Member Info for karv1

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.

For what reason would they do an RL they have a pile of cash already.
for a takeover?

This is where a good CEO thinks outside of the box and takes advantage of a situation through takeovers, buybacks, and new ideas, and is separated from the poor ones that are stuck in a goldfish bowl.

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.

Why can we not expect a 17% dividend?
everything is speculation on the negative side.
Fundamentals are sound for the growth plan.
Cash in the bank I suspect will be near 1 billion if not more by April if you do the math
2022 was 90% sold by June factual.
If people try to get ahead of rate rises this may even cause a mini-boom as people try to get the 2/3/5 year rates lock-in.
Share price does not equal a cut dividend, it has been maintained except for the virus year for 5+ years and was returned after the virus.
Psn sells below average prices and is one of the cheaper new house builders.
Again to this date, no housing crash has happened I am betting that 17% holds time will tell.

The HSBC Building Materials team now forecasts a 20% fall in UK housing demand for a year from this autumn, a concomitant 7.5% fall in UK existing house prices, excluding central London at double that, and a 5% fall in UK new build prices."
I think someone there needs to pick the phone up and tell the HSBC MORTGAGE DEPARTMENT which has some of the tightest criteria out there and is still offering 90% and 95% mortgages about this groundbreaking news.
Because the HSBC mortgage team clearly does not believe this. with hundreds of billions in mortgages.

You have to go back 8 years to see this share price, you would have thought the company was in real trouble with how this SP is acting.
The reality is 90% of 2022 houses have already sold.
by the next dividend, PSN will have over 1 billion in cash again.
4% to 7% growth.
6 years of a land bank
to this point in time No housing crash.
HMRC said July was the highest amount of houses sold since September last year.
Nationwide said yesterday prices in august had gone up.
Everyone so afraid of losing money it creates a lemming effect of fear of what might happen, yet the fundamentals are sound.

More homes were sold in the UK in July than in any other month this year,
A total of 110,970 properties were sold in the UK during the month - the highest since September.
Consistent monthly sales of around 100,000 this year show that demand remains comparatively strong.
Sales in July were still 33% higher than the same month last year and 7.2% higher than June, HMRC said.

From BBC minus the normal bbc negative jargon
If these numbers were from UK plc the UK plc share price would be flying.

PSN would be and is my choice at 14% return, there are risks but if the dividend is maintained, this decision will pay off forever.
A 14.3 % return over 5 years will make you 100% if reinvested at the same price and if the dividend is reinvested and maintained.
In hindsight, Part of me wishes I had invested now rather than when I did.
My view on PSN has not changed this is still my best shot of making a million in an ISA in around 9 years with the yearly 20k and 14.3% dividends,
In some ways, the low price helps me move money from normal to ISA.
If the SP and dividends stay exactly the same for the next 4 to 5 years this will help long-term savers that are trying to build their ISA up.
You lose with one hand but win with the other hand.

Short term the drop sucks but long term we are laughing with 13.5% dividends, my ISA will hit 1 million in 10 years with current SP, and dividends.
My old target was running at 13 years—the capital paper loss v long-term returns.
There are some risks but if PSN can hold the line with cost and growth on the 4% to 7% then I suspect the dividend will be maintained.
1. PSN holds a lot of cash and after the dividend has 9 months to build a cash pile again.
2. PSN is one of the cheaper housebuilders.
3. PSN is one of the biggest housebuilders.
4. PSN has a lot of in-house suppliers to help with cost.
5. PSN has 89k housing plots 6+ years worth
6. PSN from a profit point of view seems very well run.
7. PSN profit is going up.
8. PSN has paid the same dividend since around 2017 if we exclude the virus year.
9. PSN has a large forward order book.
There is always a risk with house prices, interest rates, economy , but I am betting heavily on PSN's future,
Time will tell.

11.5% Dividend which equals a 100% return on investment in 8.7 years. with no reinvestment.
If you are able to reinvest at the same share price that investment time frame goes down to 6.5 years with no extra dividend rise or cuts.
We do not need the company to do amazing or even grow we just need the status quo.
The only dangers are a housing market crash most believe there might be a cool down in the market or a modest drop,
but demand is still outstripping supply to this date plus the Halifax said house prices were up 1.1% in April, so far so good.
PSN is in a good position with cash, landbanks , ongoing orders, and 290 active plots, with growth targets of between 4% and 7%
It is a very well refined working machine that sells a lot of cheap houses that should ride out any storm if one does appear.