the SP rises, any investor takes on greater risk. While I am happy to hold for a while and for levels well above this , I am under no illusion that a statement from Moncler saying " No intention to bid" would take 10/20/30 % off the current SP( and I would be back to break even or loss.)In that event, I will hold for a natural recovery over a year or two.

IMV the SP is still sufficiently low that a bid from some source is likely , consolidation in the luxury goods/apparel spare is quite common.

While it doesn't answer your question I am holding for another 10/20 % of " natural" recovery and will exit if I can get a price anywhere near £10( rider - I may bale out at any point before that, if I get sufficiently nervous!!! and will let the board know.

Snap summary

positives

Looking like FTTP build-out will begin to run down in 2027, when 25 mill premises will be passed.

Take up 35%

Employee costs down 4%, that's about £200 mill pa

Peak capex was passed in FY 24

interim divi up 3.75% to2.4p

negatives

revenue down 3%

Pre-tax down 10%

net debt up from £19.5 bill to £20.3bill

FY guidance is down 1-2%

While I am relatively content, I suspect that the market will be less so, today's price action depends on their response and whether negativity here will exceed the positive overflow from yesterday's US market action.

For those with the time and inclination to read the full document it is here

https://www.londonstockexchange.com/news-article/BT.A/half-year-report/16752575

The usual trenchant report from TM , who is AFAIK is the only CEO to write or at least edit his company's RNS's.

IMV quite positive LFL up 5.9% for the quarter ahead of the competition, and a move to mega pubs at London Bridge, Fulham Broadway and Manchester airport. Those who want to read the whole thing (and as an existing or potential investor you should)can see it here.

https://www.londonstockexchange.com/news-article/JDW/trading-update-announcement/16750331

See

https://www.londonstockexchange.com/news-article/PSN/q3-trading-statement/16750292

While it's increasingly hard to guess which bits of an RNS analysts will focus on, it seems a pretty solid , carefully positive statement.

AS a holder I was happy to see the 10500 build this year and committed forward sales of £2bill. Pessimists may focus on this bit.

"although the quantum and timing of future interest rate changes is uncertain and we continue to assess the implications of the recent Budget. We are seeing some signs of build cost inflation beginning to emerge in price negotiations for 2025 and are working closely with our supply chain to manage our costs, which will also be impacted by new building regulations and the employer national insurance increases announced in the recent Budget. We are seeking to mitigate the impact of these cost increases through robust commercial controls and other management actions."

I have no idea how the market will take this but I am happy to hold.

The morning news is that the merger is likely to be given approval. IMV, this is broadly positive for BT. It may mean greater competition, but it reduces the main players in the market and, in fact, makes BT no longer the market leader. Hence, less pressure from OFCOM?

Early market reception seems mildly positive, I expect Thursday's 3rd quarter update to be gently positive, I also believe we are nearing a point at which the chaotic, duplicative fibre build-out will begin to enter a rationalisation phase. I am comfortably ahead here but happy to hold in the belief that there is still some way to go (in an upward direction!!!)

Hi Fat...my rationale

A sound business, well-run in a market which is substantial and long-term.

A significant history of sound management, sound finances and a flexible approach to change.

A share price at recent lows, partially IMV, from fears of budgetary change which were broadly less than worst case.

Well-positioned in their market, others with much more tenuous positions.

A company I know quite well as a customer and former investor.

Prices may well have to rise., if they do then spoons position in the market as a low-cost supplier is IMV enhanced not damaged.

JDW's debt is as you say £600m , but debt service costs are around £52 m per annum, a similar level to 2023 and 2022 and is therefore not a major burden and is readily manageable, as cash on hand is£57m, and for example, renovation costs are £76 m pa and share buybacks incurred a £40 m cost last year.

As you point out 'spoons own the freehold of most of their pubs and are buying up freeholds where appropriate.

SO, I am comfortable with my investment, I bought here in the lows a couple of years ago and sold at a decent profit and hope/expect to do so again.

cheers.

The £11 million was the "Uncrossing trade"(look it up , it's worth understanding) where brokers/dealers square their books for the day , so not a "BUY", But clearly related to the much heavier than usual daily volume. Whether the Moncler story is true or not the worth of BRBY is being reassessed positively.

Having failed to buy a few days ago when stock was obviously very short , I have bought in today, at a price just over 3% lower...sometimes bad luck is actually good luck!. The headline refers to recent moves by two US-based entities who hold around 13%. Astonishingly they, others and insiders hold almost 95% of JDW stock , so it's little wonder that it's fairly volatile. Tho' I am by nature a long-term fairly passive holder, part of my logic here is my assumption that the recent sharp falls are overdone, at least in part due to that volatility. So ever the optimist I am happy to take a 20/30/40%profit in the medium term.

Let's see how good my judgement is!!

Moncler (Market cap around 14bn euros, but down 20% since the spring) could comfortably swallow Burberry even at a 30% uplift from today's MC ( about £3.2bn). Even if this prospective T/O does not happen the city chatter is good for Burberry, reminding everyone of the value of its profile, and history and that if either current or future management gets it sorted it is worth significantly more than today's SP.

My purchase here was based on the assumption that current management could not do worse than previous and that the right steps were being taken. I am around 40% up, having added when the SP was below 600p for a week or town in September, but I am NOT inclined to sell. Even if the current rumours prove to be unfounded ., though they are coming from several sources, they have, IMV, given the SP a significant rerating. I am happy to hold, beyond the resolution of this potential bid and through a subsequent SP fall. There is more value to be had here.

The talk is that Moncler are lining up a bid for BRBY, just a rumour at this stage but I've heard it from two separate sources, watch the action tomorrow.

HI Crossley I can't argue with your figures, which do paint a much less rosy picture than the relatively recent past. My re-investment here began a while ago, when, IMV the SP of most builders was predicated on a much gloomier picture than they deserved . I don't foresee a return to the industry figures pre- covid for some time, BUT I do see an upward trend and a likelihood of some consolidation in the industry (with PSN perhaps picking up a smaller distressed builder of which there are a few).This FY has seen a gradual increase in volume targets and I expect that to continue, I can imagine a scenario in which PSN are achieving 11/12k completions in the not too distant future, prices will start to rise if, as I hope and expect, interest rates drift gently lowerand recent substantial pay rise for many are absorbed.

I've said before that my timescales are measured in years rather than weeks and am anticipating holding here while the SP rises gently , dividends of a significant amount (but again not like the past)and my target of Inflation plus 10% is IMV comfortably within reach (indeed I am comfortably 30% + up as of now).

I gather from my contacts that my hope for some significant support for the housebuilding industry in the budget was dashed by friction between two leading female members of the cabinet BUT , it was deferred, not cancelled. I retain that hope.

So , in summary my position here is more about expectation than current data, a more supportive environment and a gentle return to levels of activity and SP, a bit above today's

I have held here since accumulating a significant position in the last 12/18 months , and after yesterdays sharp reverse I will be adding , even though the SP is now well above my average. My logic is simple , I think PSN is one of the more efficient builders, at least in money and land management terms and the industry , while it may have its ups and downs is here to stay.

I do fear that yesterday's budget reaction , higher gilt yields, a lower pound and the FTSE fall are a rational response to a stunningly ill-judged budget. NOT political comment, solely that basic economics tells me that you cannot tax your way to economic growth, and that the costs of the budget will be felt in stagnation at best, and recession at worst.

Nevertheless, my wealth is built on investment and I am by nature a long-term planner, so having accumulated a fair amount of cash in the belief that the market reaction to the budget would, necessarily, be negative,and may be prolonged. I am now deploying that cash , some of it here, some elsewhere and I shall post on a few other boards when/If I invest.

I don't seek to advise others but do welcome dissenting viewpoints(preferably backed by data and expressed politely!!)

UPDATE.... my order failed because insufficient stock was available.

I've just bought a few, that doesn't mean I think this is necessarily the bottom,or that this will be my only purchase here, merely that I do believe that, at some point in the foreseeable future theJDW SP will be higher than now. I may be foolish or I may be brave time will tell.