Crest Nicholson Share Discussion Threads

[essentialinvestor] 18/10/2018 12:58

Any take out price would be well over NAV, so not sure how likely that is.

Any directors adding ?.

[montyhedge] 18/10/2018 12:53

Merge cut costs, come on Pidgley 425p is a bargain.

[salver2] 18/10/2018 11:26

If I was Berkeley homes I would seriously be thinking of buying this and chucking out the useless management!

[lonrho] 18/10/2018 11:23

Well none are as downbeat as crest, guess if there is a downturn the builders will look to merge to cut costs and realise synergy benefits.

[jonwig] 18/10/2018 11:13

I think 'hillofwad' has a point, and I'd guess he's a property professional, but some features of the accounts are so subjective that it can be slow work to iron them out. (Depreciation, external valuations, etc.) Cash flow is, or should be, a different matter.

Are takeovers likely in this market, when housebuilders' shares are pretty downbeat?

[montyhedge] 18/10/2018 10:54

Analysts saying bid target that will do boys.

[rcturner2] 18/10/2018 07:49

Good discussion on this thread.

Point to note is that they are still making healthy profits! It's not as if they have suddenly turned loss making. The dividend is covered, why should the cut it? Their stated ambition for next year is the same level of profit as this year. That may not be achieved of course, so you are getting a very healthy discount to take that risk.

[hillofwad] 18/10/2018 06:47

The problem with Crest is that they never meet forecasts .Poor budgeting doesn't augur well for a housebuilder. It's clear that their senior executives are cut from a different cloth from their peer group

Headless chickens. Their recent opening of a Midlands office late into the party buying oven ready sites from other developers smacks of desperation .The smart money already made their money from land deals Suspect that the OMV of these are well below BV

Let's face it in Crests's patch all you had to do was turn up in recent years

£170 -190m is not a bad result considering times have changed



However ,the fact that they have posted a £20m spread so close to year end sounds to me they don't have a clue what is going on

[1gw] 18/10/2018 06:02

I think you can argue a lot of this is just the consequence of moving upmarket. They benefited earlier when it helped them increase their revenues and profits so impressively, but now they're suffering the consequences. As we saw with the earlier brexit-related pause that they took, slowing down on land purchases should do good things for the balance sheet.

[dov] 17/10/2018 21:58

I said this a long time ago and you can check my many posts. when the price was over £5 and this share was grossly underperforming other House-builders I said there was something not right. I completely blame the management they took their eye of the ball a long time ago and compared to others they are suffering badly now .These will continue to sink £2.50 next target by Results time unfortunately

[horndean eagle] 17/10/2018 21:41

I had thought there was scope for a profits warning. Its a bit harsher than I thought we would get but on the flipside they are cutting back on growth and running the business for cash. Should help the balance sheet which in the coming year should have a reasonable amount of net cash. They were going on about strategic schemes going forward and that the government had given registered providers a huge slug of money to put to work. If they can grab some of that then it will help insulate problems elsewhere. The key here is CRST is not going bust. Doesn't have meaningful debt and is trading around book and on a p/e of 5-6. People might complain house prices are too high but if they fall then land prices will fall with it and so will build cost and so will section 106 contributions. It tends to balance itself out.

[minerve] 17/10/2018 21:15

Porsche1945

>actually he runs three, none of them very well. perhaps if he stopped sticking >prothena allied minds and purp bricks into everything they wouldnt have been such a >total disaster, his problems made worse by heavy redemptions so had to sell anything >half decent and liquid like Astra to pay out and so left with value destructive cxxp >like crest, do you really think for a moment they will be paying a 9 per cent div >going forward?!! get real.

I don't know where Crest will go with their dividend but other housebuilders are yielding 9% and can continue doing that through a 2007/2008 scenario - still covered. They don't need rising house prices to do it either.

Crest is one of many housebuilders Woodford has got. I can see his rationale for including them in his portfolio and I have done the same although not to the same degree.

[essentialinvestor] 17/10/2018 20:05

I'm in Weybridge where Crest started life, and the housing market
has slowed considerably. It's not just Brexit uncertainties, it's affordability
and stamp duty also.

I would be surprised if they make revised guidance,
although agree someone else may see some value.

[salver2] 17/10/2018 19:45

The reality is despite the warning the shares on revised forecasts are on a yield of over 11 percent and a pe of less than 6 - if these figures are to be believed- as management have clearly been asleep at the wheel and with the possibility of a predator the shares look very undervalued

[riskvsreward] 17/10/2018 18:36

so far Woodford got the macro/big picture wrong. his thesis was that Brexit is good or neutral to UK economy so he was buying huge in multiple builders and other consumer stocks. crst is only one of his many losers. he may not have seen the bottom yet if Brexit gets worse.

[porsche1945] 17/10/2018 17:24

actually he runs three, none of them very well. perhaps if he stopped sticking prothena allied minds and purp bricks into everything they wouldnt have been such a total disaster, his problems made worse by heavy redemptions so had to sell anything half decent and liquid like Astra to pay out and so left with value destructive cxxp like crest, do you really think for a moment they will be paying a 9 per cent div going forward?!! get real.

[minerve] 17/10/2018 17:10

Porsche

Woodford runs a huge fund. He doesn't have the discretion of buying all the stock he needs in a day like we do - well, very rarely. He has to do it over time. What is important is his average buy price. If it is delivering 9% income that compounds within the fund and could have been used for purchase of other shares or payment of redemptions - removing the need for forced sales and improving portfolio performance.

[essentialinvestor] 17/10/2018 15:48

Not a Neil fan, eh.

[porsche1945] 17/10/2018 15:45

Another " Woodford Winner ", they said people started to unload these when they saw him buying as he has an uncanny knack of buying utter UK dross and dogs, he started buying into these at 5.40 so has managed to lose nearly half his investment in 12 months, 9 per cent yield (haha) to blow 50 per cent capital, and these idiots actually charge for that service.

[montyhedge] 17/10/2018 13:56

Must be mergers in the industry.

[minerve] 17/10/2018 13:24

Actually it is 2.38% of my portfolio. :)

I will not be adding any more.

[essentialinvestor] 17/10/2018 13:24

Hi M, Redrow would be my sector choice fwiw, not holding any atm.

[minerve] 17/10/2018 13:23

Essential

You are right to be cautious. I wouldn't go throwing all my money at Crest, but as part of a balanced portfolio I think it is worth investing at these levels. No more than 3% here for me but I do have other housebuilders/suppliers.

[essentialinvestor] 17/10/2018 13:14

Called this a value trap on a number of occasions, so think my view is
on the cautious side. We are already seeing tougher trading and reduced
guidance. That could easily get worse. There is a big difference though between that and
2008/9.

[minerve] 17/10/2018 13:12

Porsche1945

House prices are still rising, albeit the growth has slowed. Even the area recording a fall, London, hasn't fallen by that much recently. I think sensible investors know that house price inflation is nearing its zenith, but builders still have excellent margins, cash flows, forward sales, benign land pricing and huge demand. HTB is around for the forseeable future whether you hate the scheme or not. There is value here and if you buy builders throwing 9% yields closing in on NAV you get reasonable protection. I personally would rather invest in Crest today than Netflix. But that's just me.