RE: Telford new book value weighting2 Mar 2019 11:15
Way too much doom and gloom from some participants here.Strictly's investment system involves constant monitoring of the relevant attributes of a handful of homebuilders( mostly houses not flats) and regularly moving funds between them and he appears to make that work.For those who prefer buy and hold,through thick of thin,the recent RNS was very disappointing but not suffiently bad to warrant selling up.TEF are different from the others that Strictly holds because the only build flats and only in London.The recent RNS informed us that the London market is difficult,we all know that and that the market is cyclical,so price reductions to get units sold are indeed profits gone forever.Another problem is progress delays to production caused by others,this is profit delayed,not gone.The company has notified us numerous times of its intention of making IPRS work a growing % of total output,but obviously when strength returns to the private sale market,they will review this.The BOD have taken measures to address risk from day one.It does take longer for them to react to change because flats can take 3 years from inception to completion whereas houses can take a year or so.London is a fantastic place to live work and play and that is not going to change.Current market dullness in London will spread elsewhere,the provinces have no qualities that make them exempt from that.To knock off about £50m from the value of TEF because of the RNS is ridiculous and way beyond the impairment to the revised earnings expectations.The imminent announcement of a long term IPRS investor partner will be the first step in resumption of EPS growth in a couple of years time.The company has been knocked in the short term but the BOD will stand up,dust themselves down and carry on with their task of improving shareholder returns.
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