Barratt Developments Share Discussion Threads

[davethehorse] 15/9/2022 14:51

Bouncing nicely and going ex div in a couple of weeks with a 6.5% divi, nice...

[davethehorse] 14/9/2022 18:33

Have bought in, looks way oversold

[porsche1945] 14/9/2022 15:25

These got down to .34p in 2008/09. A pal of mine who is a solicitor in a conveyancing office said sales on new builds are now down 30pc plus across the board, if thats true the biz model of all the builders is fxcked without gov assistance, watch this space, screaming short. Wipe out next year for U.K.

[lafiamma] 14/9/2022 07:37

And now some good results from Redrow too - increased forward EPS guidance and a 31% increase in the dividend on top of the recently announced share buyback!

[lafiamma] 13/9/2022 10:58

Some good director buying in the sector... Vistry CEO has been buying, and so to has Crest Nicholson's

[cwa1] 12/9/2022 09:22

Modest but better than nothing I suppose...

The Company announces that on 8 September 2022, Katie Bickerstaffe, Non-Executive Director, purchased 1,200 ordinary shares of 10 pence each in the Company

[unastubbs] 08/9/2022 04:51

Alastair Osbourne in The Times this morning

Builders stand on firm foundations

Some housing crashes mainly happen on the stock market. Shares in UK-listed housebuilders are down about 40 per cent this year, with Liberum analysts pointing out that August’s performance was the “third worst month since 2008”. But is the roof really caving in? Equity markets always look forward — and no one can miss the trouble ahead. Even Barratt Developments’ boss David Thomas is spelling it out in the full-year results: a hod-full of “macroeconomic uncertainties”, around “inflation, energy costs and interest rates”, with supply chain bottlenecks and the Ukraine war thrown in. How much of it actually hurts depends, of course, on the size of the shake Liz Truss gives to the magic money tree: a bananas £200 billion on the raciest estimates. But, before her big giveaway, there are signs the market is slowing. True, it’s not immediately obvious from Halifax’s latest data (report, page 40). It shows a 0.4 per cent month-on-month house price rise in August, adding up to 11.5 per cent for the past year, with a typical house now at “another record high” — £294,260. Yet, as its mortgage director Kim Kinnaird emphasised: “Industry surveys point towards cooling expectations across the majority of UK regions.” On the ground, too, housebuilder selling rates are falling. Barratt saw a drop in weekly sales at its 332 outlets for July and August — down to 0.6 versus 0.82 last year and about 0.7 pre-pandemic. There was a similar trend in July at Taylor Wimpey. Even so, does that justify the share price falls? The looming end of Help to Buy has long been priced in. Ditto Michael Gove’s myriad cladding taxes, with Barratt making no change to its £435 million provision. And Thomas is relatively sanguine about both a house price dip and rising interest rates. He admits “house prices are off the scale”, with all the intergenerational inequality that causes. But if they fall, so does the cost of buying land. As for rates, he says: “If Bank rate goes to 3, 4 or 5 per cent, so be it. We’ve operated with those rates before.” So, too, he says, have UK banks, all far better capitalised since the financial crisis. He thinks they will still lend against housing. First, because the UK has not only full employment but labour shortages. Second, because history shows that UK house prices keep going up. Underpinning all this? Britain’s housing shortage. “We don’t build enough houses,” he says, with Barratt shooting for 21,500 completions over the medium term, up from 17,908 last year. Long-term demand isn’t going away. To boot, Barratt’s in much better shape than in 2008 to withstand a downturn. Back then it had £2 billion net debt. Now it has £1.14 billion net cash. Despite that, on shares down 2 per cent to 414p, valuing the group at £4.2 billion, it’s trading at 0.8 times net assets. That, says Thomas, is “unusually low”, when the 20-year average is “1.3 to 1.4 times”. It’s one reason he’s using surplus cash to buy back £200 million of shares rather than paying a higher valuation to buy more land. It’s a choice reinforced by extra planning system delays, housebuilders say, since the Tories lost the Amersham by-election and got more nimbyish over their perennially unmet target for 300,000 new homes a year. Yes, Thomas may yet prove too bullish. But, maybe, Britain’s housebuilders are on less shaky foundations than the market thinks.

[sikhthetech] 07/9/2022 15:14

UK housing market shows signs of slowdown, says builder Barratt

Home reservations fall over fears of inflation and rising interest rates


"The UK’s housing market is showing signs of slowing down as inflation and rising interest rates rein in buyers, according to the country’s largest housebuilder.

Barratt Developments said in its annual results statement on Wednesday that the number of homes reserved by buyers each week had fallen and was now below pre-pandemic levels. The company anticipated that house price growth would moderate as a result."

[tornado12] 07/9/2022 10:50

I get this is a cyclic stock and Im here mainly for my portfolio divestments. Since it is lower price and moving towards the bottom of the cycle that is the reason I have start accumulating now. I believe in BDEV ability to perform even in difficult times, and eventually I expect both share price and dividend rewards in next 2-3 years. Will follow in details over next month until ex-divi date and decide if to add few more or not here. If they are making the share buyback step it bodes well in their confidence, even if I dont believe in this approach to return excess cash...

[advfn_1122] 07/9/2022 09:23

Future still bleak - especially with Interest Rates on the move - fewer Buyers - less demand but just my thoughts .
I prefer the BIG Energy Players - BP for example ... Hydrogen Developments look very promising !

[roguetraderuk] 07/9/2022 09:13

gh. hb shares will go up before earnings pick up in the same way the share price have fallen before earnings have started to fall. the mkt looks ahead. the question is whether the bottom in earnings will be in 6 or 12 months or longer. i think mkt is over reacting but that doesnt stop shares falling, so the wait to buy continues. before the talked about price cap, consumers could expect to see 50% or more lower prices next winter and maybe 75% lower the following year. thats all money in pockets. but the price cap muddies the waters in that it fixes energy over the next few years, unless there is a mechanism to pass on falls in energy prices to the consumer.

[ghhghh] 07/9/2022 09:08

£800m of that is intangibles and the net cash is before deducting land creditors.

However all HB's have never been in such a great position to weather the impending slowdown. Markets are assuming that they will steam straight into the highly visible Iceberg. However they now have the contracted forward sales and cash to minimise the damage. Barratts went into 2008 Sub Prime with £2bn net debt!

Clearly all HB's are now reducing land purchases and will build more to order, thereby raising cash. No HB is going to say that they expect house prices will fall because that's the Kiss of Death. However this will be Plan A.

At some point HB's will be re-rated as recovery stocks, hence earnings are likely to fall over the next 6-12 months but at some point shares will go up. HB's trading at 5 - 7 years lows!

[unastubbs] 07/9/2022 08:15

says it all dodge. the market is focussed on the future but if it gets much lower then this is likely to be taken out.

[dodge meister] 07/9/2022 08:12

Market cap of £4.3bn, net asset of £5.6bn. Cash of £1.1bn and EPS 83p with a PE ratio of 5.

[roguetraderuk] 07/9/2022 08:08

here its all about whats to come. clearly things were v good til now. higher margins higher eps higher divi and buyback. and clearly right now things are holding up. the q is how much worse things get from here and whether enough has been priced in. i suggest the worst has been priced in in terms of potential economic downside. but the mkt overshoots regularly and tops and bottoms tend to be big spikes.

[tornado12] 07/9/2022 07:34

I would agree and divi increase to 25,7p. Macro uncertainties remain, but a bold action by Liz on capping energy costs will help to relief the near term pain and allow businesses to run without continued massive escalation of inflation GLA

[unastubbs] 07/9/2022 07:33

looks very good to me, dividend slightly lighter than some predictions I'd seen but nevertheless still substantial. buyback won't be to everyone's liking but I personally believe it is in the interests of long term holders such as myself, so I welcome it. it certainly indicates a position of strength.

no idea how the market will take it but I can't see them being trashed, but then again the rise yesterday might be all we are likely to see. anyhow, GLA!

[cupra kid] 07/9/2022 07:30

Look decent enough and a share buyback programme announced too.

[unastubbs] 07/9/2022 03:17

From The Times this morning, gives some insight in to what the market is expecting:

"Barratt is due to issue its full-year results today and is likely to report sales up from £4.8 billion to £5.3 billion on the back of a higher average selling price and increased completions. In July it forecast fullyear adjusted pre-tax profit in a range of £1.05 billion to £1.06 billion, up from £919.7 million the year before. Housebuilders have been hit by fears over the outlook for the economy, rising inflation and the cost of living, as well as the impact of rising interest rates on housing demand. Investors will be hoping for reassurance on the outlook."

[lafiamma] 06/9/2022 22:19

Looking forward to tomorrow. I totally missed this on Monday buried in the small print at the end of the extensive Vistry announcement and only spotted it now when searching for some other info!...

"An update on the Vistry Group's trading in the period from 1 January 2022 to 4 September 2022 is as follows:

the Vistry Group's average private weekly sales rate for the year to date remains ahead of last year at 0.78 (2021: 0.75) with demand in the second half reflecting the more typical seasonal trends seen prior to 2020;

the Vistry Group continues to see a good level of prospects, and pricing remains firm;

the Vistry Group's partnerships business is extremely well positioned to meet the very high level of counter-cyclical demand across all tenures, though the Vistry Group is seeing some early signs that the land market is settling after a more heightened period of demand;

the Vistry Group's forward sales position has been further strengthened with total housebuilding and partnerships' mixed tenure forward sales up ten per cent. as compared to the prior year position at £2,287 million as at 3 September 2022 (3 September 2021: £2,078 million), representing 96 per cent. of total forecast units secured for the 2022 financial year;

the partner delivery forward order book totals £827 million as at 3 September 2022 (3 September 2021: £890 million), with 96 per cent. of forecast revenue secured for the 2022 financial year;

the Vistry Group's total costs were up on average six per cent. in the first half of 2022 and, reflecting increasing energy prices, cost inflation is now running at approximately eight per cent. Price increases have offset cost increases in the year to date; and

the Vistry Group continues to expect to deliver a significant improvement in year on year profitability in both its housebuilding and partnerships businesses in the 2022 financial year, ahead of the Vistry Group's expectations at the start of the year."

[gswredland] 06/9/2022 21:47

Let's see what tomorrow brings...

[wskill] 06/9/2022 16:12

Nothing nasty in the results otherwise the share price would have had a movement in the opposite direction, after the good BKG trading update today .

[cwa1] 06/9/2022 10:07

Nothing-just lots of factors coming together. An up market day. Truss talking about easing the fuel crisis. BKG update. BDEV results incoming. Etc, etc.

[1224saj] 06/9/2022 09:55

All major builders stock are up about 4% off bottom today. What does the market know that PI's don't?

[unastubbs] 06/9/2022 08:56

hopefully augurs well for results tomorrow...