Member Info for karv1

Its all the unknowns that's killing this SP and then the dividend removal.

I think 85% of the motor loan book might be affected then it depends on what amount were DCA contracts.

I think i read that Martin lewis claims 40% of the market were DCA if this is correct it would depend on CBG figures.

It is probably why the numbers vary from 50m to250m.

FCA might not do anything about normal commissions on normal contracts other wise where do you stop brokers of every industry ie mortgages/ pension/ /holidays/ loans/

DCA is a different matter.

FCA have been aware on this system forever and was ok with it and did not stop it until2021.

Every month that goes pass CBG banks 14m if there are no other write downs.

Best outcome FCA say no action needed SP goes up 100% instantly and more over time.

Semi bad outcome low pay outs 50m to 150m range

Bad outcome this drags on for 18 months to 2 years maybe longer with the bad news in 9months or an extension for 6 months then 37 weeks to action by which time CBG banks 240m to 330m.

If it really drags on for 3 years they would have banked 490m I think this is unlikely as the FCA would want to draw a line under this.

We will then end up owning a company worth 450m that makes 165m after tax profit.

On trying to decide if to invest more and not to panic sell i have looked up some numbers

total motor finance.

If a pay-out does happen.

The practice stopped by FCA in jan 2021 I think i read some where that CBG stop the practice in 2016 or 2017 did i read this correctly?

My questions if anyone has the answer is

1) when did CBG stop this.

2) anyone have any clue on the % mark up

3) how would they work out what the commission or what the extra interest was would it state it on the contract?

2008 414m using 1% interest at 4m

2009 443m 4.4m

2010 649m 6.49m

2011 870m 8.7m

2012 1086m 10.86m

2013 1278m 12.78m

2014 1458m 14.58m

2015 1600m 16m

2016 1704m 17m

2017 1761m 17.6m

2018 1715m 17.6m

2019 1775m 17.7m

2020 1749m 17.49m

=165m+at 1% interest and 330m+ interest at 2%+ not including any compound interest that could be added with 100% claims.

Most likely 50%to75% claims

i am guessing most ran from 1 to 5 years

How ever bonkers this sounds i would be over the moon if it is only 200m that the analyst claims . This 200m possible compensation is a bump in the road in the grand scheme for this company not a 80% share price fall.

Even if it was 400m it would mean no dividend for 2025.but survivable.

In hind sight I wished I waited 2 days before investing here. and getting 22% better price

though i added more today I might repeat that message again if goes down more .time will tell.

From what i see the core business looks sound .

CBG is making plenty of money.

Using 2023 figures Excluding Novitas and 2022 figures they earned total of 500m Adjusted operating profit and 300m after tax against current value of 460m which looks insane value against 2 years of profits.

If this fine does happens and is around the 200m mark or nothing happens then this share will sky rock upwards and if the company grows.

it is not impossible to imagine that we might see 100% to 400% returns excluding any future dividends.

Risk v Rewards in my view with the limited knowledge i can find rewards out weights risk by many folds.

No actual reason for tomorrow, I came in at a very lucky price today, very near todays lows. I am hoping for a good bounce back tomorrow.

How safe do people feel the dividend is with everything going on?

My first investment here at what seems to be a good price depending on tomorrow.

The dividend kind of sucks, I think they are being over-cautious.

Will this go up in time yes.

Is it worth the wait for the SP to rise with dividends rather than picking another house builder or a company that pays better dividends now? That is the choice the dividend hunters will need to decide.

On a side note, 3.7 billion is in inventory with 2 billion in land and 1.4 billion work in progress aka (We have ended the period

with around 4,700 equivalent units)

Trading liabilities look like it has gone down by a few hundred million.

For new shareholders looking for long-term, this is a no brainer

For dividend hunters, it sucks. losing 50% and then having the dividend slashed by 3/4.

large Profits will return in time I suspect the dividend will grow slowly 60p 80p 100p 120p I think we need to wait for 4 to 5 years for a 10% return unless the market in a year or 2 totally recovers and start making 500m to 1 billion a year again.

As previously announced, payments will be made semi-annually and the

Board intends to pay an interim dividend in the second half of this year concerning 2023.

I guess that it will be a 50% payout after-tax profits from the first 6 months.

I am hoping for 50p but suspect it will be nearer 30p.

My expectations for pre-tax profits from the first 6 months are low in the current market.

On a side note, they said planning permission slowed them down.

This slowdown and delay in new builds could give them plenty of time to get in front on planning permission from 23 to 24 for 24/25/26

If things improve, I predict a second dividend of 50p or less.
They already made the hard call of the dividend cut and said their goal is to match this year's payout as a minimum for future payouts. So we are basically in year 1 of the new dividend policy so it going to be a respectful amount at the same time being covered by profits while we are in this situation, it will be followed by a gradual dividend rise every year while banking more profits.
In good times this is a 1billion+profit making company
In bad times we just need 200m to 400m+
Of the 1.7billion order book as at 26 April 2023 (which seems to be improving)
If we get between 25% to 30% return on this it should cover the dividend and it is still early days for 2023 plus the profits from q1.

We may get 1 more rate rise but If inflation comes down the rates will follow and the rollercoaster ride will then gradually follow upwards.
The question is have we already hit the bottom and now the slow climb?
We all know when PSN starts knocking out 14k houses again with 2% rates we not going to be anywhere near this SP.
Timing is everything.

On a side thought one could argue the housing market has dropped due to inflation in real terms.
If house prices stagnate or even drop a few % which would be nothing on the grand scale of things and if inflation carries on at 10%to 11%% this year then you could argue that we have a real-term drop of around 10% to 15%while at the same time not much drop on sell value.
I would say the longer inflation keeps going at 10%+
will cause more pain now but cause a bigger housing boom in the future when inflation comes down and rates come down. when the river dam breaks and lost people with bigger deposits,s bigger salaries, and bigger populations, are after the same few houses.

HL is a fantastic site but I nearly got caught out when a rights issue was not included in a company value before now, I think I checked the main London exchange site and realized,
Either way a fairly good week on PSN.
Day by day the year ticks on no housing crash with more and more talk of rates peaking.
The river of people wanting to own a house is still flowing it might be partly dammed up at the moment but eventually, that dam will break. and the same problems will persist not enough houses. with a growing population.

I guess the old special dividend will be cut in half like the first dividend to make a 60p followed by a 50p dividend with a 5% to 7% rise yearly until the cash flow is back above 1.5 billion.
It's amazing how fast things can move in the housing market and how much people do not understand including me we read the numbers and try to make sense of them.
With confidence taking a beating in the housing market caused by the doom and gloom BOE, the sales will take a hit this year but if I am correct what people are missing is that they are still building houses,
There is a difference between legal completions and houses being built if I have read this correctly on the last report they have between 3,900 equivalent units on the balance sheet which currently have around 30% return though this might go down. if things do not improve this year.
The current trend is to sell 8 to 9k houses in 2023 which leaves 5k+ houses unsold add this to 3900 of the housing assets.
By the end of this year, one could argue that they might have 8000 to 9000k in housing assets due to market conditions, with less cash in 2023 but the potential to make 1.5b+ profit with housing stock and 2024 builds for 2024/2025.
Last I saw there still intend to build 14k to 15k+ houses as far as I know they not laying anyone off,
What you got to ask yourself is what they going to do with the money no matter if it is in 2024/25 or even 26 this company is going to start to grow that cash pile by loads.

This company is a pure money-making machine it's one of the safest companies in the UK and it is cheap in every ratio.

As previously announced, payments will be made semi-annually and the Board intends to pay an interim dividend in the second half of this year in relation to 2023.
What do people think, they cut the final from 125p in half to 60p likely to rebrand the 110p special to an interim and cut it in half? unless I miss something.
This would equal 8.5%

Inflation has peaked.
Rates may go up 1 more time but those so-called experts say they will start to come down this year.
They still going to build 14k+ houses whether they sell them this year or next.
The 5-year fix rates will start to fall as they compete for those customers.
one could argue i might be positive in my view while other are only negative.
If I'm wrong and they don't make a lot of cash they will have tons and tons of housing stock to sell next year.
If I am right they will have tons to sell and good profits. either way, they still building houses.

Mike the guardian and the telegraph have been saying this every month for the last 5 years google housing price drop and guardian pick a month and you find an article.
Rightmove other than the government is the most extensive database of housing in the UK said prices in January were the same.

Now the nonsense is over
1.5b order an improvement from the last trading update by 50%
Dividend 60p with maybe another 60p (fingers crossed) at the end of the year depending on profits.
860m cash is not bad when you count the 250m payout and the beginning of the year was still recovering from covid—and the 750m dividend was paid out.
279 sites mean still lots of houses to be sold and a good line of upcoming houses. more profits for this year.
Added 14,670 plots across 66 sites should help large builds.
Still, no housing crash and we are now 1/6 already through the year, reading some of the views on here you would have thought PSN has just gone bust.
In reality, most companies in FTSE would love to be in PSN position on cash v debt and stock with a near monopoly on customer supply.

I found this and found it very interesting on a youtube video some good stuff, on property prices just google the line.
The weekly ‘UK Property Market Stat Show’ is presented by Chris Watkin week7 stats

My grammar is shocking I need an edit button on here.

Houses are still selling no one in their right mind would drop 10% to 15% straight away.
After maybe a few weeks with no interest, they would drop 5%
Rental is more expensive still in many areas at the lower end of the market at 5%
Using Norfolk as a guide if was a 100% mortgage A 125k mortgage for the cheapest 3-bed terrace house on Rightmove ie not shared or on auction, at 5% using interest only as it is dead money same as rent is £521 and at 4% it drops to £417 versus £730 cheapest 3-bed rentals.

The cheapest semi 3 bed 160k mortgage is £533 at 4% and £677 at 5% interest only, versus the cheapest semi to rent a 3 bed is £830.

A detached house 3 bed 250k at 5% is £1042 and £844 at 4% v £900 renting cheapest detached.
So for Norfolk, you good make a guest that around a 240k mortgage is the break-even number.at 5%
Not taking into account the will to want to own a house and the size of deposits. also not counting capital repayments just Interest v rent only
If you look at PSN sites randomly picking from southeast to anywhere in England, sites are between 70% to 100% sold not taking into account the age of sites as unable to tell how long they have been up. I have not seen any PSN site struggling to sell. but there are probably 259 of them I only randomly clicked on 10 sites over a few areas.
On a side note, the southeast is a different ball game on affordability on buying but this has always been the case. The 4 to 5% will be making it harder in the southeast of the country.

I personally think analysts are clueless they seem to follow the prices rather than predict the prices. House builders are near impossible to predict in this type of market. it is not like someone that sells jam jars to the same customer for 10 years, who say we hoping to sell a few more but raw materials have gone up 5% an analyst can make a good crack at guessing the profits.
Housing The BOE is guessing every month.
Inflation 10%
rates 4%
The economy is changing every month.
House prices are changing every month.
The job market is still strong.
The war.
Gas prices.
The weather.
Unknown items. x these all together and you get the best guess.
As banburyboy said those numbers might be out of date.
The analysts are 100% different from each other with the same information.
The person who has a low 98.4p Is probably explaining to his boss that it was a typing mistake.