Bovis Homes Share Discussion Threads

[arcadian] 17/1/2016 13:27

gp1948

Thank you for that and for access to "This is Money". I have registered and no doubt will benefit from its data and news flow.
BVS does seem to be the poor cousin in the sector but from this and the other contributions above I will remain hopeful that the actual outcome is uplifting.

The JPMorgan revision is curious in that it was prior to the trading update, outside normal trading hours unless that is they had access and published prior to our market opening.

Company metrics may look good but the present market headwinds are something else pro tem.

[dr_smith] 17/1/2016 13:22

Thank-you for posting your thoughts and source gp1948, which follows good logic for actual figures and implied (conservative) for forecast.

Another variable is the phasing of developments, which can mean YOY comparison figures, including EPS, can be distorted and perhaps help explain the 'less than forecast' figure, or conversely reality may be worse.

IMV this sectors mmebers need to be viewed on atleast 2 years figures, preferably 5 years, (acknowledging forecast is only likely good for up to say 18 months ahead).

[gp1948] 17/1/2016 12:53

DD
Forecasts are one thing, reality is another.

As I've tried to show in my post 963 above, BVS were forecast to increase their EPS by 29% for the year to 31/12/2015. However, BVS disappointed and the reality is likely to be 15%.

The forecasts might say 21% for the year to 31/12/2016, but who knows what the reality will be? Based on the past, it's likely to be less than forecast.

[source] 17/1/2016 11:40

It seems these results could lead to upgrades because Bovis's 2nd half performance has been stronger than 2 months ago when it sounded more cautious. Brokers from that point on in November started to move their forecasts down...However Bovis seems to have done better than its cautious November statements.

Hopefully when the current turbulence ends people will realise Bovis is looking decidedly cheap...

Regards,
Source.

[deadly] 16/1/2016 21:41

....maybe not performing as well as others in the sector, but the whole sector is cheap.

[gp1948] 16/1/2016 21:30

Arcadian

You ask for evidence of previous estimates of EPS for BVS. I keep my own records of past estimates, but there's a graph of that data here:


(You may need to join the site to view the data, but it's free)

The graph entitled "EPS consensus revisions : last 18 months" shows that the consensus mean forecast EPS for BVS for the year ending 31/12/15 was 101p (or better) from Dec. 2014 to Oct 2015.

The same website (under the tab "Financials") now shows that figure to be 94.1p, based on a Profit before Tax of £165m.

The article referenced by DiscoDave ( now suggests that the PBT will be £158m, and thus the EPS will be lower than 94.1p - I have estimated that it will be 90p by simply ratioing the figures above.

The EPS for y/e 31/12/2014 was 78.2p .

The early forecasts for y/e 31/12/2015 of 101p would have given BVS a sector leading growth rate of 29% , but instead, we are now looking at a less-than-impressive growth rate of 15%. Hence my disappointment and my lack of faith in next year's forecasts.

The management wrote some encouraging words in their trading statement, but the reality is that BVS has not met expectations and is not performing as well as others in the sector.

All in my opinion, of course.

[arcadian] 16/1/2016 20:37

gp 1948

It is true that we won't know the definitive figure until the results are released and that there has been some writing down.

My source was Stockopedia which after one and three month broker write downs shows EPS at 94.6p. On what evidence did you base your point? Perhaps "this is money" is more up to date and I confess that I couldn`t bring up the article so there might have been more authoritative material there although for me that wouldn`t include Liberum.

We must await the results but the trading statement was quite robust so my cup remains half full. The world economy however is another matter and requires a great deal of patience.

[source] 16/1/2016 11:47

Agree with you Disco & gp1948 - it seems these results will lead to upgrades as performance has been stronger than 2 months ago when brokers started to move their forecasts down...

Hopefully when the current turbulence ends people will realise Bovis is looking decidedly cheap...

Regards,
Source.

[discodave4] 15/1/2016 21:03

Pre tax profit consensus of £158m gives an eps of about 94p by my calcs. Even if you split the difference and call it 92p, this is on a PE of only about 10.It's 4 year average PE is about 18 (sector PE is 17.7), so being conservative and a PE of 15 still gives a target share price of 1,350. If they achieve forecast earnings of 109p for 2016 that's a PE of only 8.Still seems "cheap" to me.DD

[gp1948] 15/1/2016 20:54

Arcadian - the consensus figure of 95p corresponds to a pre-tax profit of £166m, whereas the article for which DD posted the link above is now suggesting that "analysts were penciling in annual profit forecasts for Bovis of £158million" - and this lower PBT figure result in the lower EPS figure of 90p.
We won't know the definitive figure until the results are released, but my point was that estimates for BVS have been downgraded substantially over the last few months.

[arcadian] 15/1/2016 20:38

I believe that the consensus is c.95p with 111 the following year making the shares cheap on a forward PE of 8-9 especially with a dividend of 40-45p but we live in uncertain times --for a while anyway.

[gp1948] 15/1/2016 20:27

DD - an interesting article - thanks for the link.
Despite the upbeat statement issued today, the fact is that the estimates for BVS for y/e Dec 2015 have been downgraded over the last few months by about 10%. The figure mentioned in that article equates to an EPS of around 90p, whereas six months ago that figure was just over 100p which is rather disappointing (to me at least!).

[discodave4] 15/1/2016 19:10

Liberum - "The shares look cheap against the peer group".hTTp://www.thisismoney.co.uk/money/markets/article-3400953/Kent-based-builder-Bovis-set-post-big-rise-2015-profits-confirms-sales-prices-surpassed-previous-year.htmlDD

[mfhmfh] 15/1/2016 16:33

Guess I couldn't be more wrong

[source] 15/1/2016 15:56

Thanks USA and China!...Looks good value given the solid trading and cash flows today. Hopefully when things calm down sense will prevail. Regards,Source.

[mfhmfh] 15/1/2016 09:13

Finally a good update - looking for a concerted push towards 1100p now.

[discodave4] 15/1/2016 08:50

From other builders updates that I have read others don't seem to either.UBS did issue a note yesterday on what they were expecting today and it was spot on.DD

[shanklin] 15/1/2016 08:32

Its a shame BVS are not explicit about whether they will meet broker expectations albeit the implication is that they will.

[source] 15/1/2016 07:58

...also this bit is quite positive as well:-"Balance sheetThe Group had net cash of GBP30 million at the year end, having started 2015 with GBP5 million of net cash, as we maintained our tight capital discipline during a year of strong land investment."Regards,Source.

[discodave4] 15/1/2016 07:42

Looks good and nice to see they have hit all the broker forecasts for volume, Rev and operating margin.DD

[source] 15/1/2016 07:19

Finally sounds more like it....the recent worries causing these big shareprice weaknesses should now diminish as make its way back to its previous range of between 1100p and 1200p at the minimum you would think based on today's comments:-"Significant revenue and profit growthWe expect to announce a significant increase in revenue and profit before tax driven by a record number of legal completions and a strong increase in average sales price."Regards,Source.

[discodave4] 14/1/2016 20:16

At least all other builders took a similar bashing today (TW. was the biggest faller, down 5%), so not IMV a reflection of a poor update tomorrow.......I hope!.DD

[source] 14/1/2016 10:56

Always going to be concerns but in reality there has hardly been a stronger market backdrop for housebuilders for decades...

If Bovis struggles with such great tailwinds then the management need to be dumped or the business sold to others who have been making hay much more impressively. IMVHO.

Regards
Source.

[arcadian] 14/1/2016 10:19

MPC uncertainty and today`s RICS report on rising labour costs affecting growth prospects.