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Lloy claims house prices will drop by 8% in 2023 and NatWest claims 7% .
If this is true it would take us all the way back to March prices of 2022
UK house prices in March
2017 £216K PSN payout 135p
2018 £224K PSN payout 235p
2019 £226K PSN payout 235p
2020 £231K PSN payout 235p
2021 £256K PSN payout 235p
2022 March £278K PSN payout 235p
2022 August £295k
Rightmove claims prices were higher in September.
The world is not going to end in 2023 People need a reality check.
No one can predict the future.
70p is a riddiculas statement, that logic is so floored for so many reasons.
One could argue that they might remove the 2nd surplus dividend payment for the time being ( I do think this will happen) but to suggest they going to pay 70p around 200m from 1 billion+ profit in 2022 is just nonsense.
If they can hit their target of 15k of new housing at 245k+ their housing revenue will be 3.7b+
The new housing operating margin of 31%
Then the dividend will be covered.
I am expecting a good trading update on November 8th
I am guessing what everyone will be looking at is the Current forward sales position.
I think the direction of PSN SP will be decided by a battle between the BOE and the government.
A. BOE WINS interest rates go through the roof house prices crash.
B Government WINS new planning policy, new housing help to buy BOE is stopped from keep raising rates, house prices go up in line with inflation.
C. A bodge mixture everyone saves face BOE stays independent rates go up by a small amount. house prices stagnate.
The Conservatives will do whatever they think is needed to stay in power and they will destroy the BOE independence if they get into the mindset that BOE is part of the problem of them getting re-elected.
I took a 50k punt on poly back when it really crashed looking at the insane dividend even with the odds that it might get nationalized and on the day that it dropped to its lowest by a huge percentage, I missed the buy by like 0.5%.
It is like all stocks no one can foresee the future, no one can foresee world events, government policies,
I am sitting on a huge loss as well.
1 of my reasons for a dividend stock like PSN was if The SP did fall you got the dividends until the SP recovers.
So I then look at the fundamentals of PSN, it has money with no debt + inventory . I would have preferred that the stock had gone up with dividends but we are where we are. So I look forward to adding to my position by 20% per year from the Dividends, knowing one day the wheel will turn.
I know inflation is seen as the enemy by everyone but think it could be fairly good, yes interest rates may go up but I suspect the government will not allow it to move by much otherwise It makes the spending cut pointless.
The inflation is currently running at 10%+ per year if this carries on over 1 to 3 years or even 5 years, people's salaries will start going up by a lot, a 30k salary could be like 48k over 5 years with 10% inflation. do we really think PSN will still be selling houses for 245k or if we believe the doom and gloomers with their 40% drop prediction so equal 150k, I would say this is very unlikely, the general rule of thumb is everything always goes up in time, most things like salaries/ housing rent never goes down once they go up.
topher73 hope you feel better now was there any need for this message?
One could say a chuck of your profits is a side effect of war and not totally your skill set.
One could say a big chunk if not all of our paper losses are a side effect of a war, not our total lack of skills.
PSN houses sell for 245k on average half of these are first-time buyers rest will have equity, of the first-time buyers at 245k they will have a minimum 5% deposit leaving 233k with a 5% mortgages max payment of 11.5k under 1k a month,
most people pay this in rent maybe less up north.
I think 5% total cost is not enough to affect PSN I think 7% to 8% would. I think the government would not let BOE raise it that high no matter what's happening with inflation.
I have an ISA goal within 8 years using PSN and at the moment it really going the wrong way but the target is far from over, using compound dividends. Though many may disagree on the dividends I have seen no evidence that this is going to change.
The only light in the dark tunnel on the current SP for existing investors is for every 20k we move into an ISA could turn into 40k to 60k in time at the current SP.
As for the dividend, until there is any change in profits, I do not see any reason for the dividend to change due to the fact PSN is a money-making machine with no debts. if anything I foresee profits going up in the short term and long term.
The Medium-term is harder to call but when you take into account that they sell cheap houses with a shortage of houses in the UK I think we be fine.
If PSN were to cut the dividend in half ie the surplus payment from 235p to say 125p and this is a big if, it would simply just very rapidly grow the PSN bank balance by 400+m to hold 1.2b to 1.4 billion in cash by 2023 end. I think we would then see a huge rise in the dividend payout. from 2024 onwards until we get back to 235p.
When you go by their completions of 6500 in H1 with the guidance of 14500 to 15000 completes by year-end, also with the guidance of 4% to 7% growth targets.
Would this not be a good time for the company to get Brave and defensive and announce a huge share buyback something like 400m 10% this would save 75m a year and could help protect the dividend and the SP. or any kind of share buyback.
I am on this rollercoaster for the long term I am not worried about a recession, My concern is that we get taken over by a flimsy offer of 35% above price and the institutions agree as they never look longer term.
You have to look past all the noise, there is not a week that goes past with a story in the papers talking about a housing crash and they have been doing this for many years.
You just need to look at the fundamentals of a company making nearly 1 billion a year on a value of 3.9 billion. with no debt and around 800m in cash by year-end with 6 years of land bank with 2.32b forward order book and 3.5 billion of inventory. near 20% return in dividends.
In a market desperately short of new houses.
If you were to take the SP as a pure guide you would have thought the company was in dire straights and no one was buying houses.
gov/uk.... The provisional non-seasonally adjusted estimate of UK residential transactions in August 2022 is 114,440, 9.7% higher than August 2021 and 4.4% higher than July 2022
gov/uk .....UK house prices increased by 15.5% in the year to July 2022, up from 7.8% in June 2022.
Paulo the company is sound; everyone has to make their own choices, but when you hear stories about people losing money on the stock market, it is mostly because they sold.
it sucks seeing your money go down but it is only paper lost if you can afford to hold. even if it goes down to a £1 or up to £30.
Until you sell you still own the same amount of shares. the company is cyclical and so is the stock if you are lucky you might be able to buy back in when it/if it goes lower.
The question you have to ask yourself is how long will it take to save up that 17k
versus just waiting even if the doom and gloomers are right and it takes 6 months 1 year 2 years 5 years? to recover your 17K plus dividends
while saving another 17k= equal 34k
Plan b sit on 17k loss saving money for possibly many years depending on your situation trying to get back your losses
Paddy After results I think the first one is standard pay out the second one is the surplus payout. The only thing I never understood is why they brought the second/surplus one forward this year. I wondered if they were considering a share buyback or a 3rd mini dividend at some point unless I am getting my stocks/dividend dates mixed up.
There is a risk on the 17.4% dividend but by no means is it in trouble.
They raised house outputs On track to achieve c.10% increase in active outlets by the end of the current year with 60 outlets opened in the period;
re-iterate guidance of 14,500 -15,000 legal completions this year= good profits
The first half was 6652 legal completions.
At the moment no housing crash,
If they were only to pay out 375min dividends instead of 750m ( rounding up these numbers) what are they going to do with the rest of the profits?
Unless the housing market actually falls off a cliff in the next month or 2 and everyone cancels their buys?
The last known information on house prices from July and August actually shows a rise in prices.
The last know cash figure was 780m in June minus say 375m dividend in July and I think a percentage of this was paided out in shares = total minimum cash position of 405m+
The last 6 months of 2022 should equal 400m to 500m profit this should take us back near total cash of minimum 800m+.
We then have 3 to 4 months until April 2023 for the next dividend which should of add 250m to the cash pile and we back to
1 billion+ cash.
If there is no crash, then there is no reason to cancel the dividend. They have maintained it for 5 years+ and prices have never been better.
Trumph1 if you are wrong the rewards for holding the cheapest selling house builder will be amazing, the SP is already down 60% back to 2014 SP with PSN average selling price of that time selling for £190,533 which equaled 475m profit versus 2022 £245,597 of which is still cheaper than the UK average.
if someone had a 500k investment with a compounded dividend at 17.4%
year interest accrued Interest Balance
1 £87,000.00 £87,000.00 £587,000.00
2 £102,138.00 £189,138.00 £689,138.00
3 £119,910.01 £309,048.01 £809,048.01
4 £140,774.35 £449,822.37 £949,822.37
5 £165,269.09 £615,091.46 £1,115,091.46
6 £194,025.91 £809,117.37 £1,309,117.37
7 £227,786.42 £1,036,903.79 £1,536,903.79
8 £267,421.26 £1,304,325.05 £1,804,325.05
9 £313,952.56 £1,618,277.61 £2,118,277.61
10 £368,580.30 £1,986,857.92 £2,486,857.92
If everything stays the same
Worth the risk Yes
Is the company safe yes
Does it have a long-term view yes
Does it have a lot of debt nope
Does it has a lot of cash yes
These are companies' go-in cycles and can make people rich if they want to take the chance if the timing is right.
Does anyone thinks PSN will go bust NO, though there are no guarantees it like 99.9% safe.
Steve if the dividend holds we will be laughing all the way to the bank.
What people do not understand is house prices will settle down through inflation,
I am no expert on inflation but
CPI inflation is forecast to peak at 14% in Q4 2022, before falling to 5% by the end of 2023. Inflation is expected to drop back to the Bank of England's 2% target by Q4 2024. The UK.
If I understand this correctly this is around a 20% rise over 2 years.
if prices stay the same I will be happy even if inflation lowers the price in real terms some.