Persimmon Share Discussion Threads

[davius] 12/1/2018 16:15

Whatever. I bought more after the drop.

RSharman, profit taking after recent strength I think. The shares have been quite volatile but with dividend and special dividend payments they tend to run up towards these.

[minerve] 11/1/2018 13:50

Boycott this share if you have any conscience and sense. Director payouts here are NOT in the interests of shareholders and DO NOT reconcile with the rest of society.

The CE, Mr Fairburn, if he had any moral grounding and sense of duty to shareholders would act like a gentleman - not let gluttony rule is head - and refuse the bonus of circa £110m.

That money could be put to better purpose within the company, distributed better amongst shareholders or used to improve product and service for customers!

The economic cycle and government policy will not always be as favourable and it isn't prudent to be wasting valuable resources on such bonuses which are not deserved!

Shame on you Mr Fairburn and the rest of your executive team!

Resignations by the remuneration committee are not good enough and should not be closure on this matter!

Please join me and put this share on your blacklist.

Thank you, respectfully

Minerve

[rsharman] 11/1/2018 08:34

So why the heavy fall back over last couple of dayside?

[davius] 09/1/2018 11:43

Another excellent update from one of the stars of my modest portfolio. £1.3bn in cash, sales up, buildings up, profits likely to be ahead of consensus estimates. Happy to hold for dividends, special dividends, and ongoing growth.

[sharesoc] 17/12/2017 20:11

There is a blog post on Persimmon directors available here:

[dondee] 15/12/2017 14:27

Should have read PSN.

[dondee] 15/12/2017 14:24

Pen boss leaves over pay dispute allegedly!

[dr_smith] 09/11/2017 15:25

Cheers IOMhere
- I'm not a Doc, middle name Russell. :-)
I see from HY results 30/6/17


The Group acquired a total of 9,319 new plots of land across 47 sites during the period, including 3,308 plots in 16 locations converted from our strategic land bank.
The Group’s land spend was £369 million in the first half of the year (2016: £305 million).
-----------------------------
9319/2 = 4660 plots in a quarter, so 5526 is 18.5% more for less spend (£147m versus 369/2 = £184.50).
Alarms bells rang for me on odd phrasing of land bank health, but with above sum, and bearing in mind development phasing etc will distort, I wouldn't say I am clear now, but no longer alarmed.
IMO DYOR :-)

Dave.

[iomhere] 09/11/2017 13:37

Dr Smith
I concur with your view in that its strategic land bank is land without planning permission. When councils approve any 'strategic' land for building PSN can claim it as an asset.

[dr_smith] 08/11/2017 13:32

Thank-you bigbertie.
Yes agree re no direct correlation between £ and plot numbers.
Wasn't so much after cost per plot, but it seems odd to me that figures are given inclusive of internal costings but the net external landbank cost and change is skipped over.

[bigbertie] 08/11/2017 12:45

It sounds to me as if the £147m is the cash outflow on land in the period - ie not directly related to the 5526 plots. Some of the £147m relates to land they already own but have not yet paid for (the deferred land creditors). likewise some land bought in the period will not have been paid for yet. So you can't calculate cost per plot from those numbers IMHO. There could even be a deferred amount payable on strategic land if / when it gets planning permission, but I don't know if they do that - it could have more details in the annual report but I haven't looked (I sold the shares recently).

[dr_smith] 08/11/2017 10:17

Q3 trading statement extract:
------------
Management has continued to pursue new land opportunities on a selective basis. The Group acquired a total of 5,526 new plots and spent £147 million, including payment of deferred land creditors, during the period. Of the new plots acquired, 48% have been converted from our strategic land portfolio. We anticipate that the Group will achieve strong strategic land conversion over the next couple of years as local authorities complete their plans to identify sufficient land to meet the assessed housing need in their local communities. Management will marshal the Group's cash resources to ensure these reinvestment requirements are adequately supported.
-----------
Re: "48% have been converted from our strategic land portfolio."
Anyone know what this means?

Perhaps land without planning permission held in one PSN group parent/subsiduary is transferred to a group subsiduary following planning permission - or completion of a speculative option purchase?
Has land bank increased or perhaps depleted following an internal book transfer of "land" into planned plots.

Are the new plots, real new plots or plots/land they had before but without planning permission? 5526 plots for £147m = £26,601 per plot average.

[sogoesit] 03/11/2017 07:07

From Shares Lead article 02 November:
ARE HOUSEBUILDERS BUILT ON SOFT FOUNDATIONS?
A rally in the housebuilding sector on expectations of further
state support in the Budget on 22 November is coming to a juddering halt amid sceptical analyst comment, a slowdown in mortgage approvals and data which reveals the perilous state of Government fi nances.
Investors have to decide if the housebuilders can continue to grow
earnings and cash flow regardless,
supported by an ongoing imbalance between supply and demand of housing stock.
If so, investors might start weighing these companies based on earnings per share and dividend yield rather than the tradi onal measure of price to net asset value (NAV).
The housebuilders are a case in point of why it can be a mistake to focus just on one valua on metric when considering an investment.
On a price-to-earnings basis, and despite a strong run, they con nue to trade at a discount to the wider market at an average of just over 10 mes (FTSE All-Share around 15 mes) but based on price to NAV these shares are, for the most part, as expensive as they have been at any point since the fi nancial crisis.
WHAT ARE THE MAIN CONCERNS?
In a report published on 30 October, Barclays Capital expressed concerns about the sector’s valua on, highligh ng a risk that Government schemes to encourage home buying might disappoint, as well as outlining worries about skilled labour shortages.
‘One of Britain’s biggest ever post-elec on surveys revealed support for the Government at its lowest among the young. Ahead of the Autumn Budget, we believe one key tenet (“inter-genera onal fairness”) will be front and centre,’ it says.
‘Although measures could be impac ul, history
suggests that they can lack teeth (solving our “broken” housing market is not easy) and we believe expecta ons may have run ahead of themselves.
‘This, together with strong share price performance – our housebuilder index is up 46% year-to-date (versus the FTSE 250 up 10%) – leads us to downgrade Persimmon (PSN) and Berkeley (BKG) (from equal weight
to underweight) and Redrow (RDW),
Bellway (BWY) and Taylor Wimpey (TW.) (from overweight to equal weight).’
KEY CONCERNS
Investors owning housebuilders’ shares should think about what Brexit may eventually mean for demand, plus consider if house prices are ge ng too high (and therefore out of reach) for many poten al buyers, even when factoring in help from various Government schemes.
An expected rst increase in interest rates in more than 10 years at today’s Bank of England mee ng (2 Nov) is another factor to consider, as the increased cost of mortgages could poten ally reduce demand for new build proper es.
A VOLATILE SECTOR
Shareholders in this sector have endured considerable vola lity in the last 10 years as the nancial crisis and the Brexit vote wiped billions o market valuations.
Housebuilders’ balance sheets are in much be er shape to survive a downturn this me round. However, earnings and cash now remain sensitive to fluctuati ons in the wider property market and the ability to sustain profitability at current levels could be constrained by increasing labour and raw material costs.
History suggests it would be a mistake to expect the current favourable condi ons in the sector to con nue inde nitely. (TS)

[davius] 01/11/2017 13:31

Classic "it happened before so it will happen again" chartist nonsense. The problem with that kind of assumption is that it takes no account of how things move on, situations like the regular special dividend handing cash back, and outside influences such as government policy or how the housing market is performing.

The company has shed loads of cash, a decent yield, continues to grow and is committed to returning further capital to shareholders.

My average in my ISA is £16.17, I really don't care what this does in the next couple of weeks or months, as long as they keep making money and paying me dividends.

[mr woodentop] 01/11/2017 13:22

does he not understand 'help to buy'?

[ali47fish] 30/10/2017 17:47

anyone cares to comment on this fool suggesting psn as a sell please!

Why I’d dump Persimmon plc and buy this ‘expensiveR17; stock instead-Persimmon a ‘sell’.G A Chester | Monday, 30th
October, 2017 | More on: LOK PSN


Housebuilders have been one of the great investment plays since the 2008/09 recession, delivering huge rises in share prices and masses of dividends. However, housebuilding is a highly cyclical boom-and-bust industry and current valuations suggest to me that it’s time to be fearful when others are greedy.
The table below shows some data at annual results dates for FTSE 100 housebuilder Persimmon (LSE: PSN) going back to the years before the last crash.
  Market cap (£bn) Book value (£bn) Net profit (£m) P/B P/E Operating margin (%) Share price (p)
27/2/2017 6.26 2.74 625 2.3 10.0 25 2,030
23/2/2016 6.24 2.46 522 2.5 12.0 22 2,029
24/2/2015 5.06 2.19 372 2.3 13.6 18 1,650
25/2/2014 4.46 2.05 257 2.2 17.4 16 1,463
25/2/2013 2.72 1.99 170 1.4 16.0 13 898
28/2/2012 2.13 1.84 109 1.2 19.5 10 705
01/3/2011 1.36 1.74 115 0.8 11.8 8 452
02/3/2010 1.28 1.62 74 0.8 17.3 4 424
03/3/2009 1.13 1.56 (625) 0.7 n/a 11 375
26/2/2008 2.28 2.35 414 1.0 5.5 22 760
26/2/2007 4.41 1.84 396 2.4 11.1 21 1,473
27/2/2006 4.17 1.69 345 2.5 12.1 23 1,416
As you can see, before the last housing crash, Persimmon was posting record profits, operating margins were in the cyclically high 20s and P/Es were temptingly ‘undemanding’. But the share price had almost halved, even as it was reporting a record net profit of £414m in February 2008. And halved again by the time it reported a £625m loss a year later.
As you can also see, the ideal time in the cycle to buy is when operating margins and profits are depressed, P/Es are high (or off the scale, as at the time of the £625m loss) and P/Bs are below one, indicating a discount to net assets.
However, we’re now back to top-of-the-cycle operating margins in the 20s, record profits, undemanding P/Es but high P/Bs. In fact, at today’s share price of 2,800p and incorporating H1 numbers, the operating margin is 28% and the P/B is 3.2 — unprecedented highs.
I don’t believe “it’s different this time.” And with UK personal borrowing at its highest level in history, interest rates set to rise, and house prices already falling in London, I see substantial downside risk. As such, I think the time has come to switch to rating Persimmon a ‘sell’.

[sogoesit] 26/10/2017 08:19

Thanks glanthorpe. I had Galliford on my watchlist but haven’t followed up. Will take a look at Crest. Telford is also a lower house price builder I think.
Who are the buyers? 4 million immigrants in last decade, maybe?

[ganthorpe] 25/10/2017 08:43

Hi Sogo. If you are looking for yield from builders I suggest you look at Galliford or Crest Nicholson . The politicians are talking utter rubbish about 250000 new homes a year with skilled labour already very short and completions nowhere near 250000 it would take at least 5 years to get anywhere near. Besides which where are the buyers with the funds to buy all these extra homes? It would have to be BTL or social housing on a big scale Corbyn ?

[sogoesit] 24/10/2017 10:28

HSBC today raises TP to 3078 (very precise!) from 3000 - BUY rating.

[sogoesit] 23/10/2017 10:46

At 2860p the running yield is now 3.85%.
I have house builders for income and my threshold is around 6% yield to buy.
Is the market expecting increased payouts or is this becoming relatively over-valued?
Highest broker view I can find is 2800 “Overweight221; by JP Morgan on 29 September.
Any views?

[davius] 19/10/2017 13:02

You need some ointment. Sellers don't simply up their price because someone admits to being a first time buyer. What nonsense.

The reality is that FTBs usually go for smaller properties, which are often sold by those moving on into newer houses.

There's a shed load of building going on where I live, 3000+ houses, virtually none are sold to FTBs.

[itchycrack] 17/10/2017 10:20

Even if FTBs were to pay ZERO stamp duty it would make no difference as sellers would simply increase the selling price for the exact same amount! Happens every time, as history has shown. You cannot solve the housing 'price' problem with this type of flawed policy - it has the exact opposite effect! Just insane!

[nick100] 17/10/2017 09:07

U.K. Housebuilders May Be Active After Report of Stamp Duty Cut
By Aleksandra Gjorgievska
(Bloomberg) -- U.K. housebuilders and estate agents may move after Evening Standard reported a big cut in stamp duty for first-time buyers is being considered for next month’s budget.
“The plan is worth thousands of pounds to hard-working young people struggling to get on the property ladder,” Standard said
Prime Minister Theresa May’s conservative party earlier this month announced a 10-billion-pound extension to the “Help to Buy: Equity Loan” program
Watch Barratt Developments, Berkeley Group Holdings, Countryside Properties, Foxtons Group
Homebuilders may also be active after Bellway reported results; the company forecast volume growth of at least 5% in new financial year, subject to market conditions

[davius] 10/10/2017 16:56

Persimmon doing well, single handedly pushing my ISA along very nicely indeed.

Plenty of press coverage recently re the green paper I mentioned a couple of weeks ago, and the various party conferences all sounding positive too, with the government coming up with yet another plan to increase house building in the UK.

The only negative I can see is that the share price is getting to look a bit "toppy". I'm holding for the time being.