Berkeley Share Discussion Threads

[cockneyrebel] 27/2/2009 14:55

BKG look very strong today and 150 day breaking the 200 day moving average.

Persimmon upgraded to a buy at Panmure today.

CR

[jonwig] 27/2/2009 13:55

Where's the dilution, Prof?
The shares were snapped up at the latest close price.
(NB. more than 5% would have meant a rights issue.)

BKG have clearly an aversion to taking on debt, and for that I'm most thankful!!

[professorsmsmith] 27/2/2009 12:59

But they have got £200 million + of cash! Why go for dilution? Surely they could raise a £50 Million debt facility: even in this market!

[jonwig] 27/2/2009 12:51

Prof - they don't.

But there is clearly demand for BKG stock, and the cash will enable them to buy up land from distressed sellers.

BTW, FT article:

[professorsmsmith] 27/2/2009 12:47

The bit I don't get is why they need the placing at all. Can anyone shed some light on this?

[the white house] 26/2/2009 19:04

So, have read the doc but not when divs will actually start and any target amounts? can anyone clarify or has this been left open to another future (4th redraft of policy) change...

see no mention that the 2014 was delayed from 2011 and they would 'double it' i.e £6 to reward those happy to hold...

Apart from my lack of clarity re the above future looks even stronger now and lets hope they tell about some of these hot land deals soon...

[wenlynn] 26/2/2009 17:50

Successful placing of shares at a great price !
What other house builder could do that ?

[ssords] 26/2/2009 17:48

Sharp change of poliocy by BKG. Only a month ago stated all set for the 2014 pay back. Now dropping the pay back. Am pleased really it was always messy esp explaining it to my tax man.
Can anyone explain the logic why, with the just now placing of shares - putting more on the market, I would have thought that share price would fall. Yet it is rising.
Not grumbling just unclear why.
Many thanks.
Ssords

[jonwig] 26/2/2009 11:18

All sorted!!

A total of 6,041,030 new Units of £0.10 each in Berkeley (the 'Placing Units') have been placed by UBS Limited at a price of 840p per Placing Unit, raising gross proceeds of approximately £51 million. The Placing Units being issued represent approximately 5 per cent. of Berkeley's issued ordinary share capital prior to the Placing.

[cockneyrebel] 26/2/2009 10:58

:-)

Builders all doing well today.

CR

[jonwig] 26/2/2009 08:32

Change of strategy - admirable flexibility here:



Placing should go at around yesterday's price of 830p.
If divis for the next six years can average 50p (that's the £3) we're yielding between 5 and 6%. The only housebuilder paying anything I think.
And the only one not needing to raise cash is first to move!!

[melody9999] 21/2/2009 18:54

could be a break out down though given the state of the wider market. but I am watching closely.

[cockneyrebel] 16/2/2009 09:17

150 day moving average gone through the 200 day - a 'golden cross' do they call that?

A vicious breakout coming soon imo.

Several other builders close to the same indicator.

CR

[cockneyrebel] 15/2/2009 20:08

Yep, my own mortgage has halved. Saw a guy on the news a week ago, interest only mortgage - he'd seen it go from £995 a month to £300. He couldn't get over how well off he felt.

Tesco also doing petrol at 85p a lite here with a 5p off voucher - that's down drom the 114p a litre it did get to 6 months or so ago. The avergage two car family is £65 a month better off for that cut.

Then there's the fall in food prices as Tesco/Asda now are going big on value and competeing on price. I dare say most people could have cut out a fair bit of the Tesco finest for Tesco economy if things have been tight and saved more money.

Electric bills coming down 9% from next month. That's a tenner month we'll save, same for most average homes I guess.

2.5% vat reduction on everything

When you add all those things up there's a lot of people that are much better off than they were a year ago. The press doesn't like to make a big deal about that tho - it's good news and doesnt sell papers. Scarey stories of bank collapses and redundancies are much more profitable.

CR

[cockneyrebel] 15/2/2009 14:49

Berkeley Group which raised its house prices last month, saw a doubling of sales in the past two weeks, according to chairman Tony Pidgley



CR

[jonwig] 13/2/2009 14:09

CR, your scenario looks very reasonable, but what's keeping the share prices back is the balance sheet issue, basically:

Selling price = cost of build + cost of land + profit, traditionally ⅓ + ⅓ + ⅓.

If selling price falls, and value of existing land has to be written down, there's a double pincer on the assets and profitability of the company.
Getting bank finance depends on a certain level of LtV covenants which are being pressurised.

Any company not needing finance (eg. BKG - that's about all) is in the ideal position, whilst BDEV and TW. are pure plays on securing finance together with some housing recovery. PSN should be OK, though not much to go for.

[cockneyrebel] 13/2/2009 13:06

Interesting article - cheersw.

Here's why builders will rise from here imo:

1) Loads of small builders bust and the one man band won't be able to get the loans so all the new builds will be done by the big builders as the market recovers - lots of the competition wiped out.

2) They are currently selling existing built or near completed houses to increase cashflow and building no new ones. This means when there's a recovery there will be a lack of supply.

3) Because they are selling houses built with materials purchased a year or two ago those materials cost them a lot more than they would today - so margins at the moment are lower becaue of that. Once they start building new homes the material costs will be lower - margins rise even if prices don't. When prices do rise it gets even hornier.

4) Funds want to acquire positions in builders, they like me won't give a monkeys what the valuation is today, they will be looking a year or two out. They won't be able to acquire big stakes when all the private investors are clamouring after them so they will buy now regardless of valuation.


All of that is working agains these shares going down and there are a stack of shorters that have to close too - they 'have to buy' at some point to close their position. All of that is what is adding to the pressure on builder shares to rise - that's why these are up and bottomed last October! Shorters have been getting burned ever since.

CR

[jonwig] 13/2/2009 12:48

TWH, yes, here it is:





I'd agree, impressive!

When you said tallest, my mind went to the Pinnacle Tower office project in Broadgate, which will be 300m tall:

[the white house] 13/2/2009 12:23

jonwig

re St George's Tower



Deffo BKG's!

Looks amazing, so lets all have a guess at how much the whole block will go for!?....& how much for the best of the 6 bed penthouses (plural!)...the most expensive flat in the World?

TWH

[wenlynn] 13/2/2009 09:57

Shame that Tony's son was not as clever - marrying the Geordie girl was not a smart move !

[jonwig] 13/2/2009 08:27

CR - also, the article doesn't mention foreign buying interest ... they get not only the lower price but weaker GBP. Except the Russians, of course.

Recent article about Tony Pidgley and BKG:

[cockneyrebel] 13/2/2009 07:36

Cash buyers scent rich pickings in property



CR

[hamlette] 12/2/2009 22:33

Don't get too excited. There are a lot of 'off plan' London buyers from 2007 out there who cannot complete in 2009 because (a) Valuations are coming in well under 2007 prices (b) Anticipated mortgages unobtainable at current Loan to Value rates. All this adds up to a lot of defaulters. Take a look at this link.

[cockneyrebel] 12/2/2009 18:04

The chart is reaching breakout territory actually. I went long a couple of weeks ago here.

I reckon when house sales pick up and the nervous punters want to dip their toe in again it will be the likes of BKG with its cash will be attractive.

There's a lot of cash buyers in the London market at the moment. Auctions seeing a lot of cash buyers too.

CR