Member Info for WiganWarriors

Well, when you invest in Builders unfortunately you are always likely to run the risk of cheap shots by Politicians looking for headlines. Goes with the territory I’m afraid, and I’m sure this latest outburst will blow over in a day or two. The usual summer lull looks to be set for an extended period of volatility pending resolution of numerous ongoing macro events. Hard to see why any real money will get committed to the sector in the short term. Maybe PE will pop up and save the day.

Not sure why you say there is real selling pressure today, volumes not much different from normal. Also, whilst I agree that the macro environment is worrying there are many fund managers who take a longer view of the Market and are accumulating Wimps for steady income. IMHO, the volatility (on step forward and two back) is due to the fact that Wimps has lots of small traders trying to time the Market, which is cannon fodder for the professional traders and Algo’s. They will happily set of the Algo’s off to out trade the amateur traders, and you can guess who is winning that game. Just need to wait for something to trigger a change in sentiment, like positive news re you know what.

Well, given the current poor sentiment and media negatively re the building sector, I would not be surprised if private equity took a close look at some of the builders. IMHO, taking Wimps private would be a decent play and provide the opportunity to generate significant gains for private equity, prior to re floating four or five years down stream. Looking at the Chairman’s background, I’m not sure he has the experience to take this forward. However, maybe an activist investor might agitate to to go private. Time will tell.

Just an observation. There are some on this B.B. who remind us that you have not lost anything until you actually sell. You will find that all investments run by professionals and experienced amateurs are “marked to market” each day, as do all banks re their capital ratios. I would suggest that this approach is the best way to avoid “kidding” oneself, and accept that if a trade is not going quite as planned then you still have the clarity of mind to review and act accordingly. Otherwise it is too easy to get “locked in” and watch your assets drain away.

Yeah, be interesting to see how the Market reacts to a rise. Personally I would take it as good news, and the Market should rally. I fear that if BoE hold off again the Market will react badly. We will need to see if this is the plan for the doomsayers (and bots). Either way, next six months will be lively. For those who worry about short term fluctuations best to look through the volatility and in the short term focus on cash flow with eventual capital gain; maybe 12-18 months down the line. As usual IMHO.

Divi. Non of my business of course, but I would suggest selling TW now for a big loss and buying Centrica wouldn’t be a good plan. Centrica in deep trouble haemorrhaging customers at a record rate this year. Once sentiment recovers for builders Wimps will recover, but Centrica fall only just starting.

If you really want to set a light under the SP ... given the current impasse re Brexit then declare “ force majeure” and hold another referendum ... any thoughts

Profit up in accounting terms. Last year comparable period had £130M exceptional booked. So profit flat.

Well, not really negative but they are flat. ASP lower than build cost inflation, more affordable homes (lower profit), the usual Wimps surprise of another exceptional. However, let’s see what gets said. Personally, I would like to get reassurance re Central London. We all know the rest of the country doing as corroborated by peers.

BTW, I wouldn’t pay too much attention to buy / sell info from these free web sites as many trades are made with deferred disclosure attributes. These show up after the final auction.

Well, I thought we might drop today given the poor press over the weekend (FT), with some specifically targeted at Wimps. Also, many buyers will hang fire until confirmation of trading, forward sales and leasehold updates are discussed tomorrow. IMHO, no point looking at the SP every 10 mins. Better to spend time thoroughly researching the sector and specific plays, and if you still want to jump aboard then you are more relaxed pending the eventual outcome of your trade. Personally, I believe that Wimps is a good trade over next year or two. We will still get negative sector headlines which will unsettled the SP, but things will move on in time.

Well, IMHO, we need to get through the you know what debacle and see how the land lies. Major investors are likely holding fire and the sector is left to the “Hedgies” to amuse themselves. In or out, I would expect a revaluation and new price discovery process to get underway later next year. I would also expect that Wimps SP would start to recover and eventually make new highs once normal valuation service resumes. In the meantime sit back and enjoy the cash flow. If you fill your boots now and take a five year view this will (IMHO) turn out to be a very good play.

They are likely trades executed during the day, with delayed publication.

Yeah, I have also added to my SB position. Quite happy with price. Unfortunately / fortunately Wimps has become a “traders stock” so many non sticky punters playing (including Hedgies), and when starts to fall on the back of newsflow shorters give it a shove and lots of hot money either gets stopped out or taken off the table. This just accentuates SP movement. Need to get through into autumn and see how the land lies re Brexit and interest rates. If you can see 12 months ahead probably a solid buy at these prices.

Notwithstanding current macro environment, the Market is likely waiting to see what Wimps have to say at interims. BDEV had no nasty surprises so can move on. Don’t forget Wimps does have a history of surprises, like the £130M leasehold write down last year and the CFO leaving this year with no real explanation. If all goes well, and Central London unit reports steady sales then we could see gradual recovery to a more acceptable SP. Altough in my option unlikely to reach the levels that other posters keep forecasting. UK shares and £ Heading for a bouncy ride over next 12 months I would suggest. Time to put on tin hats ...

Hi Nigel, I agree your “system” is not working, it keeps predicting SP north of £3 and if you are honest you would agree has been consistently wrong. As for supply / demand how does your view sit with Wimps Central London business. Do you know how many units currently available and what the average price per unit is, and how those units are selling. How do you reflect that in your model. Either way, my point is that the Market sets the SP.

Well, last six years Wimps eps rounded: 7.3, 8.5, 11.6, 15.1, 18.1, 20.2. As you would expect given where we are in the recovery from the crash they have increased. However, the cycle is reaching the top and if sales are flat then eps will be down as build cost inflation is 3/4%. So flat sales revenue means fall in earnings. Need to sell more and squeeze more margin just to stand still, and that may be difficult if economy paralysed for a while if we fall out of EU. We will have to wait and see, but there is enough poor sentiment out there to constrain any real SP rise in the sort term. I make this point to balance the seemingly excessive hope that we have some entitlement to an ever increasing SP regardless of the economic conditions.

Hi Nigel. You say that Builders SP can’t go any lower because Price / earnings ratio. It is just a ratio so if earnings fall then SP will fall whilst still maintaining same ratio as currently. If the Market slows significantly, and that may happen if we crash out of Europe, the SP could fall significantly. Just like it did in the financial crisis 10 years ago. Crashing out would have significant impact on buyer confidence. May not happen, but no one can forecast outcome at this stage. IMHO, major investors will be reticent about committing capital to UK businesses until the outcome is clearer. It’s hard to see what will drive the SP higher.

BDEV has just reported, and no surprises for the Market. Even reassured on Central London. Wimps still have to report, so Market likely just waiting to here what gives. Whilst overall business is probably assumed to be decent, specific numbers for SE and Cental London will be scrutinised. IMHO, macro environment may undermine any decent numbers and affect the outlook for all UK investment decisions, until you know what gets sorted on way or the other.

Wimps have committed to 2019 special dividend subject to shareholder approval. However, Wimps forward commitment is for shareholder distributions, which may be in the form of special dividends or share buybacks depending on management judgement at the appropriate time. Which of course will be influenced by the share price. So no guarantees that beyond 2019 that a special will be preferential to buybacks.