Member Info for Crossley

Flabbergasted by the SP movement this morning

Looks like they’ve already purchased about 82.5m?

I shall look forward to that 3.5p difference it should make to the SP at some point

Hi Kyusho ,

Thanks for taking the time to respond!

Maybe your second post may carry some weight? I couldn’t get my head round how 3% of total developments (although, they did state a few large ones) can have such a massive bearing.

Either way, have a great weekend

The Group has recently become aware that within one of its six divisions, the South Division, the total full-life cost projections to complete 9 out of its 46 developments, including some large-scale schemes, have been understated by c. 10% of the total build costs. To add further context to the 9 developments in question, it is important to note that the Group as a whole has around 300 developments.

The estimated one-off impact of adjusting for the revised development cost assumptions reduces the Board's expectations for adjusted profit before tax for FY24 by c. £80m, for FY25 by c. £30m, and FY26 by c. £5m. The reduction in expectations in these three years relates to overall cost estimates across the full life of the developments. As a result, the Board now expects Group adjusted profit before tax in FY24 to be c. £350m.

How 9 of 46 developments in the south & 9 of 300 developments overall can equate to a hit of 80m this year alone (20% of FY) when build costs have been understated by 10%. A genuine question, I can’t get my head around these figures?

I know I’ve been harping on about the margins for a while now on Housebuilders and the quantities of units that need to be shifted to repeat past profits. Is this now becoming apparent? An exert from this morning….

Berenberg said that the profit warning doesn't challenge the fundamentals of the partnership business model, but raises questions about what is an achievable and sustainable mid-term profit margin, "which in turn also has an impact on ROCE outcomes", said analyst Harry Goad.

"Secondly, we think this issue raises a traditional industry concern about the risks faced by any housebuilder that is growing volumes at pace given the associated challenge of achieving acceptable and well-balanced outcomes across matters such as build quality, customer service and profitability," Goad said.

The broker cut its target price for the stock from 1,380p to 1,000p and kept a 'hold' rating.

Morning Casa,

Been a while, hope your well!

I’ve been looking into Vistry this morning but on first glance I can’t see the figures. This year, after taking the 80m hit, expected adjusted profits of 350m over 18000 units. Do you see this, taken from their announcement, as being achievable? They ain’t exactly been the most trustworthy in the past have they?

Notwithstanding the one-off adjustment announced today, we remain committed to delivering a strong increase in high quality mixed tenure housing, our medium-term target of £800m adjusted operating profit, and £1 billion of capital distributions to shareholders."

What’s you view on this please mate?

Wow, auction again and now -36%

Look at Vistry’s fall from grace this am after cost update

Well Mark,

The data has not done my portfolio any harm over the immediate term.

One question, are you confusing hours worked with the average hourly earnings data? That seems to have a higher relevance than average weekly hours?

Whichever, best of luck and have a great weekend

Morning Christofer,

Might be a wise move. I find Bailey’s statement a bit bewildering about “more aggressive rate cuts”. On the other hand he said to the Guardian, “we’ve got to watch the Middle East” at the same time? Doesn’t add up to me, his timing. When Brent has risen 10.4% as we speak over the last week

Sidelines?

Thanks for the response,

And there’s me thinking you just got up early every am!

Have a great weekend

Morning Armani,

Where are you seeing that please? I’m not. Have a link please?

May we see £54 here this morning?

Hope your well

Still the same Strictly.

I look forward to hearing from you and, hopefully, receiving access. I’ll need to book myself a ‘holiday’ to catch up!

Thanks Strictly,

Regards

Ps Strictly,

Do you still have Bdev fair value at £4.49 I believe it was when you last ‘priced’ them?

TIA, Crossley

Morning Strictly,

I don’t appear to have access to the blog anymore which has upset me a little. I thought I’d upset you in some way. Maybe an oversight on your part? I’d love to return if possible please. I’ve just taken a position in BP this morning at £3.82. On the Rio thing, I’m pleased it has helped. It’s always been one of my favourite shares. When it goes, it goes like no other! 15% already this end in three weeks!

Added, larger than original purchase @ £3.82

With LGen’s announcement will these be flats to buy, or flats to rent? Just need Labour to bring in the EPC C rating by 2030 for rental properties in now and they’ll be well on their way to total rental control by large corporations

https://group.legalandgeneral.com/media/ugtppl1w/adp-ii-lg-final-2092024.pdf

I’ve gone larger into Rio.

Had great results for the last three years at buying at the £45-46 mark and exiting around £60. It’s been a pretty quick turn around too. Still a great buy at current prices in my opinion although you must do your own…..

For me, I’m just holding until I see fit to exit. Made too much of a mess trying to trade. Personally, I’m more interested in BP & Rio at the moment after building a position in both recently. I’ll have a stab at just the one rate cut in November. I think the core inflation may be a thorn myself.

Best of luck going forward