Member Info for Deadly4U

I mean I'm extremely bullish UK house market long term, it's just a simple supply and demand problem, BDEV being one of the largest builders, with an excellent balance sheet, seems like a good long term hold. Of course short term vol will shake out paper hands, but Britain needs more houses, and banks need more people to take out mortgages. GLA

Strictly,

Yeah my back of the envelope calculation is 30% liabilities for BDEV and 22% for BWY, obvious BWY wins that, but I wouldn't completely write off the Wilson Bowden Goodwill asset, surely the brand still has some value?

Yes I am just looking to buy and hold, so a bit different to your game :)

Deadly

Hey Strictly,

Thanks for those thoughts on the difference between BDEV and BWY. I can see where you are coming from, BWY does have a much better track record than BDEV, especially re 2008, which is especially pertinent given today's housing market. I also agree that BWY P/B is more attractive than BDEV, but I also like how much cash BDEV has currently.

I know that BDEV has almost £400 Million of liabilities due to the cladding scandal, and BWY exposure to it is far less at £200 Million or less. However, I am going to buy BDEV as I think it's going to provide a larger growth opportunity in the future. I understand that in the past it was completing over 20,000 homes a year and was Britain's largest builder for a long time. I think PSN has some issues currently and see BDEV taking advantage of the growing demand for housing and growing house building up to 20k again.

Now BWY may provide better % returns, but for me I think BDEV is a better risk/reward current play, alas I am a novice in this sector, so am doomed to be wrong, but I'll take the dividend!

Deadly

They literally just released a statement condemning "profiteering in the North Sea" and have outlined how a further windfall tax will solve all of the energy cap et al. problems. Kinda feels like a declaration of war on capitalism and free markets, but this sub seems to ignore how dangerous this kind of talk is

Clued, British Gas announced 10% of profits, not centrica, so they only pay like $10 M, if CNA it would have been laudable. On SSE selling Electricity for below market price, not going to happen, Gov needs to reform the CFD system and instead guarantee minimum profit margins, and not minimum prices. Business doesn't care about fairness, only profits

I mean the net assets are $4 Billion of Goodwill, probably only worth the 25p/£1 the market is rating them

Exactly! This high a price is not good for HBR, the market is pretty broken. How can industry survive if gas price is 10x what it was last year?

I mean isn't the short only 2.5% of the float? Does it have this big an effect on the sp?

Anyone worried here about political risk? The labour party has basically come out and said they would use energy companies profits in the North Sea to pay for the rise in energy bills. I know they aren't in power currently, and the Conservatives don't seem willing to do such a drastic thing, however if there is a general election it's seems likely Labour will win currently. Am I just inventing reasons to be worried or this a genuine risk? Thanks

I would close the short now :) Full year results are going to be great

Honestly, I know this is the wrong place to say this, but the current Nat Gas chart for UK is horrific. I mean if it stays at 600p a therm people are going to die this winter, gas is up almost 5x this time last year. I think the political risk on this share is going to rise sharply as people see HBR giving back $500 million to shareholders this year, and their energy bills tripling because Russia-Ukraine War caused gas prices to go crazy. I know the Gov already did the WT tax, which was just stupid as it actually impedes investing in more gas from North Sea, but anyway, I can see riots in the street if Gov does not guarantee lower energy prices, and how do they do that? My guess is whatever they come up with will not be good for HBR. I'm rly glad the share has recovered, but am actually worried because the results were TOO GOOD! GLA

I mean the results were amazing, but the $2 Billion FCF is not sustainable unless HBR make some big acquisitions, or POO goes crazy

What does it mean?

Does it have any alpha on BDEV? Or just that the share is currently on sale and about to release it's annual results, which look promising!

Hi Strictly,

I am also a newbie to Housebuilders, although not to stock picking, am thinking of buying BDEV over BWY as I think their balance sheet seems a lot better than BWY's. Any bad things about BDEV you know? Or you just prefer BWY management? Thanks

Results were pretty meh to be honest, but on the other hand, boring is good when it comes to WG! I can see the sp recovering slowly as the contracts keep coming in. GLA

I'm very tempted at these levels, regardless of falling earnings and unclear outlook, I think the business is intrinsically undervalued below £14

Almost blown through all of the $200 Million in less than 3 months!

Yeah I broadly agree Nacho, hopefully WG can win some more contracts and next year reinstate the div.

I suppose my thinking is the new CEO will want to signal that he has everything under control, that means that they will announce any possible impairments tomorrow and the sp should probably bottom in the next few days depending on the results. Barring any bad news with the sale, I expect the sp to slowly recover given how the balance sheet will look much better and the group should announce an adjusted profit this year.