Member Info for NickH101

This is a pretty good company.
Wouldn’t you come back to the table when the share price has more than halved? I’m not sure that the share price will go up much until the wider economy and the housing markets start to recover. Concerned that they’ll sell out to a vulture fund for 120/130 in the meantime.

Life is clearly going to continue to be tricky in the wider building industry but I think the materials suppliers will outperform the builders. While volumes may drop a bit, the key challenge has been to show that prices can recover raw material inflation. Both MBH and Breedon have today shown that. The sharp sell off in the supplier industry was overdone.

I agree. Clearly building volumes will fall in the next year and energy costs are up (with French cement companies being supported by the Govt) but surely a falling pound and a disciplined company, with adequate cash, should be able to weather this and be perfectly positioned when the market picks up. The sell off, when compared to the builders, seems overdone.

So have I

These seem pretty decent results to me. Revenues and profits up.
The negative was a decline in margin, though this will probably be rectified by the recently announced price increases.
The main risks remain the state of the UK economy and the potential decline in building work. It will be interesting to see what senior management say in the investor conference call on Thursday.
A P/E of a bit over 13 seems slightly low for a company, which continues to perform but I’m cautious about any share purchases in the context of wider market weakness.

I have no idea whether it will go up or down in the short term but the latest UK Construction stats were positive and we know that this is a company with decent long term prospects.
The big issue will be UK govt policy and one can make arguments for both positive and negative change. My biggest concern is a reduction in govt capital spending to pay for reductions in tax, though the lack of infrastructure spending over the last 20 years is becoming increasingly apparent. Is Truss a populist like Johnson or a more strategic thinker?

I have no idea whether it will go up or down in the short term but the latest UK Construction stats were positive and we know that this is a company with decent long term prospects.
The big issue will be UK govt policy and one can make arguments for both positive and negative change. My biggest concern is a reduction in govt capital spending to pay for reductions in tax, though the lack of infrastructure spending over the last 20 years is becoming increasingly apparent. Is Truss a populist like Johnson or a more strategic thinker?

Every investor should avoid companies, which are not commercial.

I agree that they have a good model. It will be interesting to see whether they can switch to less energy intensive materials.

I think the problem is that it used to be a defensive share. The institutions have decided that it is poorly led and that it is now a good opportunity to offload. It’s quite hard to push a fundamental value argument when the institutions don’t like something.
I am going to hold for the long term but am expecting further falls over the next 12 months.

I have sold Boohoo today, some way off the bottom but at a considerable loss.
I have been happy to hold onto Boohoo, despite the ESG issues and the institutions’ loss of confidence/trust, as I thought it would still deliver a strong financial performance. How wrong was I! Reduced sales everywhere bar the UK, where it underperformed expectations. Distribution issues and rising distribution costs were expected but the increase in returns worries me. I now have less confidence in their business model and can’t see it picking up in the short term. If they start to deal with these issues, then I might buy back but for me risks for the foreseeable future are significant. Hence cut my losses and bank some value.

I, like many others, hold Breedon for IHT purposes, so would sell if it moved to the FTSE 250.

Looks like they’re being grabbed at exactly the right time before post Covid results pick up. An absolute steal.

This is a perfectly valid thread and highlights the challenges for a company like Arena. However since this last comment, the pressure for returning to work has increased and this should lead to a psychological willingness to return to events in person. That said the real prospect of inflation should impact Arena's cost base and the disposable incomes of many of its customers, particularly the younger generation. All in all though I would expect an increase in demand over the next twelve months.
Given that Arena seems to be capable of operating at a positive gross profit level, the question mark must be about the cost and sustainability of its debt position but I would expect banks to be willing to keep lending unless there is a serious global recession.
The share price has recently continued to fall but sales volumes have been low and I wouldn't read too much into this. As said earlier I would hope for a strong pick up in its next reported results, though with some questions about medium term economic risks.

Personally I would be pretty fed up if Breeding moved to the FTSE250 as this would have a significant hit on my Death Duty planning. I would immediately sell.

That may mean the company is near rock bottom but another way of looking at it is, if it can survive the short term and not be bought by a private equity co, then there is great upside potential once Covid restrictions are further relaxed. I don’t expect much movement until reported results are available.

There has been a lot of short term peaking and troughing on this share over the past six months and at times some large transactions. I’m not sure whether some large positions are being built and, if so, what they signify.
The current dip is still miles ahead of where the shares were a year ago so, as a long term investment, I’m quite happy. Obviously there is potential for some short term trading too.

Thanks for your comment, jolly speculator. It looks like other people may have thought the same.

I wonder why you think it's too expensive. PE is currently about 18 and it recently got into the low 20s. While 2020 will have been difficult, revenues and earnings were on a strong upward trajectory and the prospects for building materials suppliers should be good post Brexit. Against that, European supplier costs will be cheaper thanks to a strong pound but the effect of that is not huge.

I think you're right. Small retail purchases seem to drive significant price changes in this company.
However I'm holding rather than topping up. Scapa have now had three negative news items in the last few months and still have a high PE of 36. The next announcement had better be positive.