Crest Nicholson Share Discussion Threads

[dov] 29/3/2018 17:14

-3.3% it's the constant bad days compared to the others which I don't get. I have heard the reasons why they might be cheap but still do not understand the long underperformance reasons to its peers

[valuehunter1] 29/3/2018 16:15

Dov, agree totally frustrating to see the price action like this, patience required here but will come good one day.

[dov] 29/3/2018 15:55

And so we keep hearing, dirt cheap incredible value yet The market does not believe this clearly another -2.6% down with the exception of bovis this is one of the worst performers yet again !!

[valuehunter1] 29/3/2018 15:13

This has to be one of the best plays in the market alongside MGNS valuation wise imo. Mega low forward P/E ratio of 6 and a divi of 35.7p this year and 40.3p forecast for next year means we will be yielding 8% and 8.9% by end of next yr. Crazy valuation. Woodford piled in here and so am I.

[dov] 27/3/2018 09:32

And still Getting cheaper compared to the rest with its continued underperformance. Redrow 2.7% up could do with one of those days on here !

[pillion] 24/3/2018 01:03

Good find Speed

[speedsgh] 23/3/2018 12:34

Crest Nicholson shares still cheap, says Shore Capital -

Housebuilder Crest Nicholson (CRST) may have rallied in the past few days but the shares are still cheap, according to Shore Capital.

Analyst Robin Hardy retained his ‘buy’ recommendation on the stock after a short first quarter update that showed trading remains in line with expectations. The shares were down 2.9% at 453.8p yesterday.

He said Crest had been ‘by some margin, the weakest performing house builder in the last few months having reached a peak share price much earlier than the rest of the sector but then fell back peak-to-trough by almost 30%’.

Hardy believed the shares were ‘discounting something calamitous… [but] that does not appear to be the case’.

‘Our fair value for Crest remains at 540p, which is now 16% above the current share price,’ he said. ‘The shares have rallied in the last few days, helped by some material holdings being disclosed, but they remain cheap in our view.’

[1pvh] 22/3/2018 16:33

Thanks very much for the feedback. I've just bought back the shares I sold on strength this morning!

[1gw] 22/3/2018 15:50

Yes, I have to say the mood at the informal parts of the morning was pretty upbeat. A bit of an end-of-term feeling actually given the personnel moves (various directors retiring or, in the case of the CEO, moving "upstairs").

But some things I had mentioned to me, apart from the LTIP hint above, were:
- market focuses on interest rates but we look at employment rate;
- based I think on some industry (rather than Crest-specific) data, this spring selling season (newbuilds I presume) is shaping up really well;
- although help to buy accounts for quite a high % of Crest sales, a lot of these would probably happen anyway even if help to buy were withdrawn (i.e. "net" impact is nowhere near as big as the "gross" figures suggest) - one director said Crest's most popular unit under help to buy was (something like) a 3-bed (semi?), ie the implication is that buyers are using help to buy to get something bigger than they otherwise could afford and if help to buy weren't there they might just set their sights a little lower;
- there has in fact been talk of extending help to buy until 2027 anyway (post-meeting I googled this and could find some references to both Labour mentioning 2027 in their 2017 manifesto, and the additional sum of money announced by the tories around the time of last year's budget also equating to about 2027 - links below).

So all in all I came away feeling pretty good about my investment here.

(Errors/misunderstandings excepted)

[1pvh] 22/3/2018 15:16

Hi 1gw. I live up North and wasn't able to attend today. I spoke to the FD a few weeks ago and he seemed reasonably upbeat. Overall did you like what you heard?Thanks

[1gw] 22/3/2018 13:33

I chatted to various directors after the AGM about the relative share price underperformance. One opinion expressed was that perhaps Crest is falling between the stools of "income" and "growth" and that this makes it relatively difficult for the market to price. That is perhaps consistent with my observation in the post above.

I did specifically bring up the pbt per share point and got referred to the remuneration plan in this year's AR (the LTIP on page 90). That has an eps "target" of 85.3p for FY20 ("threshold" of 82.0p and "maximum" of 92.0p). i.e. they have listened to the feedback on the apparent lack of stretch in the targets in the FY16 report and have gone for more stretching targets this time.

You can work out for yourselves what the p/e is on that FY20 target.

[1gw] 22/3/2018 09:15

I suspect a good part of the relative underperformance over the last year comes down to those pbt per share growth numbers. It was a big step change from the actuals of FY14-FY16, to the remuneration plan numbers (in the FY16 annual report) for FY17-FY19.

It may in large part just have been a mathematical consequence of the lower % pa revenue growth target over FY17-FY19, but perhaps a relative growth premium came out of Crest's shares as a result.

[master rsi] 22/3/2018 08:37

Everything rosy as it could be and share price moving forward now

"In line with expectations, total forward sales contributing to the current financial year, including completions year to date, at £620m are 15% higher than the £541m achieved at the same point last year; cumulative open-market forward sales revenues (excluding PRS) of £342mm are 10% higher. The Company's expansion of the Chiltern and Midlands divisions continues with the current number of sales outlets, at 55, some 12% higher (2017: 49) and further outlet openings planned over the coming months."

[1pvh] 22/3/2018 07:43

Very similar statement to last years AGM. With in line forecast of increase in sales. Think they have to be decent mid term value at these levels on a historic yield of over 7% and little or no debt and a large land bank.

[hooley] 20/3/2018 09:45

Based on the a/cs there is nothing sinister in them. The sell off following the xd last week wasn't unexpected, but deeper than justified. We could be in for a spearhead bounceback to 500p. Unlike the other builders, CN is categorised as a Estate stock for a reason I can't fathom.

[dov] 20/3/2018 08:06

like to think that might be the reason but i doubt it!!

[eggbaconandbubble] 20/3/2018 07:32

RNS. Is that the answer - price forced down so that Blackrock can scoop up a load more!

They must think the future is all bricks and mortar!!!!!

[stemis] 19/3/2018 15:48

The share price divergence with other housebuilders seemed to occur in June around the time of the interims.

There's an article dated 23.3.17 from IC comparing housebuilders.



I've looked at a few and share price movement since then is

BVS + 28.4%
PSN + 20.2%
RDW + 19.6%
TEF + 18.6%
BWY + 8.9%
BDEV - 2.8%

and CRST?

CRST - 20.4%

[hooley] 19/3/2018 15:36

No evidence of shorting bar one of just over 1% Henderson Global a fornight ago. B/s shows bwg ratio of just 35%. Big investment in land last year which gobbled-up cash flow. Now has 5 years of land available.

[dov] 19/3/2018 14:55

salpara111

I have been banging on about this for months this has underperformed others for a long time now. This smells wrong the recent share sales by directoes seem inspired we are told by the management everything is on track on the good ship Crest but the share price is saying something different going down consistently.I am expecting an on track statement AT THE agm but not a convincing market response

[salpara111] 19/3/2018 09:55

Have to say I am very uncomfortable.
Crest has substantially underperformed the housebuilder sector to the point that I am beginning to wonder if there is something specifically wrong that we are not aware of.
I guess I will continue to hold for the moment as the current share price has already priced in a fall in profits.

[dov] 19/3/2018 09:27

most of the builders not moving much today,but crest over 3% down thats 8% or so since Fridays opening this is getting ugly. £4 before thursday?

[dov] 18/3/2018 16:10

unfortunately so true.