Tipped in DTelegraph today
'Times are tough for housebuilders, but this stock will survive and prosper'
Questor share tip: this stock has the wherewithal to prepare the ground for bumper profits in the next housing cycle
Hold |
 Berenberg cuts Bellway target price
The tough property market will continue to hit trading at housebuilder Bellway (BWY), but there are some signs of stability emerging, believes Berenberg.
Analyst Harry Goad retained his ‘hold’ recommendation and reduced the target price from £27 to £25 on the Citywire Elite Company, which retreated 0.9%, or 20p, to £21.38 on Tuesday.
‘The housing market clearly remains extremely challenging and will continue to impact on trading well into Bellway’s next financial year,’ Goad said.
‘However, we do now think that signs of relative stability are emerging and we think that a trough will be reached in terms of market volumes and prices in late 2023.’
Goad is not expecting a ‘rapid market recovery’ as affordability remains a headwind into and through 2024.
‘In this context, we retain our ‘hold’ rating on Bellway as – while we see limited downside – we also see more compelling valuations elsewhere in the sector. We do, however, acknowledge Bellway’s attractive dividend yield and the company’s balance sheet strength,’ he said.
citywire.com |
Berenberg cuts Bellway price target to 2,500 (2,700) pence - 'hold' |
I saw this on Citywire.
Regret I did not sell at 2400 some months back but
happy to remain with what I have and do not see myself buying or selling
in the foreseeable future.
quote
Peel Hunt cuts Bellway price target
Tough trading over the last couple of months for Bellway (BWY) and a 44% year-on-year fall in the order book have led Peel Hunt analyst Sam Cullen to cut the target price for the housebuilder.
‘There were few surprises where FY23 was concerned,’ Cullen said. Revenues are expected to be £3.4bn, and operating margins 16%, implying operating profits of £545m, in line with current consensus.
Net cash ended the period at £232m (£245m last year), with average cash of £192m. A total dividend of 140p is expected, in line with the prior year and the £100m buyback is progressing well.
‘At £22.16, the shares trade on 0.74 times CY24E PTNAV and offer a 6% dividend yield,’ Cullen said. ‘Our target price falls from £26.40 to £25.80, but we retain our ‘buy’ recommendation. Bellway remains one of our most preferred housebuilders due to its strong track record, high discount to TNAV and ability to open new sites should the backdrop improve.’
The shares rose 0.8%, or 18p, to £22.14 on Thursday. |
UBS cuts Bellway price target to 2,530 (2,570) pence - 'buy'
Deutsche Bank cuts Bellway price target to 2,526 (2,727) pence - 'buy'
JPMorgan raises Bellway price target to 2,300 (2,200) pence - 'overweight' |
Housing completions expected to decrease materially.
Bellway cuts jobs in anticipation of UK property market slowdown
Prospect of higher mortgage rates and end of help to buy scheme leads housebuilder to shut two divisions
"Bellway, one of Britain’s biggest housebuilders, has said it is cutting jobs as it anticipates a property market slowdown in the coming year because of higher mortgage rates and the closure of the help-to-buy programme in March.
The construction company said it would shut two of its divisions and slow activity in a third, as it predicted that house completions would “decrease materially” over the next 12 months." |
2023/24 will be a horrible year for Home Builders. The Covid after effects coupled with higher interests, lower growth in China and Ukraine conflict may hurt growth in the West leading to increasing job losses. All this means money will be tighter than before and risks are becoming higher when buying a house.
Deflation: Why falling prices in China raise concerns |
Another bad TU.
Margins down, demand down as predicted.
HBs impacted by end of Help to Buy, where properties using that scheme had to be completed during H2. Therefore, further impact expected going forward.
Private reservations down a massive 35.9%
Avg selling price down.
Affordability a major problem
from TU
"The underlying operating margin is expected to be around 16%(3) (2022 - 18.5%), with the reduction reflecting the effect of build cost and overhead inflation, extended
site durations and the increased use of targeted sales incentives."
"The Group's programme of accelerating the construction of social homes partially offset weaker private demand, which was impacted by higher mortgage rates and the end of Help-to-Buy."
"The overall reservation rate reduced by 28.4% to 156 per week (2022 - 218) and the private reservation rate decreased by 35.9% to 109 per week (2022 - 170)."
"The backdrop of macroeconomic uncertainty and cost of living pressures affected consumer demand during the year and, given affordability remains constrained by higher mortgage interest rates, underlying trading conditions are likely to remain challenging in the near term."
"Total housing completions of 10,945 homes (2022 - 11,198), at an average selling price of GBP310,000 (2022 - GBP314,399)."
sikhthetech - 18 Oct 2022 - 14:28:30 - 636 of 659
Bellway. Demand slowing and another £346.2m for cladding/safety improvements.
House price inflation was just above cost inflation but house prices are expected to fall, so margins are likely to be squeezed.
On top of demand falling. |
Much of a muchness with TW. and VTY |
TU tomorrow. |
Bellway consulting on proposals to cut 90 jobs as housebuilder hit by slump in demand
Two operating divisions could be closed as part of proposals. |
Questor tip:
'This housebuilder’s shares are taking a bashing but they can still chime with value seekers' |
Fairly lacklustre update
Lower output than 2022 and average selling prices down to 300k from 315k
Doesn’t look like any major recovery will take place this year due to rising mortgage rates. |
Hi, I have recorded a 61-minute podcast with fellow investors Roland Head, Mark Simpson and Bruce Packard where we discussed Roland's investment in BELLWAY, Mark's investment in LUCECO and Bruce's investment in SUPERDRY. We also debated whether investors should run concentrated or diversified portfolios. I hope you enjoy the conversation!
Maynard
[Podcast] BELLWAY, LUCECO And SUPERDRY With Roland Head, Mark Simpson, Bruce Packard And Maynard Paton #BWY, #LUCE and #SDRY |
Hi, I have recorded a 40-minute podcast with fellow investor Roland Head all about Bellway! We talked about Roland buying at £17 during October alongside the builder's range of homes, growth record, cash flow, balance sheet, immediate prospects, dividend yield, discount to NAV and much more!
Maynard
[Podcast] BELLWAY With Roland Head And Maynard Paton #BWY |
freehold should mean freehold,
not some clause tucked away saying you need permission
to change lender, michael gove needs to get his act together |
Russ Mould for DT's Questor has column of the interims with a hold. |
Sit management might?
I would blame spellchecker! |
'suitorivate' has to be the word of the year so far..
Would you recognise a suitorivated shareholder if you passed one in the street? |
Fair question if buybacks suit private shareholders like me more than dividends and I am going on basis they suit management as it feeds through to keys of their remuneration plan, although I have not checked that.
I see NTAV was 2819p so a good discount though I need to check how high it is in historical terms. |
Not sure a share buy back scheme is the best way of returning capital to shareholders? |
Yes decent not to say boring results.
I note the £100m share buyback in terms of the £2.5b Marcap and if I have time I will check how this ratio of share buyback to Marcap compares to other big builders.
No surprise that the cash disbursed on their land bank will be reduced in the next 12 months.
I note dividend payments are roughly £150m pa. I take their comments on dividend cover to assume that the decreased profitability I guess we will see next year will not lead to a dividend reduction.
No surprise that next FY sales will be lower. I note the reduction in the March 12 order book from £2.2b last year to £1.6b this year and do not know how that compares with their competitors.
Note regional differences.
I go on the basis that for the next 6 months the share price will be in the 1900/2350 range and on that basis do not anticipate buying or selling. |
I have had a read of the TU.
BWY is the only major builder I hold so I cannot compare and contrast with the very recent statements of the other builders.
I note no comment about supply shortages and while they reference inflation they do not make a song and dance about it.
I note recruitment freeze which makes sense in terms of their land bank activities but do not know how many people they directly employ in areas where there have been shortages ie plumbers, ie IT people.
As an IBST shareholder I note that production will be broadly flat and as an INL shareholder I note land bank purchase slow down and them backing out of previously agreed deals.
Reading this TU had not moved me to buy or sell and my current reading is that the share will meander in the 2000/2300 range. Given that sales price only increased 1.6pc and the guidance they gave due to increased social housing there must be considerable margin pressure. |
Polar capital increase there stake what's brewing |
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