Member Info for MarquessR

I won’t be holding my breath.

So, if we took up our rights and bought the extra shares, when should they show up in our accounts?

My online broker required me to have exercised my rights by close of business today. I’m guessing maybe the 27th? But I don’t know.

Hi Hexham,

Thanks for taking the time to reply. I wondered if you had to factor in the ‘value’ of the rights themselves, or just the 410GBX paid for the new shares themselves.

Looking at the actual ‘out of my pocket’ expenses seems the most common sense approach.

Thanks again.

Evening all.

I have a question about what is the right price to use for calculating my new average SP, once the extra shares I have purchased under the rights offer are added to my portfolio.

I am honestly not sure what the correct cost is to use and would welcome some advice. Many thanks.

Smith, personally I think the last couple days took us into overbought territory and this is a normal retraction. The EOY results were (IMO) good, but certainly not amazing, and I will be pleased as long as we stay above 7GBP, and onwards from there.

Looking at the RSI over the last 6 months, I am erring on the side of slow and steady upwards growth from here.

If I recall correctly the article I read regarding the sale of the family rights said the sale price was £1.65, and my SP graph on degiro shows a flash dip on Friday to £1.65 then straight back up, I assumed this was representative of that may rights being sold.

I really wasn’t expecting the price action we saw yesterday and so far today!

Is this a reaction

Somewhere in the middle at £8, I’d be happy with that if the dividends keep on coming!

£1.94 billion. Somewhat shy of my prediction and short of 2019 overall performance as well.

I think I was expecting more given the housing market over the last year. Hmm.

Sept 15 (Reuters) - British homebuilder Redrow Plc said on Wednesday the housing market has moderated in recent months and it expects sales rates to return to historically average levels over the course of the current financial year.

The company, which started scaling back its London operations last year to focus on high-return regional businesses, also said its pre-tax profit for the 52 weeks ended June 27 was 314 million pounds ($433.95 million), compared with 140 million pounds a year earlier.

Maybe! That would be interesting. Since that one big jump when the rumour first came out I have not seen any other news about the possibility. So I guess they managed to stop anything else leaking, or it is just a rumour?

Hi ilikehousebuilde,

I think earnings are going to be good, but the market is anticipating this and it is already reflected in the current SP. Like all other house builders, RDW will no doubt sound the alarm over the inflation of prices for raw materials eating into profit margins. Between this and (what I am hoping will be) a chunky dividend, I don't think the SP will gain any ground.

I missed the increased tax on dividends as part of the PM’s new plan. Maybe something to do with it?

https://apple.news/ASJTBQrIMRticMgnFKJCUBQ

There was a fair impact across my entire portfolio today. Not sure what had the market throwing a wobble.

Interesting reading - https://apple.news/AA26ctUvNQvyQOvo0ADsw_w

Makes reference to a 20% year on year increase in raw material costs.

But don’t worry, the BOA / BOE are sure that inflation is temporary ??

My pleasure Dimi123. I am interested to see if I am anywhere near the mark. Naturally I tend towards pessimism, but having been going through the rigours of trying to sell and buy a house for the last 8 months, I can attest to the near insane levels of market activity, especially in the last 4-6 months. (at least, in the not new build area of the market).

I hadn't really considered extra costs involved in exiting London. IIRC, the company was fairly vocal on its H1 results call this year about the good job they had done on pivoting to better target the demands of the current market (bigger houses / garden space etc). I don't have enough experience with RDW to know how much of a change they had to make from their previous business model.

Given the level of demand in the market overall and the lack of available housing, I dont think we will see a huge impact, unless the vast majority of their portfolio was based in inner city areas.

Eagle,

I didn't say anything of the sort. I simply suggested that if you were referring (By your comment 'Unsurprisingly we have posters who've just come up and make weird price drop predictions') to Wildtigers comment on the SP, (85p or some such) that Tigers opinion may be based on the Liberum price target, rather than just having made a price drop prediction.

I agree that the current SP is bonkers and makes no reflection of the future.

A really interesting, if somewhat scary read. I do wonder when these particular birds are coming home to roost. What, if anything, can be done to change the situation, or have we already crossed an invisible tipping point?

And the next question I guess, as an investor, is what can I (we) do to avoid the worst of the fallout. Diversification of investments into scarce assets?

Eagle86, if you are referring to Wildtigers 85p comment, it's only a guess but I think that prediction may be based on the Liberium Capital SP target of 82p. I didn't believe it myself and bought in above the 100p mark. Out of spare capital at the moment, but will certainly continue topping up if the SP stays this low or continues to drop.

Mr Graham would surely remind us that this is just Mr Market suffering from a phase of bottomless pessimism?

Hi all,

Interested to know the opinions of others with regards to the impact of the upcoming results, having watched the reaction to the results from Barratt.

A little bit of (very basic) math
In 2018, H1 revenue accounted for 46.4% of FY revenue.
In 2019, H1 revenue accounted for 46.2% of FY revenue.

2021 H1 revenue was £1.041B. Assuming this represents 46.3% of FY revenue, projected FY revenue hits £2.248B. (H2 Revenue projected at £1.207B)

Factors applied / to consider that may impact the results and forward projection above;

Applied - The Stamp Duty Holiday has had a consistent impact through FY 2021. I consider this to be highly likely.
Applied - Buyer activity has remained stable / consistent with previous annual patterns. I consider this to be highly likely.
To consider - Increased cost of materials will reduce margins. I consider this to be almost certain.
To consider - COVID related matters had a more significant negative impacted activity in H2 2021 when compared to H1. I consider this to be a realistic possibility.
To consider - The financial impact from the cladding crisis.I consider the chance of any significant impact from this to be highly unlikely. Based on my research and understanding of Redrow's business model it has very limited exposure to impacted structures.

Based on the above, I believe that;
It seems almost certain that RDW will achieve a revenue / net income beat of 2020.
It seems highly likely that RDW will achieve a revenue beat of 2019.
It seems almost certain that RDW will suffer from the increased costs of raw materials.
It seems likely that RDW will commit to a dividend payment that is at least equal to that of 2019.
It seems likely that the SP will not increase in any significant way. This is based on SP appreciation over the last 12 months and the likelihood of a significant dividend payment.

Language used is based on the probability yardstick. I am just a random person on the internet and this is entirely my opinion, and not advice. I am sticking with a hold rating at the moment.

What do you think I have missed / not considered? Do you agree or disagree? Would like to know what people think.