 I have three large residential holdings in my portfolio ATM: BTRW, TW. and BWY. The first two have good balance sheets with large positive cash holdings and no net debt.
BTRW attractions are its size, efficiencies to be made with Redrow, and its competitive advantages of large land bank, land promotion and now as a master community builder with its deal with Homes England and lloyds and conservatively run IMO.
TW. attractions are size, land bank, past above average performance criteria and dividend policy (8% whilst we wait). Attracts the sharper side of investors hence activists and shorters and is run less conservatively than BTRW IMO.
BWY attractions are size but with obvious growth opportunity, land bank, good performance metrics on average and a good alternative as a long-term hold to BKG if you aren't bullish about London and the SE and its new venture into rentals.
I also have Vistry as a small holding and building very slowly. Attractions are its partnerships business, potential capital disposals back to shareholders, low future capital requirements and potentially high ROE, ROCE and CROCI going forward. Because of the performance metrics this could carry the highest PE a few years onwards from now. |
CRST has an issue as a going concern ATM which, although more likely 'technical' than real, suggests its balance sheet isn't the best in the sector. In fact I think it is the worst of the listed and is rated so. Provisions for cladding issues are around 10 times its current profit expectations. A recovery play it is but with considerable risks. The only major positive here is that the balance sheet and costs for cladding have been thoroughly examined and therefore it is unlikely there will be anymore skeletons in the closet. |
There's short interest in both BKG and TW currently. I don't have data on short positions below 0.5%, so BWY and BTTW may possibly have some open short positions below this area. |
On the absolute basic-simplistic ptbv measure (and figures purely according to Morningstar which may or may not be accurate!!) the league table is thus:
CRST 0.6
BWY 0.9
TW. 0.96
BKG 1.12
PSN 1.25
BTRW 1.49 |
It's a very good question, however more difficult to answer.
Berkeley, over 3 decades has outperformed the wider sector,
some of which is accounted for by it's smaller size in the 1980's v the main sector players.
BKG currently appears to see value in buying back large amounts of their own shares - they are effectively a play on London in particular, as well as the wider SE. Current forecasts though show stagnant profitability over the next 3 year - obvs that may change and be revised significantly.
BTRW is a volume play, synergies from the Redrow buy are interesting, as is the jv with Lloyds announced last year.
They have a large strategic land bank and own a land promotion business, having acquired Gladman a couple of years back.
TW I know less about. |
EssentialInvestor - you may well be right. I was talking about the last time I looked at each (in relation to their valuations obv') but it's a while ago now (probably during lock-down in fact!!! :-) so I am in no way "au courant" vs the wider sector (with the one exception of CRST).
I would be interested to know what you (or anyone else) thinks are stand-out value candidates. |
value, how is the Bellway balance sheet better than BTRW, BKG, TW..
All the above have hundreds of £ millions in net cash - unless I'm misreading.. |
BWY looks undervalued to me - but maybe not as much so as CRST? I got lucky and sold at 3053p in October having bought a couple of times much lower - but I still hold CRST having averaged down as low as 147p.
As EssentialInvestor says - the issue here is potential cladding costs, as it is with CRST of course.
Having taken a very quick look only; total provisions on the bal' sheet (current and non-current) total £509.2m. Notes to the accounts say; "The total amount Bellway has set aside in relation to the SRT and associated review since 2017 is £609.7 million" but also; "Total recoveries recognised since 2017 are £80.3 million" which presumably refers to monies clawed back from suppliers of the bad cladding etc. etc.?
The same issues exist with CRST and the two look to have the best balance sheets in the sector to me. Both look good value IF the current provisions are anything like sufficient. But I've no real idea re the potential outcomes here relating to cladding so am reluctant to have two "punts" running.
Also, I would very much appreciate the views of anyone who does know what they're talking about re this whole issue. |
wad, what's not referenced here recently is
BWY:s potential liability for cladding redress. |
RBC also think it is undervalued.FWIW
Analyst Anthony Codling said: “The robust performance of the group is at odds with its subdued share price performance. The underlying housing market appears to us to be stronger than investors think it is.” |
From Citywire
quote
Jefferies analyst Glynis Johnson is spotting value in housebuilder Bellway (BWY).
Johnson retained her ‘buy’ recommendation and target price of £36.20 on the Citywire Elite Companies A-rated housebuilder, which was trading down 5.3% at £24.26 on Tuesday after first-half 2025 results met expectations.
The group is now 90% sold for the full-year and Johnson said ‘consensus will likely narrow after this update’.
However, management was cautious in its guidance, and this was also reflected in the 2026 guidance based on similar rates year-on-year. However, Johnson noted ‘the strong order book shows the group is well positioned to capture any upside in demand’.
The shares are trading on a 0.78 times 2025 price-to-net tangible asset value. Johnson notes the share price is yet to reflect the ‘upside potential from market improvement, reset of margin from new land intake, and/or potential government policy – either relaxation of mortgage lending or demand-side stimulus’.
‘We see it as the value play in the sector,’ she concluded. |
TU has not been greeted well today , closed down 5% . It looks OK to me , though the share price has risen recently and guess the market expected more. |
Never ever buy a freehold new build house without having the Land Registry TP1 document fully explained to you by an independent lawyer. They are apparently scamming buyers from the start by selling them fake-freehold properties according to at least one ex MP. Make your own mind up though : |
edit
the cost of that TP1 paperwork is just a few quid
dyor |
Added at £22 on advice of a different broker who said switch out of Berkeley. |
From Citywire today.
I have to acknowledge a curious reluctance to replace what I sold a few months back at a comfortably higher price
quote
Bellway (BWY) is at the beginning of a five-year recovery programme but there are better housebuilding plays elsewhere, says Berenberg.
Analyst Harry Goad retained his ‘hold’ recommendation and target price of £32 on the Citywire Elite Companies A-rated stock. Trading at £22.54, the stock was little changed on Friday afternoon, but is down about 17% over 12 months.
Goad said the group was ‘at the early stage of a five-year recovery programme in which we see it delivering 11,500 houses per annum by 2029, roughly back to the level it was last at in 2022’, which will trigger a recovery in margins.
Although the recovery is ‘considerably slower’ than the pace of declines suffered in 2023 and 2024, Berenberg believes it ‘appropriately balances the tailwind of recovery with various ongoing challenges on affordability and costs’.
‘We expect average profit before tax growth of 20% per annum over this period, with the group retaining a strong balance sheet,’ said Goad.
‘We thus maintain a positive outlook for the group over the mid-term but keep our “hold” rating as we think there are more compelling ideas elsewhere in the sub-sector.’ |
XD 38p this week. |
Gilt yields on fire today which will put upwards pressure on mortgage rates, hence BWY taking a beating. Will the Labour budget unintentionally detonate the housing market? |
Prelims have taken Bellway to a 3 yr high. Despite profit fall. |
Perhaps Vistry need to hire a company to post fake positive reviews all day long ?
Vistry half year results 5th Sept
Redrow results 11th Sept |
If you are using trustpilot as your metric then they score average 3.9 from 5,593 total reviews.
Whilst taylor wimpey score 4.0 barratt 4.4 persimmon 4.5
Linden Homes 600 reviews 2.6
Bovis Homes Group •384 reviews 1.9
Countrysidepartnerships 821 reviews 2.2
So if you think this is a valid metric then Beazley sit somewhere in the middle.
The newest reviews for Vistry are much more negative, but the weakness of using Trustpilot is that it generally attracts people who feel strongly , which in the case of buying the largest purchase of your life is likely to be emotive. If you are quietly happy with your house you are probably not going to bother posting. A cross-sectional survey like Which do is about as close as you can get to a true customer satisfaction metric.
Wouldn't want to work in a housebuilders complaint dept. |
I wonder how unusual the issues are at that site, looks like some vociferous complainers and a receptive bbc in quiet news day.
Show me a snag free house. |
getting some bad press today due to poor construction and multiple snagging issues at Cambridgeshire site |
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