Member Info for strictlybricks

“If I understand your calculation of 43.3p based on 10 years of 'capital appreciation' (my wording) then I believe the expenditure on those intangibles and goodwill over the period shouldn't be excluded. We could assume that the expenditure is adding to asset appreciation today.

Bottom line, if Taylor Wimpey's determination of dividend was applied to Vistry's 2025 interim results (IMO) the dividend yield would approximate to:

(7.5%*635p)/575p = 8.3%”

………………..

Londoner,

If you give value acknowledgement to intangibles for a house builder, yes, if they’ve spent money on these during the period then that would increase the profit…

However, when it comes to house builders, it’s hardly like they’ve bought the rights to the Coca Cola brand, or anything….

Any goodwill is just an adjusting figure, to make the balance sheet balance…

Take Barratt Redrow, for example….

They’ve been carrying £800m or so of goodwill ever since they bought Wilson Bowden back in 2006 ~ none of that was previously on Wilson Bowden’s balance sheet.

It’s just the gap between the book value of Wilson Bowden and what was paid for it ~ the houses didn’t suddenly start becoming better built just because Barratt now owned the company.

Companies could be selling each other businesses all day long, and using borrowings to fund it based on artificially inflated balance sheets due to the gap between tangible and intangible assets….

As I recall, that’s what took the Japanese stock market up to ridiculous P/E ratios back in the ‘80’s ~ until the market finally decided it was like the Monty Python block of flats built by hypnosis (if you’re old enough to remember that?).

I mean, it stayed up as long as you believed in it..!

Until it didn’t, of course..😊

So, anyway, I’m at risk of going off on one here…

But every transaction in requires a buyer AND a seller in order to happen ~ and that’s what makes the Ouija board that is the market…

Vistry, aka Bovis, is a company that I have invested in at times in the murky distant past ~ back before I tended to dive so deeply into the numbers…

But, honestly, it’s not just since Greg joined the business that they’ve better at talking the game than playing the game….

I’ve got the vital statistics on Bellway & Bovis going right back to 1998 when Bovis was first listed on the stock market.

That year, as it conveniently happened, Bellway’s tangible BVPS was 183p and Bovis’s was 185p.

Pretty much the same then…

Scroll forward to 2024, with Bellway making an average ROE of 15.7% compared to Bovis’s 9.9%, and you end up with Bellway’s BVPS now 2,904p and Bovis’s at 616p.

On top of this, Bellway paid out 1,282p in dividends compared to Bovis paying 616p.

And yet there were significant periods during that time span when you’d have to pay a higher PBV for Bellway than for Bovis…

And, before you or an

“If VTY applied the same dividend policy as TW. they would pay a similar dividend yield.

VTY net tangible asset value £2,364m, or £2,364/£323m = £7.32 / share.

Yield = (7.5%*£7.32)/£5.75 = 9.5%.

If anyone sees it differently, please correct.”

……………………….

Londoner,

My take on it is this (& I put my hand straight away to say that I an absolutely NOT a fan of Vistry!)

Working off the 2024 figures, I've got:

£3,235.9m equity less £1,196.4m intangibles = £2,039.5m tangible equity.

Divided by 331.843m shares in issue gives BVPS rounded to 615p (my calculation in an earlier comment used the incorrect number of shares in issue ~ I was in a rush to get out this morning..!)

Ten years prior, the BVPS, calculated the same way, was 655p.

Ten years dividends paid from 2014 to 2024 = 474p, less the 40p reduction in book value = reality check total earnings for the decade of 434p per share...

Divided by 10 = 43.4p a year average.

Which equals an average return on equity per year of 6.6% over ten years ~ hopefully a long enough period, even by Vistry’s standards, to get a fairly reasonable picture..?

So, by my calculation, that's 43.3p a year div payable to stand still for ten years.

Half time whistle 2025 £3,247.0m less £1,176.6m intangibles & goodwill = £2,071.2m dividend by shares in issue 326.109m = 635p BVPS

From here, 43.3p minimum EPS to sustain div = 6.8% on book value compares against 7.5% of book value paid in div for Taylor Wimps.

Because Wimps’ PBV is 0.8, their yield is 9.1%

To obtain a 9.1% yield as above for Vistry requires a PBV of 0.75 by my calculation.

On a BVPS of 635p, this would mean a share price of 476p as against the 585p it currently stands at…

So, good luck with all that, Vistry aficionados ~ but rather you than me…

Though I’m not anticipating many, if any, of you here agreeing with me on this..? ☹

Strictly

Vistry book value per share December 2014 (yes, that IS 2014, not 2024, it's not a typo) = 655p

Vistry book value per share June 2025 is = 585p (£3,247.8m less intangibles £1,176.6m = £2,071.2m divided by 3,541.347m shares in issue = 585p.... 2014 calculated the same way...).

So, book value per share has gone backwards by 70p in ten and a half years....!

You have to hand it to Greg... he's certainly very good at talking the talk....

Walking the walk, well, that's maybe another thing...?

Personally, I got caught out buying into Telford Homes' "Capital light" partnerships plan to infinity & beyond and a part of that was that I was impressed with the MD there at the time ~ sufficient so to deflect me slightly from my usual MO which is the numbers, the whole numbers, and nothing but the numbers...

But once bitten, twice shy, and all that ~ and now it's nowt but the numbers for me...! 😊

Strictly

“Something that I have noticed for a little while is that the dividend yield on PHNX and LGEN have been drifting apart for some time now and I cannot fully account for what is now a 100bp difference. I have therefore been taking the opportunity to switch investments from PHNX to LGEN to get this dividend uplift but can anyone suggest why there is such a large difference?”

………..

Couer,

I reckon that you are describing here how I invest…?

But it does rely on firstly taking the view that one will ascribe the value for oneself of a share and not delegate that task to the market…

And secondly, not being fazed when the market does something one don’t understand the reason for…?

If one can do that, barring meltdowns and any serious underlying issues, one can look to let go of being overly concerned about what the share prices are doing…?

It’s just the market ~ I mean, LGEN’s up 9.8% for the year including divs, MNG’s up 42.0% and PHNX’s up 39.0%…

Have the relative values REALLY changed by that much ~ or is it just the market doing its own thing for its own, mysterious, Ouija board-like, reasons..?

If you decide for yourself that it’s the latter, that opens up the opportunity ~ for anyone happy to remain constantly invested, albeit moving between different shares ~ for additional gains by continually pursuing best perceived value…

Just like water finding its way downhill…

If one makes a share price comparison graph on the Stock Exchange’s graphing tool for LGEN, PHNX and MNG from, say, May 2021 to date as that period works for the point I want to make, one should be able to see that the three prices flutter around each other like butterflies…?

And, if you’re in it to build dividend income for the long term ~ as you’ve implied and as I am ~ you’re obviously better off if share prices remain low…

Firstly, because you then pay less stamp duty on trades and, secondly, for when the companies concerned are doing share buybacks at good prices ~ because, as a shareholder, that’s obtaining better value on your behalf…

I am relatively the new kid on the block here when it comes to the insurance boys as I’ve only been in this sector since early last year….

But with three companies all in the same ballpark and very much on the same song sheet in terms of dividend intentions, I’m hoping this is going to prove to be a more straightforward game than trying to call relative value for the different house builders ~ which had been my game for the twenty or so years previously…

Strictly

Divi and Casa,

To add a few numbers to this, I just checked back on past total voting rights numbers...

Shares in issue as at 1/9/25 were 5,706.036m shares

Whereas

Shares in issue peaked on 1/6/24 at 5,979.776m shares

So, that's a reduction of 4.6% of the share capital....

This benefit of reduction in shares in issue tends to be slightly watered down, though not significantly so, over a medium term period, by shares issued for, I imagine, internal incentives...?

Ten years before the peak, i.e. back in June 2914, there were 5,917.933m in issue.

So, the increase over ten years was 1.0%

Or averaged at 0.1% a year.

So, I felt it was worth the trawl back for that, to reassure myself that it wasn't a significant increase...

To make this more relevant to the general conversation here, though, I would say that regardless of what Mr Market thinks about LGEN in any minute in any day, the underlying performance is that of now only having to divide the company's profits between nearly 5% less shares than were in issue just over a year ago ~ and if the company is increasing profits on top of that, it would seem to comfortably support the intended 2% a year increase in dividends along with further share buybacks...

One could of course go into the in's and out's of a duck's a.se about this ~ something I very much used to do with the house builders when I was invested in that sector until early last year but which I do not consider I have the skilsl to do confidently in respect of the insurance boys ~ hence here I tend to leave that largely to others and take notes accordingly...! 😊

Strictly

"Yes more luck than judgement been in and out of Taylor Wimpey but effectively treading water"

.........................

Sain,

Well, if you trod water investment-wise through 2022 then well done to you Sir...!

Strictly

Sain,

Without getting too much into this here, did you manage to swerve the down wave of 2022 then...?

I dropped 37% that year ~ my worse year percentage-wise sine the credit crunch, and my worse year ever in terms of cash amount down....

Took me the next two years to make back the ground again ~ so that was three years in all of Incy Wincy Spider time, though 2025 has been a good year so far (well up to the end of last week, at any rate.. ☹ )

Strictly

Sain,

Firstly, hello ~ haven't noticed you commenting here for a while ~ though you may be orbiting around on other sector share chats..? 😊

And don't know if you still read the SB blog, as I’ve written about all this rather copiously there...?

But, anyway, your comment here sparked me to update the relevant figures (as you may recall, in my view, there’s better than a good number to make a point…).

If I’d held just Bellway (my benchmark house builder, aka Ghostdog) since the start of 2024 until now then, with dividends reinvested on the day, £1,000 invested then would be just £928 as of now….

Whereas, £1,000 invested following precisely the game of SB would be £1,575 as of just now…

So, yes, I’ve fortunately dodged a bullet there, I reckon…?

A pretty big bullet, in fact, as things stand…

I have had a few goes at opening up a conversation in several of the LSE builder & insurance boy share chats about all this from time to time but, of course, those remaining invested in this sector hardly want to hear from the Grim Reaper ~ in this context, I mean me..!

And, as you probably remember, I was just about the biggest fan of house builders going…

But I fear that, insofar as being a sector whose superb underlying performance remained largely unrecognised by the market for decades because it was seemingly disguised by the volatility (this sector was never for the faint-hearted), those glory days may well now be gone…?

And I mean gone ~ for good, perhaps..?

How many people here, let alone on the street, acknowledge that, after inflation, overall house prices have gone nowhere for 22 years..?

Yet they’re STILL too high for many wannabe buyers, but the builders STILL now aren’t making decent money on the prices as they are now, let alone if they become cheaper in real terms ~ and then piling on top of all that the changes that the lunatics now in charge of the asylum, sorry I mean the government, want to implement…

So, my fear is, to put it in technical terms, the sector may well be f.cked for the foreseeable…?

And I’m keeping well clear and likely sticking with the insurance boys now as things stand..?

Anyway, good to hear from you, Sain ~ chat to you further on the blog if you like…?

Strictly

"Strictly, yes, that’s where I’ve taken them from. They’re not on LSE’s site anywhere which is a bit annoying, although as Corry says, it might be level 2? "

......................

Crossley,

Well, I'm not paying anything for access to LSE and I can open the "Live RSN" link no problem...?

Strictly

"Nowhere on LSE can I find any info on shares in issue? Only MCap and SP to use for calcs? Anyway, good night"

............................

Crossley,

Do you not take the figures from the RNS releases, which are here on LSE...?

Strictly

As below:

.................................

1 July 2025

Taylor Wimpey plc

Total Voting Rights and Capital

In accordance with Disclosure Guidance and Transparency Rule 5.6.1, Taylor Wimpey plc (the "Company") announces that its issued share capital consists of 3,556,985,103 ordinary shares of 1 pence, with each share carrying the right to one vote.

The Company holds 15,641,651 shares in Treasury.

Therefore, the total number of voting rights in the Company is 3,541,343,452. This figure (3,541,343,452) may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, shares of the Company under the FCA's Disclosure and Transparency Rules.

Fog,

A couple of numbers to conjure with....

These from the Nationwide's freely available published stats....

The first is £278,570.

That is what the average UK house cost in inflation-adjusted terms in Q2 2003.

Scroll forward to Q2 2025, and that number becomes £272,751.

In other words, for the past twenty two years, in inflation-adjusted terms, house prices have gone (slightly) backwards....

I wonder how many people know that...?

There's nothing like a good number, or two, is there...? 😊

Strictly

Poker,

I can accept that they may have more land than they need (I don't know about that so don't have a view on it..?) but, ultimately, dividends have to be paid from profit so in the long term they need to be making at least 7.5% ROE just to stand still...

And, if they don't ~ and who can say about that in the current economic climate? ~ then at some point they'll no doubt be pushed to change the dividend policy....

So, I'm not really disagreeing with what you are saying but I am still asserting that they are hostages to fortune in this respect....

And that's my concern and is why I'm not currently holding Taylor Wimps' shares ~ though I have done so in the past and may well again in the future....?

Strictly

"Can someone please stop me buying 😜 "

………………….

Aspers,

The difficulty you are facing, I would say, is that Taylor Wimps have made themselves hostages to fortune.

They have recently ~ and probably somewhat unwisely ~ set a dividend policy based not on profit but on book value.

7.5% of book value…. which is almost certainly well more than they are likely to make this year seeing as they made, by my reckoning, a 2.23p a share loss for the first half….

Forecast ROE for 2026 is 8.6% so, if, and only if, nothing goes wrong then they could scrape through….?

But why would investors reasonably assume that they will come through with their 2026 bottom line unscathed when you think of the year they’ve already had thus far for 2025….?

I am not looking to give advice here, but I was solely invested in house builder shares for more than twenty years and if I thought the current dividend policy was safe then, bl..dy hell, at a yield of 9% I would no doubt be looking at holding some of their shares….

But as I implied above, in my view, there is every chance that Taylor Wimps will have to rebase the dividend policy in some way and, if that happens, the market is surely likely to punish them quite heavily….?

As that’s what it usually does…

And if that happens, well, the perceived value on the other side of that event might well be worth considering…?

Of course, the scribblers may be wrong and Taylor Wimps go on to well outperform market expectations ~ in which case, happy days no doubt for existing investors….

And then I might regret not holding any…?

But not to the same extent of if I’d been tempted in and my fears subsequently then proved to be correct…

Strictly

Sparks,

Labour talk a good game of course ~ there seems to be nothing they like better than to ejaculate into each other’s earholes ~ but a couple of things to bear in mind...

Firstly, our Ange is talking about committed build out rates once planning consent has been given…

Don’t they learn from history…?

That’s what the house building sector got away from following the credit crunch, to get themselves safe…

As we know, they now effectively build to order, and take proper deposits with signed contracts…

Whereas, a build out rate independent of sales rate would surely be a regression back into a riskier business model…?

And a little while back ~ though to be fair I haven’t come across it again elsewhere ~ I read (I think in the Telegraph online?) that Labour were considering going for net zero on new builds and that that had been tried and has been seen to be failing in France…?

Given the state of the economy and the shift of priorities to some extent in younger generations when it comes to what they’re prepared to give up in order to be able to buy a home, I don’t see how the level of house building for private ownership can increase dramatically without throwing more subsidy at it in some way…?

Or we increasingly become more of a nation of renters….

Plenty of WEF conspiracy stuff around all that…!

So, there’s a few rabbit holes I’m not intending to dive down, and the short story is that my intention is to keep out of the way of house builder shares until and unless that not only is there more clarity but also that there is more good news within it than seems likely to me at the moment…?

It has been a big deal for me personally, letting go of house builder shares early last year…

If I’d stayed in Bellway & co, I’d have still been now more or less the same in terms of gain where I was then, but shifting to the insurance boys in early 2024 has given me around an overall 70% gain over that time….

So, I’m a very happy bunny with that..!

Strictly

Sparks,

I would agree that the trading update reads well….

However, the issue remains that although Bellway are clearly making progress, and in their typically low key, no drama manner (not for nothing do they have the nickname “Ghost Dog” amongst our investing circle…), they are coming back from a very low baseline…

For 2025, their return on equity by my reckoning was only 5.0%, i.e. around just a third of their long term average…

So the problem for me ~ and I am someone who cherished Bellway as a mainstay (THE mainstay, in fact) of my investment strategy for the best part of twenty years ~ is that if you take the scribblers’ figures as valid then Bellway are in a long term process of recovery to get back to anywhere near their former pomp.

The scribblers’ forecast ROE for 2027 is still only 7.4%, i.e. half of Bellway’s long term average ~ and that’s before we’ve seen the full potential of the Labour government to lay further waste to the sector with their meddling and so there may be more to come on that in forecasts to be seen later this year and beyond…?

I still live in hope for the long term for Bellway, but I’m watching them closely from the outside rather than currently holding any of their shares…

Strictly

"There was plenty of chat over the weekend about this…"

.........................

Crossley,

I was surprised your comment upset anyone here ~ given that you've only been laying out some numbers along with an interpretation of them but, there you go, it takes all sorts I reckon...?

It would be unfortunate if the chat here degenerated and became unduly toxic ~ surely different views are to be welcomed as long as they are polite, respectful and, hopefully, good humoured even...?

As I've said here before, I am happy to take the scribblers' forecasts for future earnings ~ after all, who am I to second-guess them as it is they not me who are crawling all over the companies concerned like a rash with their slide rules ~ but it is then very simple and straight forward to convert their EPS figures into ROE figures and P/E ratios.

And the scribblers imply that Taylor Wimps, at the current price, are in double digit P/E’s for the next couple of years and, generally across house builders over the years, that ain’t cheap…

Of course, this no doubt includes building in some degree of hope for the future, going beyond what the scribblers have offered us, and I guess therein lies a fork in the road opening up for investors…?

But, anyway, I for one do hope that the discussion here continues to be civilised for the overwhelming part…

Otherwise I think there’s a risk that there will be some folk with something valid and useful to offer by way of comment who simply won’t bother…?

Strictly

Tophat,

I'm not seeking to unduly press home a point ~ honest, guv ~ but I did omit to include a most salient point in my previous comment...

Call it a senior moment ~ I do have a few of those...

Which is that, in respect of my point about "hubris, exuberance & overconfidence", two of the household name companies, Barratt & Taylor Wimps, did put themselves into a crisis of existential proportions due to the credit crunch....

Of these, Taylor Wimps was the worse of the two by a country mile ~ and I'm sad enough to have some relevant numbers on that in a couple of old spreadsheets...

Barratt's BVPS in 2008 was 567p and by the time the dust had settled in 2011 after their rights issue (and I can't remember the dates of the respective rights issues for Barratt & Wimps, but I do seem to recall that they weren't at the same time...?), their BVPS was 188p.

So, it was then only 33% of what it had been previously....

Whereas, Taylor Wimps' BVPS was 352p in 2008 and in 2009 it was 47p.

So it was then only 13% of what it had been previously....

And the outcome is echoed in the share price ~ Taylor Wimps' price now is still only a third of what it was twenty years ago..... they surely must have one or two mightily patient investors...?

I do appreciate that this is all rear view mirror stuff, but it is very much the clear rear view mirror that I use to invest, rather than the very murky windscreen, and that does not always go down so well in some quarters here ~ but, ho hum, each to their own, and all that...

As you say, and I am in agreement, investment is a very personal decision...

Anyway, Tophat, I wish you good fortune with whatever method suits you best going forwards...

Strictly

Tophat,

Thanks for your comment and I do understand about smoothed dividends policies ~ having been investing in house builder shares for pretty much all of this century so far....

For example, Bellway ~ arguably the most prudent company of the house builders ~ had a smoothed, progressive dividend policy from 1983 right through to 2007.

However, being the very prudent company that they are, they quickly called time on it in the face of the credit crunch...

What I am implying here is that Taylor Wimps, given the harsh reality of their numbers both recent past and scribbler-predicted near future, seem to NOT being prudent here...?

So, each to their own as far as where they invest, and all that fine stuff, but I've been around in this sector for enough time to have witnessed hubris, exuberance & overconfidence on a number of occasions and, whether or not it proves to be the case that Taylor Wimps can go forward into the future with this current dividend policy remaining intact remains to be seen...?

My point is not about prediction, but about prudence....

And not of the Gordon Brown style...

Strictly

"The dividend is sustainable , maybe shavings off it. "

........................

Abject,

My point is that Taylor Wimps made an ROE of 8.4% in 2023, 3.2% in 2024 and negative (1.4%) for the first half of 2025...

Until and unless they can really turn that around and get above 7.5% a year net of tax ~ and we've got up to another 4 years of a Labour government to go yet ~ then they will continue to eat themselves, as they are currently, if they continue to doggedly pay out 7.5% of book value.

That's basic maths...

They seem to me to be taking the div payouts above & beyond a "smoothed" dividend policy...?

Ceteris paribus, if they come through however long these difficult times last with less & less book value per share, which I guess means running down their land bank and WIP to some extent, they surely are then in a lesser position (however sound their balance sheet remains through, hopefully, good management) to take full advantage of an upturn in due course...?

Of course, if the PBV dropped to about 0.5, and if they are continuing to pay 7.5% of book a year , then that's a 15% yield ~ and I reckon that I'd have probably got in before then...!

But if the price gets to and hovers around book, gradually getting your own money back and paying dividend tax on that doesn't appeal much to me in the light of other big div payers in the FTSE100 on similar yields but with long term track records of increasing the payments sustainably year after year...

As ever, I'm just giving my perspective and why I'm currently not in Taylor Wimps...

But that's not to say they won't become interesting at some point ~ just not at the current PBV for me...

Deciding when to go in, well, that's a tricky question ~ and I don't have that sussed as things stand...?

Strictly

Taylor Wimps' b/f BVPS at end December last year was 124.39p

Reduce this by the "reality check" loss they made for the six months just gone of 2.23p and the dividend paid in the quarter of 4.66p, and you get to the end of June 2025 BVPS of 117.5p

They've declared an h1 div payount of 4.67p to be paid in the second half of this year...

Before making any profit ~ and remember they've made a loss for the first half albeit due to yet more cladding issues uncovered ~ this would take their BVPS down to 112.83p.

Wimps made a poor return on equity of 8.2% in 2023 and a miserable return on equity in 2024 of just 3.2%.

In the current world of Ange ~ after all, she's the girl in the government in charge of housing policy ~ they will surely be heroes if they make much this year...?

So, my question is, how realistic & sustainable is the shiny new 7.5% of book value a year dividend policy...?

Otherwise, they may go into denial and continue to eat themselves....?

I have been an investor in Wimps from time to time, but this gives me current cause to avoid...

Of course, DYOR and all that fine stuff, I'm just sharing a view on it

Strictly