Member Info for New2This

Yes - I took the gamble to buy some more yesterday. Didn't get the bottom but still happy given this update. All the public announcements from this company , plus recent significant director buy , are positive. Also the large CAPEX spend recently shows the directors are either very confident or very incompetent. Hopefully the former .

Reread the half year results again and have decided to top up. The Euro/sterling rate has moved in the last six weeks and I have read some reports that suggest this may continue. This will help European portfolio and the UK business still seems strong. Good dividend payer and plenty of cash to continue to make acquisitions. Share Price seems too low and this is a share that I'm pretty confident will give a good if not spectacular return.

Good to see a director backing up positive trading statements with £95K of their own money. There is a real difference of opinion between these actions and the markets view of the stock with large drop over the last 3 months. I have been waiting for a director buy to back up their RNS so have sided with them with a top up. This is either a good opportunity of the market reading the share wrong or the directors having rose tinted spectacles. My view is that such a large director buy shows at least some conviction on their behalf and unless they are idiots they should have a good view of future prospects.

Fair comment and thanks for replying If they really have overpaid on a committed transaction and without finance in place that is not a great position but will have to wait and see how it pans out.

Hi Sain. Just a couple of questions if you could help given your industry and regional knowledge. 1. Do you know whether they are commited to these sites or just entered into some option agreement ? 2. If they are really committed is this usual without proof of funds / finance - it would seem strange to me if the seller would not have sought reassurance about payment ? 3. Assuming the worst case and MAR break a contract as cannot find the funds I presume the sellers would need to mitigate loss and try to find an alternative buyer. In this case do you have any idea as to the movement in the open market for land in the areas they have committed since then ? Not much we can do at present but if you know some of the answers to these questions it would help understand the risk. Thanks in advance

Agreed. I can understand that it may take a while to appoint new directors and they will definitely do this as there is pressure from the banks but why not put something in like " the search for new directors is going well with discussions ongoing with some high quality candidates ". At least this would reinforce that it remains a high priority in the development of the business. It is almost as if having been stung by previous RNS's they are have taken a conscious effort to say as little as possible. I always wonder what advice they are given as so many companies get the balance wrong in my opinion. As to the company itself , whilst you took probably the wise move to bail out I have stayed put - in part my natural stubboness and in part due to the two posters we had on here with in my view dubious motives. Much of what they said I agreed with but it was the way it was said ! . If the intention was to make me sell it had the opposite effect. I may regret that but as I said previously you win some and you lose some and none of us get it right all of the time. This is a small part of my portfolio so will just leave as monitor the next set of results.

We all know that AIM carries risk so no news there. It also carries the opportunity for rewards and as long as you accept this I don't see the problem. I also don't quite understand why Leveraged is using his/her talents to educate us on the risks here. There is no mention of him/her being invested and I'm going to stick my neck out and say it doesn't look like this is going to happen any time soon. I'm not interested in finding out why the interests in this share but I guess there must be one. Whatever it is I wish him/her well in it. Hopefully the anger will subside soon. I don't want to speak for Sain but certainly clear weaknesses exist in the management but the company has many other assets and net assets exceeding MC. It also has very likely profits banked for next year and there is a positive environment for builders at the moment. Agreed it is cyclical - (again no news there.) although I expect various factors mean housing shortages will continue for a while and interest rates will remain low for some time to come. The question is whether the major shareholders really want to fix the management shortcomings and how long it will take. I am betting that over time this will happen but am not arrogant to say I am right . This is an opinion only and if I am wrong I will lose out. If I am right , at this share price there is good upside in the medium term. I am in no rush . Good luck all.

Yes - I should have waited but had to do the school run so made a decision . Lost a few points but overall think this is a good price - would have preferred your entry price but still happy with mine.

Couldn't resist ! Bought 10000 this morning at 59.75p - I agree the NED's are not inspiring particularly the academic but with SP below NAV this should just be a case of turning the sites into cash - hopefully they can manage that ok !

I am thinking of putting some in here and would appreciate your thoughts on the following: Reading the RNS the reduction in profit seems to be due to : 1.A strategic decision to sell properties that were originally meant to rent out ( and therefore MAR are unable to book the "profit" between cost and Net Realisable Value they would have been able to do if they had held as an investment.) I presume this decision has not been made because they see no rental opportunity but because they see an opportunity to make good profit on the sales. This will of course accelerate cash flow whereas rental income would only cover the outlay over several years. But 100% of profit is deferred into the year the assets are sold. Not a bad thing with corporation tax rates reducing although the effect of this is small and I am not suggesting in any way this is the reason for the change. 2. They are less advanced in build on some sites than they had originally thought. Of the two this is I think a bit more of a concern because it implies they have materially adjusted their estimates of only a month ago . As I have mentioned previously I used to audit Furlong Homes so unless MAR operate differently the idea is that they estimate the project profit and define the project as a long term contract they take the relevant proportion of progress to P&L. This is always an estimate and relies on the skills of the surveyors but to get it wrong does imply some serious lack of control or possibly overegging the estimate due to "managerial pressure". They do not state that the original costs or revenue element are wrong but only the % progress so this implies only a change in when the profit will be booked , not the overall profit. Therefore both reasons given imply that this is profit deferral only and that profit will come through next year - this is the equivalent of TEF's forward sales although obviously much smaller scale. Finally market cap is around £74million and I reckon post tax net assets will be given at around £70 million when the results come out - this is supported by the RNS stating they will be at least £68.3 million. Therefore the market is not allowing for any of the future profit deferred to next year or the value in land bank , goodwill etc. On this basis I would think the net assets underpin the SP at about this price and the only way is up - although this will be slow as this sudden change to expected profit will have hit confidence hugely. I frequently get these things wrong but these are my thoughts. Any flaws in my analysis that anyone can see before I buy ?

Thanks - nice to know I haven't missed anything. It does seem to be an overreaction to some recent issues but nothing that can't be fixed and very happy with the dividend and potential for sale.

I agree there is something that doesn't quite add up - the drop has been huge over the last few months and despite a weakness in trading it still seems overdone , yet another 2 million sale has gone through today. Like many I have been in for a while so even at this price I am still doubling my investment however it is odd. I have no plans to sell and will take the 4+% dividend anyday, but it still hurts when a share drops so much and I can't work out why. You and Buller seem to have a good industry knowledge and presumably there isn't anything cataclysmic out there like rumours of significant client losses or new entrants into the market ?

http://www.savills.co.uk/_news/newsitem.aspx?intSitePageId=72418&intNewsSitePageId=173307-0&intNewsMonth=02&intNewsYear=2014

Sain I found this press release which is a month old now so I know is not new news but is this the same property you were talking about in your last post ? If so how doe the £1.5 million rental ( but for more floor space) compare with the price you thought they would get ? Thanks

I bought these in 2006 so have seen the lows and more recently the highs. When they reached above 70p I thought about selling but looked again at the fundamentals and decided to hold on. I still think this is a strong , well run company and in a good sector plus it looks ripe for being bought by a larger group. There is continual concerns about raw material prices going up but they have scope to cut operating costs , interest costs will reduce naturally and people still buy bread and cakes. The P/E is low and I believe the dividend will grow each year. In short I am holding on to my 50,000 shares but I do have a fairly healthy buffer at around 27p average price so am happy to hold for the long run and increased dividends.

Just sold out - I think this share shoudl be a winner long term but looking out of the window I can see another "bad weather" excuse coming up so am selling at a reasonable profit rather than risk a fall on the trading update.

Looks like I could have bought a bit cheaper if I'd waited but I'm comfortable with the price I got. I guess that even at the sharp reduction there will be some people who bought in when the price was much lower and are now panicking a bit and want to get out with a profit. They should have more faith. As I said I'm happy to hold for a year at least and expect the price to be much healthier then and also a small dividend. Bought another 2500 TEF's today aswell so been an active trading day for me as I tend to buy and hold.

I have reinvested my proceeds from lastweek's sale into 20,000 more shares - seeing them drop so much does look like an overeaction. I expect to hang on to them for a while.

I picked up a comment from you on the TEF site and after checking THG out bought 60,000 of these at about 21 p so firstly thanks for the tip ! I sold half just before the results at 36p so am sitting on the other half. I think the drop is overdone as the company seems pretty strong and I'm confident that they are one to sit on for the next year at least. As you say their balance sheet is much stronger and they do seem to have a pretty good niche. Not fussed about the dividend as it woudl only have been a token amount but think if/when it is announced it will signal a further rise. Also have 10,000 TEF shares - I once did the audit of Furlongs when Andrew Wiseman was the FD ( quite a few years ago now) and remember him saying to me that once they had identified the sites the rest was like turning a cog. Added to this the great sales and marketing they have I'm looking to buy a few more of these if they just drop a bit more. Good Luck

Kicking myself because I had a bad feeling about this and vey nearly sold up a couple of onths ago when I would have broken even - now have to decide whether to stay in or cut losses At least today brought great results from TEF where i have a larger investment and issued a greattrading update today to balance news from SDL