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Real-Time news about Country&Met (London Stock Exchange): 0 recent articles
There is unlikely to be any negative influences except for the general bad press towards the future of the housing market. As CRY builds mostly in the north,where prices have still been rising, it should have done well to the half year. Small sellers can have a big influence on the share price of this stock from day to day. On a longer timespan of one or two months look for a move back above £2 following the expected trading update and half year figures.|
|sabine: As a novice on CRY, what troubles me is that, if the North Country Homes 'model' has provided so much of the change in fortune (and share price)of the company, and is to be rolled out in the south east, then why is J Harrison not on the Board, especially as he is also a major shareholder.|
|skipster: From UK-Analyst:
Country & Metropolitan - a really cheap growth stock
argues Mark Watson-Mitchell of WatsHot.com
Private investors, who seek an excellent profits record and who are looking for strong capital growth, should be taking a big advantage of the current low price to make a very cheap investment in the shares of Country & Metropolitan (CRY) *. My view is that we should just get in there and buy the cheap stock whilst it lasts. I have followed this company since it came to the market. I have a lot of time for its management, who I consider to be extremely entrepreneurial and have the ability to create some extraordinarily strong profits in the next few years.
The magnificent profits growth to date deserves a premium rating
I believe that their progress to date and the profits that they have generated for the Group deserve a greater rating than is currently accorded to their shares. In the last six years pre-tax profits, before goodwill amortisation, have risen more than 16 times from £0.42 million in 1998 to £6.85 million in 2003. In the same period of time earnings per share have leapt over six fold from 4.20p in 1998 to 25.91p in 2003. Now that is some real performance. But to look at its share price it is instantly evident that its equity is significantly undervalued at the current 178.5p.
Affordable and complex
Country & Metropolitan is a developer of affordable homes and complex mixed property developments. In the middle of last year boss Stephen Wicks and his very capable Finance Director Nish Malde proved extremely responsive to shifting market trends. They correctly anticipated the cooling down of the housing market in the South East of England over 18 months ago.
As a result of those projections, a strategic decision was taken to increase its activities in the North of England, both via its existing operations in the North and the North West and via the acquisition in August 2002 of the NorthCountry Homes Group, a group of five housebuilding companies specialising in affordable homes for sale.
At the same time the Company began to withdraw from developing luxury homes in North West London. The majority of the C&M Group's developments will now be based on providing good quality homes at affordable prices and it intends to pursue a number of new initiatives in the South East to provide low cost homes for sale, principally to first-time buyers or key worker employees.
Current trading and prospects
Following the acquisition of NorthCountry, the enlarged C&M Group's financial reporting periods were brought into line by changing Country & Metropolitan's financial reporting date from 31st August to 30th June. As a result of this change, the enlarged group reported its results for a shortened 10-month period ended 30 June 2003, which were announced on 6th October 2003. Profit before tax and amortisation of goodwill for that period was £6.85 million on turnover of £62.8 million as compared with £3.99 million and £32.3 million respectively in the 12 months to 31st August 2002. Net assets at 30th June 2003 were £23.3 million.
The Company has reported that trading since 1st July 2003 has been strong with contracted sales of £26.7 million and forward reservations of £18.6 million as at 30th September 2003. This compares with aggregate contracted sales and forward reservations of £38.4 million at 30th September 2002. While construction costs are increasing slightly, selling prices on urban developments, which are primarily in the North and North West of England, are still firm. The market for the purchase of development land is competitive and is subject to regional and local variations.
In the South, the C&M Group is exploring housing development opportunities aimed at 'first time buyers'. The Directors intend to apply the low cost model, which has been a proven success in the North, to developments in the South. This strategy is in line with government plans for affordable key worker housing and, in some cases, brownfield planning initiatives.
The geographic spread, product range and skill base, position the C&M Group for further growth in the current climate of low inflation, low interest rates and stability in the housing market sector in which the C&M Group primarily operates. The Board is confident of the C&M Group's prospects for the current financial year.
Faster Expansion Demands More Cash
The continued growth of the C&M Group's volume housebuilding activities, its more complex mixed use property development schemes and the enlargement of the land bank requires additional financial investment. In the present environment of political resistance to greenfield developments both at local and national levels and general planning problems, acquiring building land and obtaining planning consent takes time and is subject to strong competitive pressure from other developers. The Board believes that its skills in land acquisition and its in-depth understanding of the planning process have formed the basis of Country & Metropolitan's achievements to date. In order to make best use of these strengths and to improve its growth prospects without exposing itself to excessive financial gearing, the C&M Group is raise additional equity capital.
The Placing and Open Offer, which closes this Friday, will raise approximately £7.9 million (net of expenses), addresses this requirement and, as described above, will provide additional working capital for increased low cost housing and mixed use developments as well as for expanding the C&M Group's land bank. The Board expects to apply approximately £3.8 million of the net proceeds of the Placing and Open Offer to the purchase of land and the balance of approximately £4.1 million for construction and related working capital requirements. It is believed that the potential benefits of increasing the land bank and scale of the business outweigh the associated risk of building land falling in value.
The effect of financing these land purchases out of the proceeds of the Placing and Open Offer will be to increase the C&M Group's gross assets and its capital base; thereby reducing the gearing percentage of net debt to share capital and reserves.
Broker JM Finn rates the shares as a Buy at 181.5p
On Friday 24th October analyst Leslie Kent at brokers JM Finn rated the shares of Country & Metropolitan as a Buy at the then market price of 181.5p. He considered that
"Country & Metropolitan is a dynamic residential property developer with a difference, because it not only assembles land for its own and others consumption from redundant brown field sites such as former hospitals and MOD establishments but has a unique niche at the affordable end of the housing market also. Its ambition is to become a leading developer of affordable homes."
He went on to note that the proven skills of acquiring land with planning and environmental difficulties and converting it into highly profitable new communities and development opportunities continues with more land acquisitions. He included the High Royds Hospital site near Leeds as being one such major development in the pipeline. Kent's comments continued by suggesting that the Company's management has demonstrated additional skills by successfully integrating the astute £14 million acquisition of NorthCountry Homes. It enabled the Company to reposition itself in the North of England at the affordable or 'need' end of the homes market. In the last financial period it built 650 units, this year it plans to build 900 units.
The £7.9 million Placing and 1 for 6 at 165p Open Offer will help meet working capital requirements, whilst bringing the very successful low cost NorthCountry Homes formula down to the South East where it is much needed. A number of land opportunities have already been identified on the outskirts of London. Kent concludes his note remarking that:
"By the standards of its peer group ratings, the shares remain excellent value, based on an historic multiple of only 7 times, despite strong out performance this year. Applying the formula to this year's prospective earnings implies a price target of 219p."
Numis Securities say Buy - Target 225p!
On Tuesday of last week Numis Securities initiated its coverage of Country & Metropolitan. The broker rates the shares as a Buy and has suggested a Target Price of 225p. The highlights of the lengthy 22-page research note include the following comments
"Since flotation in 1999, Country & Metropolitan (C&M) has delivered consistent profits growth. We believe that this will continue over the next 24 months, particularly as the group skilfully repositioned itself geographically towards the North and on product towards affordable housing. New low cost initiatives in the South East should aid growth in the longer term, therefore we initiate coverage with a Buy recommendation.
Switching market position. C&M has demonstrated tremendous market awareness in switching focus from the South East to the North and from upmarket housing to more affordable housing. The speed of change was hastened last year with the acquisition of NorthCountry Homes. The company now aims to develop its low cost offer in the South East and there is scope to add-on new geographical areas.
Fund Raising. The company has recently had a fund raising with 5 million shares being placed, raising £7.9m net of expenses. This will enable the company to continue to take advantage of land buying opportunities in Outer London and develop its affordable offer in the South East. The shares were placed at 165p.
Regeneration. C&M specialises in the redevelopment of brownfield sites such as former hospitals, garages, old bus stations etc. Therefore, it is likely that the company can grow the number of units it produces even if the current restrictive planning regime continues to tighten. As these sites can often be bought very cost effectively, the company can produce affordable homes, again making its product defensive even if the market tightens.
Results and forecasts. C&M's recent results for the period to June 2003 demonstrated impressive growth despite the company only reporting on a 10 month period. Revenues increased 94% to £62.8m, and operating profits increased by 76% to £8.9m. Pre-tax profits were £6.85m up 72%, leading to eps of 25.91p. We forecast 18% growth in eps for 2004 to 30.5p. Our confidence in this forecast comes from the strong forward sales position which the company currently enjoys. For 2005 we forecast 34.8p of earnings per share.
Outlook and valuation. C&M is currently trading on an 8% PE discount to the already undervalued housebuilding sector. On PNAV, the modest prospective premium undervalues the real value of the company's landbank. Therefore, we recommend investors Buy shares in Country & Metropolitan, and initiate full coverage with a price target of 225p."
Well it is certainly good news to see another and far bigger broking firm starting to research Country & Metropolitan. Let us hope that they can generate some fresh investor interest in what I know to be a cheap stock. I rate these shares as a very Strong Buy and my advice to holders is that they should support the Company and subscribe 165p a share for their full entitlements. The Open Offer closes at 3pm this Friday (14th November).
Conclusion - These shares are incredibly cheap and must be bought now!
As I have already stated at the start of this recommendation I believe that investors now have a very cheap buying opportunity to jump into Country & Metropolitan shares whilst its shares are so under-rated.
Financial period to Pre-Tax Profit £'000s Earnings Per Share Est PE Ratio
31.08.2002 A 3,941 16.56p 10.78
30.06.2003 A 6,849 25.91p 6.89
30.06.2004 E 9,750 31.00p 5.75
30.06.2005 E 12,000 35.00p 5.10
On the above profit estimates these shares should at least be trading over 100p higher than the current 178.5p. When the market starts to realise its potential and its previous record of profits growth I reckon that the shares will enjoy a significant re-rating that will take them to well over 300p within the next year.
Having taken a close look at the Group's share price chart the bounce last week from the lower line of a steeply rising trend channel indicates that a move back above the previous High of 207p could be achieved within the next few weeks. Numis's 225p target will be easily penetrated, hopefully before the end of 2003. And certainly, on its earnings potential within the next year or so, I see the Group's shares trading in the price range of 300p to 350p before the end of 2004. That is why I say that the shares of Country & Metropolitan at 178.5p are now an exceptionally Strong Buy.
Target Price by end 2004 of 350p, set a Stop Loss at 150p
(FT Construction & Building Materials - market capitalisation £42.82 million (ex the Open Offer) - three market makers deal in up to 5,000 shares on a 7p spread)|
- according to the offer documents, all the shares are placed already but conditionally on shareholders not taking up their allotments. This seems to be equivalent to underwriting the offer, so I don't understand your comment in message 44. It seems quite tightly priced, so presumably there was no real problem in placing them. The directors are taking up some respectable amounts so there is also support within the company.
Yes, it will dilute earnings but the shares have done risen reasonably over the last couple of years so it may be worthwhile subscribing. This section of the house market will probably do quite during the next few years and the company is small enough that little local housing housing deals will keep the share price moving.|
|skyracer: Self fulfilling. The closer the share price descends to 165p the less incentive there is to subscribe to the offer. Committing cash at the offer price for a few weeks also carries a risk.|
|rbf: Some quite interesting moves in the share price over the past couple of days.
One assumes just profit taking, but any other thoughts?|
|huttonr: Does anyone know why we are seeing the surge in share price? I think that the company is undervalued, and a price in line with others in the market would be around £1.50. However, until recently, the market has not agreed. The volume of trades is small, so it may be simply a lack of sellers in the market but is anything else going on?|
|skyracer: I was trying to find out why this share appears to be going nowhere. One reason is higher administrative costs (12%) than its peers (typically 9%). PE, hence share price, would have to be lower to compensate before I would consider investing. Having said that you are not going to lose your shirt on this one, its just that there are presently better investments like Ben Bailey, and Bett before it was taken over.|
|notforc: This companies share price rose by 13% yesterday on trades of 21000 sells and 16000 buys! Does anybody know what is going on?|
|the bug: RNS Number:7871N
Tay Homes PLC release:
27 November 2001
Tay Homes plc
The board, which is being advised by Williams de Broe Plc, has noted the
recent increase in the share price of the company and wishes to confirm that
talks are taking place relating to a potential offer for the entire share
capital of the company at an indicative price of 110p per share. These talks
may or may not lead to an offer.
The board will keep shareholders informed of developments.
IS IT CRY GOING FOR TAY ONCE AGAIN?|
Country&Met share price data is direct from the London Stock Exchange