Berkeley Share Discussion Threads

[quepassa] 13/10/2016 09:17

raffles,

thank you for your stentorian reply.

I did listen but experience has taught me to form my own personal opinion and to read and listen carefully to the overall market and sector. As well as to read between the lines.

what any given company may or may not say is one thing, what any given investor may or may not draw from that and think are altogether different matters.

[garycook] 13/10/2016 09:08

BKG Up 3% the Market down.Buyer,s seeking value.

[eeza] 13/10/2016 09:08

It's what you would expect.


i.e - prices decline - sales go up.

[montyhedge] 13/10/2016 09:02

Sales up but prices decline in London. Is that good or bad?

[raffles the gentleman thug] 13/10/2016 09:00

quepassa ...re your post to me ... with resepct you have clearly failed to listen to a single word either the company or myself has been saying.

Indeed if you had you would have appreciated that both lower turnover and lower profits as a result of focussing on cheaper housing is EXACTLY what the company has been indicating and exactly what the market is expecting. Hence my comment yesterday that the the company has already guided to a 40% fall in forward sales, normalising at the £2bn market within two years. Correct me if I am wrong, but reading your own commentary it seems that is coming as something of a surprise to you.

Re the 'unsold' high end properties you are concerned about if these fail to sell it will not have any impact on expected turnover or profits in 2017 or 2018. My point about them slashing prices was not that I believed they would do this, but the fact that they could do this since their development margin is huge on these, even after absorbing stamp duty. But for the time being they don't need to as the market is trickling along - painfully slowly - but trickling along. And new build developers have the advantage over the secondary market in shifting property precisely because they are in a position to absorb the stamp.

[quepassa] 13/10/2016 08:55

Too true, you never received it because I didn't want to waste my time responding to someone of your ilk.

please note that i have zero interest in either you or your investments.

but happy to post a copy of your private message to me soliciting my opinion.

ALL IMO. DYOR.
QP

[garycook] 13/10/2016 08:51

QP,Never received your post on TALK.Not a problem holding 5,600 owning me 193.

[quepassa] 13/10/2016 08:32

Is that the one where you sent me a private message via advfn asking for my opinion on Talk?
Would you care for me to post a copy of it?
Take a hike.

ALL IMO. DYOR.
QP

[rcturner2] 13/10/2016 08:20

It's about 10% a year for 33 years. I'm impressed.

[quepassa] 13/10/2016 08:14

A certain poster who shall remain nameless has said that house prices are up again.

Only half of the story.

One presumes that this is based on the recent RICS report. - No-one can doubt the validity of RICS.

Whilst property is indeed moving up elsewhere, in London this is not the case, as succinctly encapsulated in today's online Telegraph :-

"However, that was not the case in London, where a majority of those surveyed said that prices there would fall, largely due to uncertainty following the referendum and the continuing impact of higher stamp duty levels.

It was a similar picture of the next 12 months: house prices are forecast to rise across England and Wales by 1.4pc, but they are expected to be flat in London.

Anecdotal evidence suggests that stamp duty is weighing particularly on higher priced markets. Anthony Webb of Trenchard Arlidge estate agents in Cobham, Surrey, said: "The market [for homes worth] over £1m is still quiet due to excessive stamp duty levels deterring buyers and influencing all price range activity.".


Herwith link to interesting and informative article




ALL IMO. DYOR.
QP


ps £25k to £550k in such a large time-span of 33 years is not particularly impressive performance - do not be rude to me.

[cancun tango] 13/10/2016 08:02

GaryIf you're referring to Halifax today : 'London "stood out as a regional underperformer" said the regional house price index by Halifax and researcher IHS Markit. The city's prices fell by 2.5%'http://www.ibtimes.co.uk/uk-house-prices-see-first-quarterly-fall-four-years-brexit-cools-market-1585939

[cancun tango] 13/10/2016 08:00

'House prices up again' - that's unattributed guff garycook

[garycook] 13/10/2016 07:55

QuePassa.You are pompus and very arrogant,and look down on other investors,like you are a Guru.I am old School as well aged 58,and invested for 33 years,and built my Portfolio from £25,000 to today worth £562,000.So give me some respect and I will mind my own business.I ask you again are you a shareholder in BKG ? By the way.What is it like having your own Premium thread on TALK,and talking to yourself Ha Ha Ha

[cancun tango] 13/10/2016 07:41

Raff, In between your business plans and conference calls, do you ever get the chance to take a look at BKG share price performance?

[quepassa] 13/10/2016 07:41

raffles.

call me "old school" but in my experience, it is frequently the inventories of unsold properties in a falling market which prove the Achilles' heel of any developer.

However, can you please clarify why, in your opinion:

1. Slashing high-end inventories of expensive London property by 30% would have no impact on either profitability or balance-sheet valuations, and

2. How refocusing on cheaper housing won't equally mean lower turnover and lower reported profits.

ALL IMO. DYOR.
QP


Cook. You were recently very impolite to me so mind your own business.

[garycook] 13/10/2016 07:17

House prices up again !!!

[raffles the gentleman thug] 13/10/2016 07:02

Quepassa .. I can think of far more important things to worry about than BKG's unsold high end property on which BKG could probably immediately slash the price by 30% or more if it so wished without necessitating write downs. It really is noise in the scheme of things, and if they remain unsold through to 2020 will have no implication on reported profits which should remain at an exceedingly high level.

[garycook] 13/10/2016 02:00

QuePassa,Are you a shareholder in BKG ?

[quepassa] 12/10/2016 21:13

The SDLT rates are extortionate. This has severely dampened the turnover of expensive properties and this may precipitate a reduction in due course in property tax.

But that seems unlikely to happen quickly.

Working through inventories of expensive properties in a falling market is not easy. This can take a lot of time.

The question is not perhaps so much of what they will be building in the future but what they have on their books right now.

ALL IMO. DYOR.
QP

[raffles the gentleman thug] 12/10/2016 20:23

They will get worked thru ... people are still buying in London you know.

But good chance given the precipitous drop in London housing starts, and todays ONS report on London population growth that the Government adopts a slightly more friendly approach to property taxation which is equitable for both sides, and which helps deliver London housing demand for the next decade - whilst also demonstrating Britain is open for business.

[quepassa] 12/10/2016 20:10

Be that as it may.

But what of the existing London inventories such as:

West End Gate
Westminster SW1
250 City Road
Vista Chelsea Bridge
One Tower Bridge
Goodmans Fields
Woodberry Down
Chiswick Gate
Barnes The Villas
South Quay Plaza
Lee Terrace Blackheath
Wimbledon Hill Park

and so on.


These all appear to have availability.

ALL IMO. DYOR.
QP

[raffles the gentleman thug] 12/10/2016 20:04

exactly and the chronic housing shortage in SE England will keep them busy for years.

Its just the gross margin on the future land bank will subside from £6.1bn to between £4bn to £5bn, and forward sales normalise around 40% lower than where they currently are to around £2bn.

But the flip side is the effective market capitalisation, ex guaranteed dividend flows, is only £1.9bn and they can comfortably generate and distribute free cash in excess of 10% of that for a long time to come ...

[essentialinvestor] 12/10/2016 19:33

The current strategy appears a shift closer to the BKG of old.
Started in my area Weybridge, they were primarily a Surrey builder in
the early days.
HQ is in Cobham.

[raffles the gentleman thug] 12/10/2016 19:23

without meaning to offend any particular poster I do thing most on this thread and distinctly ignorant of the BKG business model, since all I ever hear about is high end London exposure.

If anyone of you had actually participated in conference calls you would understand that this business is rapidly downsizing and totally de-emphasising Central London - to the extent its forward run rate of sales will shortly start to normalise down to around the £2bn level compared to the current £3.25bn level - i.e., an entirely voluntary 40% contraction

They are principally achieving this contraction by no longer building in London, and instead bringing average sale prices substantially lower by shortly commencing new projects outside of the capital - like a 425 house build near Guildford for instance.

So all the waffle and concerns about the London market are largely noise for BKG, since a substantial amount of what they have is pre-sold and they are unlikely to commit in any material way to Central London again until there is a change in Government policy.

That incidentally is the same position of most developers, which is exactly why Central London new housing starts have dropped 58% 1H 2016 over 2H 2015.