Member Info for SFH300

Yes, I have a question ...

Why should we believe Darren any more?

I'm now more than 45% down on PALM and see no upside. Every announcement or interview leaves me feeling my gaze is being directed to a message painted on the side of a bus, that I'm being being sold a Brexit by a Boris Johnson.

That represents an increase of about 10% on the underlying operating profits expected by analysts for the financial year just passed. The division's also recently added glass reinforced concrete business to its portfolio, as well as a fireproof cladding company, further progress in building out the sustainability strategy. But if trading deteriorates significantly, continued investment could put the group in a precarious position.

The strong property market of recent years has begun to retreat, and we're already seeing signs of falling construction activity, particularly in the new build market. However, it's worth noting that house prices don't necessarily impact Ibstock.

The group gets paid as long as houses are being built and refurbished, so a modest cooling would do little harm. But with interest rates reaching their highest levels since the 2008 financial crisis, we have concerns that a correction could be more significant. This has yet to impact Ibstock's profits, but we are seeing some indicators of a slowdown in the wider construction market.

Management's spent much of the last year shoring up the balance sheet putting the group in a much stronger position, which allowed for a now completed buyback programme. But demands on cash are not insignificant between rising investment and dividend payments.
Dividends have historically been well-covered by free cash flow, but it's something to keep an eye on moving forward. However, the recent guidance upgrade gives us some comfort that the prospective yield approaching 5% is achievable, albeit it can never be guaranteed.
Ibstock's valuation is below the long-term average, suggesting the market isn't overly excited. We think the valuation doesn't price much in for future growth prospects, but see increasing potential for shock that could negatively impact sentiment in the short term.

Ibstock key facts

Forward price/earnings ratio: 11.3
Ten year average forward price/earnings ratio: 12.4
Prospective dividend yield (next 12 months): 4.7%

All ratios are sourced from Refinitiv. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn't be looked at on their own - it's important to understand the big picture.

From Hargreaves Lansdow:

Ibstock - 2022 ahead of expectations
Derren Nathan | 18 January 2023
No recommendation

No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

As expected by management, Ibstock saw volumes tail off in the fourth quarter due to reduced activity amongst its client base in the construction sector. Nonetheless, it described performance in the quarter as resilient, driven by a continued focus on price and margin management and good operational execution.
Ibstock now expects a 25% increase in 2022 revenues to about £510m, with cash profits (EBITDA) modestly ahead of management's prior expectations. Cash generation is also better than expected, with net debt at the year-end of about £46m.
Ibstock is continuing to invest in its Futures division which focuses on the shift to sustainability and industrialisation in the construction industry.
In 2023 Ibstock cautioned that higher interest rates, inflation and heightened market uncertainty are likely to impact demand for its products. However, it remains confident in its medium-term financial targets.

The shares were broadly flat in early trading.

Our View [HL]

Even against a deteriorating outlook for housebuilders, Ibstock has been doing better than expected. Input cost inflation has been mostly offset by price increases, and the group's been able to capitalise on strong post-pandemic demand. But things are now getting tougher. That said, two upgrades in as many trading updates is no mean feat in the current environment.

Focus has shifted to growth rather than survival and management is using it's more efficient operations to pay for modernisation of two of its factories. That will increase capacity and allow the group to take advantage of growth opportunities as they arise.
There's also a push to become a leader in more sustainable housebuilding with the advent of a new division-Ibstock Futures. The first order of business for this new arm is brick slips, a type of lightweight brick facade. The group is spending £50m over the next few years to build the UK's first brick slip factory, a venture that's expected to return roughly £10m per year when all's said and done.

1/2

Ignore the "They have" < rolls eyes >

No. They have 3.6% of SMT is in northvolt.

https://www.scottishmortgage.com/en/uk/professional-investors/holdings

Honestly, VP, no one is listening to you any more. Bye now.

I'll qualify my comments first by saying that my mind isn't greater than anyone's ;-)

But I will not be surprised to see a relatively quick resolution to the Russian-Ukraine war as the West begins to supply more and more of its superior weaponry to Ukraine (Challenger 2 and Leopard tanks, HIMARs, Norwegian winter warcraft training, etc. This would be a huge weight off the world's economic shoulders, which would then allow minds to turn to more conventional economic issues rather than be burdened with thoughts of survival, continuity of supply, etc. In addition, the US and Japan are actively merging their militaries as a counter to Chinese expansionism in Taiwan, etc. Hopefully this will have a stabilising effect on the Far East economy.

For me the name is definitely not working. It tried to capitalise on a text-speak trend that was never going to take over from sanctioned orthography. It now dates the company and not in a good way. It's only a matter of time before either the original name is reinstated or something more pronouncable replaces the current letter group, which leaves one wondering if it's a series of initials or a direct translation from Hebrew.*

*Hebrew has no discrete letters corresponding to English vowels.

" ... looking at 10 % dividend and 50% price rise in 12 months"

Why?

https://ocadogroup.com/investors/financial-calendar/

VP: "My research led me to sell out for various reasons in April."

Absolutely nothing wrong with that, of course, and I offer no judgement for you doing so.

On 18th May, however, you wrote: "Personally I sold my Ocado holding in early May."

And on 25 April you had written: "The automation and online grocery trend will not end. Ocado is in prime position to grow further." This was your last comment before falling silent. Very positive and very assertive.

And yet, by your own admission, no more than about a week later you sold your entire OCDO holding. But after months of almost daily singing the praises of OCDO and being a genuinely positive voice for its opportunities, you went silent for two weeks AFTER selling. Even Hedged started a thread asking "Where is this guy [Valueplay]? He's very very quiet these days" on the 18th May. It was only in response to this that you announced you'd dropped OCDO two weeks before.

So, you see, the issue is not so much what you do with your money or the strategies you use or the conclusions you arrive at from your own research, which always appears to be very thorough and knowledgeable. It's that you've shown yourself to be an unreliable commentator whose opinions and conclusions, on the basis of what we read here at least, are reactionary and therefore of little value.

Thank you. Bye now.

Yep, BBB acquires the satellite operations of Harbour ISP for c.£3m and this "creation of 'significant' shareholder value" has everyone racing to snap up BBB shares ...

What a lovely dream ... Ok, I'm awake now ...

Ah. I see that anyone who's moved by this news is actually cashing out rather than expressing their confidence and jumping in. No buys whatsoever.

Laughable.

"John Lewis and Abrdn can’t afford to let their housing partnership fail"

https://stocks.apple.com/Akud1XfBJRsmqR35OrwipWA

“…I wouldn’t have a single property in the portfolio that didn’t have the potential to have a commercially producing mine."

Well, duh! Compare and contrast:

"I like to go out and buy properties that have little to no potential to have a commercially producing mine."

Lions, donkeys, etc.

"Avoid" (The Times)

https://stocks.apple.com/AJqyoR6qPRr6xAYAW9dGuKA

Interesting to see you now coming around to my way of thinking, Pete. Note also that the British government is now investing in Musk's Starlink to provide internet services to hard-to-reach areas of the UK. Supposedly "leaders in the field," but BBB has missed out again. Not to mention that Simply Wall St reported yesterday that breakeven for BBB has been pushed back to 2023. As you say, the silence is deafening.

I have a theory, looking forward to seeing what responses I get to my previous post.

Ergo, stay shtum.

Quite, Bubbles. Simply Wall St is one of the worst.

Post-Brexit Britain is basically seen as an emerging market. The books never covered the eventuality that the UK might become one because no one then believed it would ever do anything so stupid to put itself in that position.