Berkeley Share Discussion Threads

[rcturner2] 30/11/2016 15:23

So they are effectively just returning the NAV to shareholders through the dividend. Once the land bank is sold/developed on, what is the future?

[phoenixw2] 30/11/2016 14:13

You know that BKG strategically accumulated a large land-bank at 'bargain prices' after the turn of the cycle [2008>], and are currently focusing on building it out and on-selling some undeveloped plots to other companies? I don't know how many years this landback will keep them supplied but I haven't seen it highlighted as an issue in the foreseeable future.

[rcturner2] 30/11/2016 13:41

I tend to take the view that the glory days for housebuilders have been and gone, at least in relation to the current housing cycle. If you bought in when values were low after the 2008 crisis then I believe that the vast majority of the growth and gains have been had already. I just cannot see the attraction of housebuilders given the current economics of the industry. The elephant in the room that never seems to get discussed here is land prices, which is what drives the profits of the housebuilders later in the cycle. Land prices are currently high and that means future profits are much more vulnerable.

[anley] 30/11/2016 13:07

Then all will be made clear of FRIDAY.........

[dandanactionman] 30/11/2016 12:03

All the following is IMHOI am in two minds on this share.On the one side forecast earnings and dividends look good.On the other hand (A) Barrett dev said some poor things about London sales?(B) the trading statement appeared to talk about hiatus around referendum and then 20% down reservations in August. Could the June July figures be worse then 20%?All the above is IMHO.

[r ball] 29/11/2016 19:36

Well maybe contracting.

[r ball] 29/11/2016 18:43

Concertina company. It's been contracting for a while now. Sold package of ground rents for what £90m last year was it?

[anley] 29/11/2016 16:58

It also sold developments in 2015/16 which will come in to the P/L account so its exposure has been limited to land value declines in London.
In other words it has been building out - collecting the cash and will await events in 2017 all to be published this Friday at 7.30am.
Outside London land values have been static having just sold residential land south of Cambridge in 2014 and 2016. What has happened is that materials have and are creeping up again and with the £/Euro/$ decline expect new year price increases.............

[phoenixw2] 29/11/2016 16:41

Ah thanks, I'd read that but not given it more credence than a rumour...
Here it is -

Couple of snippets:
'Two of London’s biggest house builders are set to post bumper profits, confounding concerns that the capital’s property boom has slowed dramatically.
Luxury house builder Berkeley forecast a near 50pc jump in half-year pre-tax profits on Friday, rocketing from £237.6m to £352m...
...Short positions against Berkeley from earlier this year have fallen, which were put up against it as it was believed to represent the volatile high-end London market. This perception is wrong, said Anthony Codling, an analyst at Jefferies...
...He said that Berkeley was relatively unharmed “because it cancelled paying a dividend and instead bought land in 2008” putting the company in a strong position”...

[raffles the gentleman thug] 29/11/2016 16:36

He only ever posts on down days ... and normally some waffle about what he sees outside the train window heading into waterloo

[rbonnier] 29/11/2016 16:33

Wonder where hedge is today

[anley] 29/11/2016 15:35

The figures were leaked on Sunday and again yesterday by the Telegraph.

[phoenixw2] 29/11/2016 14:36

Between my previous pondering^ to the current SP, the gap below 2900* has just got 20% smaller. Perhaps it's in part the growing risk of re-promotion that's making the shorts cover? But apparently the last reshuffle of this year is tomorrow so it's not happening this time. Any whiff of easing of the stamp duty hikes come the next budget [March-17, IIRC] and... we'll see.

* To be clear I'm not suggesting 2900 is the magic number.

ps. Anley, what 'early release'? I realise 1/2yr results are out Friday but believe that to be per the regular annual timetable.

[anley] 29/11/2016 13:20

Who in the City is still short based on the early release of the profit figures?

[phoenixw2] 28/11/2016 13:35

Here's one to ponder, at what price might BKG get promoted back into the FTSE-100?

Looking at the market caps in the bottom of the 100 index vs top of the 250 I currently reckon about 2900 or so.

[phoenixw2] 28/11/2016 13:22

@Dr-S.
From my perspective the house-builders were supposedly going to get immolated in a BREXIT induced armageddon, and the sector thus took a beating and some. Hardly surprising when even the government in desperation, knowing peoples' psychological pressure-points, went so far as to suggest house-prices would crash.
Meanwhile the likes of doomsters at Goldmans have yet to revisit their June-16 re-rating of Sell/Target px [12Mo] of 2110p. Credit Suisse are similar but issued a re-iterate/Underperform in September. Those ratings are 12 month forecasts, but if the^ PTP forecast on Friday is in the ballpark then the likes of GS+CS are going to have to consider their forecasts or risk looking fools.

I reckon if Friday's numbers come in around the solid forecasts then and only then will we see those for the longer-term being re-considered. Meanwhile roll on Friday, I'm 'feeling lucky', by the afternoon the current FYield of 8.25% might look like the bargain I believe it to be :)

[dr_smith] 28/11/2016 11:53

Fair comment Anley - sometimes the answer is there but lost in sea of information overload. I'll get back in my basket until friday ;-)

[anley] 28/11/2016 11:32

DR SMITH........you will have to wait for a reply from BKG when they announce their figures as I expect no one on this BB site is in a position to give us "insider" figures and facts..........I wish they could and we would make a ton of money!

[dr_smith] 28/11/2016 10:53

The same resource shows a 0% revenue increase the following year.
I take this to mean 0% as distinct from null/undefined.
I would expect a circa 20% EPS growth. The div return program is only £1 p.a. so can explain a tad. Maybe YOY figures skewed due to phasing of large developments and the bulk of 2018 pre-sale figures are included in the preceding years 45%.

[anley] 28/11/2016 09:02

Stand by for a jump in profits when they are announced this week..........

[jockthescot] 25/11/2016 18:53

Monty, if you actually get off the train, and walk the streets, you mind find out a bit more rather than a 'generic comment'. I live here, and yes there are arguably small pockets of oversupply, but overall, it's not the case.

[garycook] 25/11/2016 15:25

Monty,Your bearish on everything,and your predictions are laughable also.

[montyhedge] 25/11/2016 14:04

Go to London on the train, London awash with 2 bed 2 bath apartments.I'm bearish on house builders.

[raffles the gentleman thug] 25/11/2016 13:19

Some comment from chief strategist at IG Index:

UK housebuilders have been through a remarkable year. The fundamentals of the sector remain strong, with housing demand far outstripping supply. Yet we have seen the shares hammered; Berkeley’s share price is down by more than a third from its peak at the beginning of 2016. The overall backdrop is still encouraging. Data from the ONS confirmed that house prices rose by 8.4% in the year to August, an improvement from the 8% recorded in the year to July. So far, there is no sign that demand is beginning to drop off. Average house prices rose to £219,000 for August, up £17,000 year-on-year and £3000 month-on-month.

Berkeley Group is now remarkably cheap by historical standards. Its forward PE over the past five years has been 10.6, but the current figure is a lowly 6.1. Given the strong outlook for UK demand, with a significant deficit in housing still to be made up, it may well be that the company offers an interesting buying opportunity. The dividend yield of 8.2% is another attraction, which some investors may find hard to pass up.

Berkeley shares found key support at £22.30 in the period surrounding the Brexit vote. This is the same level they hit in early 2015. A drop into the beginning of November saw this area tested again. A rally needs to clear £26 and then move above the September high of £28, which would put it above the 200-day moving average once again. Further losses below £22.30 could see £21.40 and then £20.40 tested.