Berkeley Share Discussion Threads

[raffles the gentleman thug] 10/1/2017 18:41

Thanks Phoenix ... hadn't been following that at all. Shares in my opinion still stupidly cheap. I mean given over £3bn of the enterprise value is covered by profits arising within next five years you are effectively only paying around a residual £800m to £900m for the best managed company in the sector.

[jrphoenixw2] 10/1/2017 18:34

BKG Market Capn £4,107.08 today [per Digital Look].
In the FTSE-250 only Weir Group [4,344] and Scottish Mortgage IT [4,524] are larger.

At the bottom of the FTSE-100 Capita [3,459], Intu Propts [3,793] and Dixons [3,972] are below BKGs capitalisation.

If the indices 1/4ly reshuffle were today, BKG might be a candidate for promotion. Maybe something to keep an eye on?

[red5] 10/1/2017 17:17

Yeah I saw that article too

[tonytyke2] 10/1/2017 16:15

Simon Thompson's latest column in the Investors Chronicle this week tipped buying a 'handful' of house builders which included mentioning BKG. Looks like he is expecting the sector to follow a tendency to rally in the first quarter. Good article.
TT

[ayl30] 09/1/2017 14:06

More of a shame that despite the poor performance he took £9m from the firm last year!

[jrphoenixw2] 09/1/2017 14:04

Such a shame lol, from today's Times:

'Crispin Odey has begun to shed staff after the billionaire hedge fund manager’s investments suffered the worst year in his firm’s history, losing nearly half their value as bets on a market collapse failed to come good. He said that Odey Asset Management had made redundancies after a torrid 12 months in which its main investment fund fell by 49.5 per cent.'

[jrphoenixw2] 09/1/2017 10:01

I'm surprised we haven't seen more pre-fab new-build too. For reasons such as it's climate-controlled production line approach it has it's virtues.
The kind that's best known in Germany [IME] is produced by Huf Haus. You'll find their entry on Wiki, and can see many examples on Google/Images. As is thus clear they are a veeery long way removed from the UK/1960s concept of prefab housing.
Huf Haus have and do export to the UK market but IME they're still rare to see. That could be because the specialist labour to prepare the plot, services, and complete the build-out does not yet exist in a wider viable form.

[dr_smith] 09/1/2017 09:21

Thank-you Raffles.
Two points of interest.
1. Unsold homes. This is projected. So more homes built than sold in previous period, but that's not to say the 10,000 won't sell - it is a big assumption.
2.Modular construction. I have been wondering when we would see it.
With labour shortages and economies of scale I am surprised we haven't seen more of this. I have only seen it on TV for up-market properties built in likes of Germany.
Given UK weather, off site building is another bonus.
I don't know how this technique favours prresumably wood built (inner?) homes and how this sits with building / fire regs where brick/concrete is typically required.
Still, interesting new direction (since prefabs of old).. atleast in UK if it's mainstream.

[raffles the gentleman thug] 08/1/2017 22:50

London property downturn sees Berkeley target Birmingham

High-end builder’s new division to take part in ‘large-scale regeneration’

Luxury London housebuilder Berkeley Group is looking to the English provinces as a source of future growth as the market for high-end properties in the capital undergoes a downturn.

It has opened a new division in Birmingham — its first venture outside London and the south-east in more than a decade — as the Brexit vote and tougher property taxes cool prices of luxury London homes.

In a market that has been driven higher by international investors, average prices for prime properties in the capital have dropped an average 12.5 per cent since the 2014 peak according to Savills, the estate agent. Gloomy sentiment has pushed Berkeley Group’s share price down by a fifth in the past year, causing it to drop out of the FTSE 100 index in 2016.

The new division is a departure from the group’s strategy since 2005 of focusing purely on London and the south-east, although historically it has built homes in cities across the country including Birmingham.

“Birmingham is on the rise, with a can-do council that seems keen to encourage development,” said Rob Perrins, chief executive of Berkeley. “We want to bring a distinctive approach to the local market.”

He said the new division would develop homes including family housing, affordable homes, luxury homes and student accommodation, using “our expertise in large-scale regeneration”.

It will be headed by Angus Michie, chairman of the group’s St Edward business — a joint venture with the Prudential insurance company that focuses on high-end luxury homes, including a flagship development on the Strand in central London.

Anthony Codling, analyst at Jefferies, said: “There is a view from some investors that having all your eggs in the London and the south-east basket is a double-edged sword, and it’s swinging one way at the moment. It can potentially be viewed as a negative.

“[In the West Midlands] they have identified areas that fit their current product mix and where the demographics are similar to areas they know and understand.”

A person close to the company said the Birmingham move did not represent a reduction of its business in London and the south-east, where all of its land bank is currently located.

Berkeley’s move comes as an oversupply of new-build apartments in the capital is looming, according to documents from researchers at Molior London seen by the Financial Times.

Their research shows that the number of construction starts of new homes in inner London have been higher than those sold since 2012, resulting in an estimate of more than 10,000 unsold units by the end of 2016.

Berkeley said in December that its sales reservations had dropped by a fifth since the UK voted to leave the EU in June. It also amended a planned five-year dividend policy in favour of an enhanced share buyback programme to return more value to shareholders. It said most of its recent land purchases had been in outer London and the home counties, rather than the faltering inner London market.

The group’s strategies are closely followed in the market, thanks to the reputation of its chairman and former chief executive, Tony Pidgley, who successfully weathered storms including the 2008 financial crisis.

The group has also said it will focus on modular construction, sometimes known as prefabrication, and last year launched a house design that can be largely built off-site and then completed on site within 14 weeks.

Berkeley previously operated in Birmingham after buying the Manchester-based housebuilder Crosby Homes. Its projects there included the residential elements of Brindley Place and the Mailbox, two city-centre regeneration schemes, but it sold the Crosby business in 2005.

[garycook] 05/1/2017 01:15

What happened to BKG then ?

[jrphoenixw2] 04/1/2017 14:14

News this lunchtime [Telegraph], intra-day on the markets

'UK housebuilders rally as Deutsche Bank signals 30pc upside
...UK housebuilders are among the top performers today after Deutsche Bank signaled 30pc upside across the sector as a whole and maintained its positive stance on the industry.
Analysts at the bank said: "While recognising the sector trades relatively homogeneously (and our buys reflect relative preference rather than a negative view of the others), we maintain our buys on Taylor Wimpey, Barratt and Berkeley Group. We add McCarthy & Stone to that list upgrading the recommendation to Buy seeing strong value.
"We have downgraded Bovis to Hold reflecting the continued operational stutters which have impacted confidence in forecasts."
Barratt Development ticked up 3.2pc, Persimmon is 2.8pc higher, Taylor Wimpey added 2.3pc and McCarthy & Stone jumped 3.9pc. '

[jrphoenixw2] 02/1/2017 21:49

No probs, I too missed it at the time and it took me a while to figure out WTH was going on and the rationale for it.
As you've seen, I'm now content that the near-term change/uncertainty will serve a productive longer term purpose.

[sogoesit] 02/1/2017 17:12

Thanks for feed-back jrphoenix. I missed the dates/timing in the last results so stand corrected.

[jrphoenixw2] 02/1/2017 10:50

I suggest you go back in this topic to when [2-Dec IIRC] they changed their near-term div policy.

Next div will be announced in Feb and payable in March. Div will be net of buy-backs which they'll publish in Feb. They're not going to give a running commentary on the status of buy-back activity as that would undermine it's value as a large but invisible er, 'wand', with which to hopefully give the shorters a thorough shafting.

They'll calc the div payment simply by deducting the cost of buy-backs from the regular 100p div. I'm in no doubt they'll provide a forensic break-down for it's calculation.

It might not be a one-off, we'll see. Keep in mind that being short, in general, might be considered an expensive gamble. You're 'writing'/paying the div + paying fees to borrow the stock. In addition to that, BKG are now wielding the Great Bear Bashing-stick over them. I would NOT want to be a shorter in the face of that.

p.s. One could consider the above as reducing the div in the near-term. I tend to look at that reduction as probably being compensated for by an increase in share price.

[sogoesit] 02/1/2017 09:54

February? Normally we get a payout by end January (50% of the £2)... but no word to date. No reported buy-backs either.
We are above the recent trading range but who knows how they will determine between value of buy-backs or cash payout. Would hope for some indication this month. Unlikely we would see a "one-off" buy-back or am I wrong?
Short positions still reported at 2.89%.

[cancun tango] 23/12/2016 15:24

Sunningdale sale: former national school of government sold for developmenthttps://www.gov.uk/government/news/sunningdale-sale-former-national-school-of-government-sold-for-development

[phoenixw2] 16/12/2016 12:55

In light of the above, re: a statement in Feb-17 regarding the div payable in Mar-17.
This is a filenote I have from earlier this year.
---------------------------------------------------------------
'The Berkeley Group Holdings plc
[date 25/2/16]
FINANCIAL CALENDAR
The Berkeley Group Holdings plc today announces the intended dates for its 2016 financial calendar. An Interim Management Statement will be issued on Friday, 18 March 2016'.
-----------------------------------------------------------------

The announcement date^ was the 4th Thursday of Feb. The equivalent date in 2017 is 23rd-Feb. FWIW maybe that's when we'll find out what kind of cash divi we can expect...

[raffles the gentleman thug] 16/12/2016 10:59

True gary true ... still liking this name big time - cheap in absolute terms and mis-valuation within sector. Though confused by timing of share buybacks

[garycook] 15/12/2016 13:26

RGT,Look what Buy backs have done to HSBC,s share price since they started !!!

[raffles the gentleman thug] 15/12/2016 12:12

Anyone know when the buybacks gonna start - they already have over £200m earning squat open the balance sheet, and need to kick on whilst shares remain cheap

[phoenixw2] 15/12/2016 12:10

Cheers Gary, that change passed me buy, and/or I forgot to amend my records accordingly.

[garycook] 15/12/2016 11:52

phoenix,If you read the last update from Dec 2.It clearly states that Dividends will now be announced in Feb,and Aug,and paid in March and Sep,because of the buy back program.

[phoenixw2] 15/12/2016 10:21

At time of writing BKG is -8p intra-day, despite going ex-div today for a pound. That % fall seems about par for the course today across the house-building sector.

Can anyone spot an error in this apparent contradiction? Thanks!