Persimmon Share Discussion Threads

[brucethegoldfish] 02/2/2023 18:04

PSN up 30% since it’s recent lows.

Would love to know from Sikh what he thinks is driving that?

[winner31] 02/2/2023 17:52

That seems to have shut him up for a while 😁

[beckers2008] 02/2/2023 12:51

Bank of England Base Rate hits 4%

by Neil Patterson

12:24 PM, 2nd February 2023, About 10 minutes ago

The Bank of England Monetary Policy Committee (MPC) today voted by a majority of 7–2 to increase the Base Rate by a further 0.5% to a post credit crisis high of 4%. The two dissenting members voted to freeze the rate at 3.5%.

The US Federal Reserve yesterday increased its rate by only 0.25%, so this may strengthen Sterling in the currency markets and further weaken imported inflation.

With current inflation still running well above the 2% target at 10.5% the Bank of England predicts rates to level out at 4.5% by the middle of the year and fall back to 3.25% in the next three years.

Inflation is likely to have peaked
The Bank of England summary reported: “Global consumer price inflation remains high, although it is likely to have peaked across many advanced economies, including in the United Kingdom. Wholesale gas prices have fallen recently and global supply chain disruption appears to have eased amid a slowing in global demand.”

Although most major economies’ central banks are still tightening monetary policy the inflationary outlook would indicate that this will ease off in the coming year further reducing the need to shore up Sterling by increasing domestic rates.

Interest rates are expected to start to bite after lag period
The Bank goes on to report: “UK domestic inflationary pressures have been firmer than expected. Both private sector regular pay growth and services CPI inflation have been notably higher than forecast in the November Monetary Policy Report. The labour market remains tight by historical standards, although it has started to loosen and some survey indicators of wage growth have eased, alongside a gradual decline in underlying output. Given the lags in monetary policy transmission, the increases in Bank Rate since December 2021 are expected to have an increasing impact on the economy in the coming quarters.”

Certainly, this would indicate the markets have stabilised after the Truss Premiership and that predictions of 6% plus interest appear for now to be off the table.

BOE base rate at 6%?
Absolutely no chance.

[shanig] 02/2/2023 12:50

Knock the very high inflation rate out of our everyday lives has to be the priority plus the gradual weaning off cheap money will all help going forward.

[sikhthetech] 02/2/2023 12:38

BoE puts up base rates to 4%.

That's another £30-£50 per month added to mortgage payments for those not on fixed rate, making affordability even worse.


Thousands coming off previous fixed rates will also need to find hundreds extra every month.

[beckers2008] 01/2/2023 20:38

s,

A busy BB is sometimes a red flag to II's, but as 'Sikhthetech' is endlessly copying and pasting BS, it is getting laughed at.

PSN share price is recovering and forming a base where any reasonable sector news will provide a caterlyst.

GL.

[scobak] 01/2/2023 20:11

This has become (tediously)the 'Sikhthetech' thread.
I would certainly like a different serious thread which is about Persimmon.
Unfortunately for months I have clicked on this thread and zapped straight to the bottom having seen the main 'contributor'. I had thought this would have blown out by now but looks like it will persist so I must reluctantly vent my views.

[beckers2008] 01/2/2023 16:46

w31,

Don't engage with the trolling village idiot 'Sikhthetech', it has made predictions for over 4 years and has been proven wrong by the resilient housing market year after year, lol!

Not sure why it's here, it must have lost big time when it started trolling here in October 2018, lol, just lol!

[winner31] 01/2/2023 16:38

Don’t know what your saying but i’m Sure it’s very interesting. yawn

[sikhthetech] 01/2/2023 15:37

winner

How many buyers have delayed buying a home and so HBs lost in those 4 months?

Hundreds of millions of pounds of lost revenue.

Given Help to Buy ended only 3 months ago and it provided 20%(40% in London) of interest free equity loan, would fixed rates at 3.99% help those who now need to find the extra deposit?

[winner31] 01/2/2023 15:20

The first fixed rate home buying mortgage for buying a home to be priced at below 4% in more than four months was launched today in the latest sign that borrowing rates are slowly “normalising” after the sudden Autumn spike.
The ten year deal with an interest rate of 3.99% from Virgin Money will be seen as an important psychological milestone for borrowers reeling from the surge in borrowing costs over the past year. It is only available to buyers with a deposit of 25% and there are significant penalties for early repayment.

[sikhthetech] 30/1/2023 23:05

With housing sales slowing and prices falling, it's not a good time to be asking developers to fix unsafe buildings.

PSN 1st HB to confirm their intention to sign up.



Six weeks for developers to sign contract to fix unsafe buildings.

Contract requires developers to fix buildings and reimburse taxpayers, with an estimated £2 billion expected to be committed to fund repairs.

https://www.gov.uk/government/news/six-weeks-for-developers-to-sign-contract-to-fix-unsafe-buildings

[winner31] 29/1/2023 23:22

Andrew Bailey says he expects a Softer Landing , hold on to your hats tomorrow .

[sikhthetech] 29/1/2023 18:50

winner,

Softer landing for the economy.

That doesn't help those who can't get on the property market because prices are too high.

Thanks to Sunshine Today for this find.

Backs up my assertion that it will have a negative impact on HBs.
20% of PSN private sales were completed using H2B scheme.

Apart from homebuyers falling into negative equity, the scheme's interest rate after the initial interest free period follows CPI and everyone knows that's around 10%. Why would the govn do a U turn on such a toxic scheme?

The scheme was used by around 20% of PSN's private reservations.

The scheme ended to new applications at end of October, so it's no longer available.

Obviously HBs are currently busy trying to complete the homes using the scheme as it has deadlines.





sunshine Today27 Jan '23 - 07:33 - 12349 of 12353
0 3 0
As predicted by another poster on this BB

///////

The end of Help to Buy will be painful for housebuilders

The soon-to-close scheme inflated profits but builders are hoping an industry-run replacement will save them
January 26, 2023
By Mitchell Labiak Taha Lokhandwala


At the end of March, the UK housing market will wave goodbye to the Help to Buy (HTB) equity loan scheme. For many, it will be good riddance, too. While its defenders point to the number of homes sold under the policy, critics have long lambasted HTB as a waste of taxpayers’ money which subsidised listed housebuilders' windfall profits for over a decade and caused house prices to soar.
Yet, even though many will be glad to see the back of it – assuming another government u-turn isn't in the works – HTB's end is set to create a host of new problems. In the midst of the worst housing downturn since 2008, there are concerns about what will happen to the housebuilders whose profits have become arguably too dependent on the scheme, and the house buyers who bought homes under the scheme falling into negative equity (see boxout below).

[winner31] 29/1/2023 16:43

Andrew Bailey actually says he expects a “Softer landing”

[beckers2008] 28/1/2023 13:46

As expected and what I told the trolls will happen, lol!

BOE interest rate at 6%?
Absolutely no chance.

https://www.thisismoney.co.uk/money/markets/article-11684857/Bank-England-U-turn-dire-recession-forecasts.html

[sikhthetech] 28/1/2023 13:37

Deposit of £62k just to get on the property ladder!!!
Backs up the stance that the majority of mortgages are now in joint names. Very few were in the 80s and 90s.



Why UK house prices could plunge by 20% after the latest interest rate hike

Property market has defied gravity for years but analysts say rising mortgage rates will mirror the 1980s price crash



"The party was always going to end sooner or later as, even with rock-bottom interest rates, finding a deposit for a home and meeting mortgage payments became more and more of a struggle. Figures from the Halifax this week showed a first-time buyer was paying just over £300,000 to get a foot on the property ladder and needed a deposit of £62,000. More than 60% of mortgage completions were in joint names last year."



https://www.theguardian.com/business/2023/jan/28/why-uk-house-prices-could-plunge-by-20-after-the-latest-interest-rate-hike

[beckers2008] 27/1/2023 16:47

Sikhthetech,

Yes and I was wrong buying my first tranche at the end of March 2022, but at least I admit I was wrong!

I have already said on the TW. BB that I have bought TW. in three tranches at an average price of £1.07.
You clearly forget that fact, but you are the village idiot so no surprise there, lol!

You have been wrong for over 4 years but still keep repeating the same old BS.
You never admit you are wrong but you are.

You were asserting that the house price crash was coming in October 2018. Did it? No!
October 2019. Did it? No!
October 2020. Did it? No!
October 2021. Did it? No!
October 2022. Did it? No!

What was the average house price in October 2018 compared with October 2022? Considerably lower, lol!

You are embarrassing yourself, having been totally wrong for over 4 years but still bleating on, and on and on, lol!

You should have closed your short when I told you I was buying my third tranche in Mid October but no doubt as you are still here bleating away, you didn't, lol, just lol!

[beckers2008] 27/1/2023 15:05

'Sikhthetech' you have down a great job ramping this down from mid October! Lol!

It's all in the price you fool and totally oversold in Mid October, only a fool wouldn't know that, but you are the village idiot after all, aren't you, lol, just lol!

[sikhthetech] 27/1/2023 12:05

Thanks to Sunshine Today for this find.

Backs up my assertion that it will have a negative impact on HBs.
20% of PSN private sales were completed using H2B scheme.

Apart from homebuyers falling into negative equity, the scheme's interest rate after the initial interest free period follows CPI and everyone knows that's around 10%. Why would the govn do a U turn on such a toxic scheme?

The scheme was used by around 20% of PSN's private reservations.

The scheme ended to new applications at end of October, so it's no longer available.

Obviously HBs are currently busy trying to complete the homes using the scheme as it has deadlines.





sunshine Today27 Jan '23 - 07:33 - 12349 of 12353
0 3 0
As predicted by another poster on this BB

///////

The end of Help to Buy will be painful for housebuilders

The soon-to-close scheme inflated profits but builders are hoping an industry-run replacement will save them
January 26, 2023
By Mitchell Labiak Taha Lokhandwala


At the end of March, the UK housing market will wave goodbye to the Help to Buy (HTB) equity loan scheme. For many, it will be good riddance, too. While its defenders point to the number of homes sold under the policy, critics have long lambasted HTB as a waste of taxpayers’ money which subsidised listed housebuilders' windfall profits for over a decade and caused house prices to soar.
Yet, even though many will be glad to see the back of it – assuming another government u-turn isn't in the works – HTB's end is set to create a host of new problems. In the midst of the worst housing downturn since 2008, there are concerns about what will happen to the housebuilders whose profits have become arguably too dependent on the scheme, and the house buyers who bought homes under the scheme falling into negative equity (see boxout below).

[brucie5] 26/1/2023 08:37

Small cos in consumer facing stocks have obviously done well Sikh. Psn is a different beast. I think it will start to recover some lost ground now, while we look forward to a continued, albeit reduced, dividend.

[sikhthetech] 25/1/2023 18:43

There you go, EZJ now virtually up 100% in 3 months - recommended at 285p in Oct, now 510p. That rise based on events I posted about.
Covid benefited the HBs and not travel. Now people living with covid, so travel booming. Spain, UKs no 1 destination only lifted restrictions in Oct.




sikhthetech - 10 Nov 2022 - 17:28:46 - 3813 of 3995 PERSIMMON PLC -
Odillon,

"the HB share prices would not follow the FTSE herd."

Easyjet have gone up 40% in a month and up around 30% since I mentioned them on here only 3 weeks ago

Since I mentioned EZJ only 3 weeks ago:
FTSE is up around 7%
PSN up is up around 10%.
EZJ up around 30%.

Housing market boomed due to covid, travel was badly impacted. Now, with people 'living with covid', things have turned around, housing market bleak, travel booming.
People will still go on holiday, cheaper holidays, for the sake of their kids and their own wellbeing.
Wizzair/EZJ updates showed business was booming, HB updates showed sales slowing, cancellations increasing, outlook uncertain

[brucie5] 24/1/2023 21:26

Personally, I think we may seem some short term recovery to 1600 or even 1800 given the depths of the recent fall. I imagine there might also be a post-winter effect, and spring brings on buyers and lower gas bills. Combined with useful, if reduced dividend, not a bad proposition.
All imho, of course. Risks remain, and no doubt Sikh will put me right. He's been right so far!

[brucie5] 24/1/2023 21:21

Couple of snippets. And I realise most would consider it too early to be buying this back, but the chart has become of interest to me. I may not be holding for long.

But:

1. This is the Questor article mentioned by an earlier poster, following the recent update.. Gist is, PSN is a survivor and this is a good time to tuck it away.

hTTps://www.telegraph.co.uk/investing/shares/stocks-bleak-short-term-future-provides-stunning-buying-opportunity/


2. And this was a post by "Abtan" on Stocko in response to an article by Megan Boxall in October last year... The title of the article is cautionary enough!

hxxps://app.stockopedia.com/content/dont-be-tempted-by-house-builder-valuations-yet-955725?order=createdAt&sort=desc&mode=threaded

But Abtan, who also holds GLE, wrote the following about PSN, which I quite rated for its detail: H/he writes-

For 2006-2021 I've compiled a table below showing the company's:

Gross Profit %;
ASP (Average Selling Price);
Volumes Sold,
which I will use to support my rationale for holding.

---

Gross Margins are much stronger today (c30%) vs 15 years ago (c14%)
Additionally, debt was much higher back in the noughties with a huge £76m finance charge paid in 2008 and £55m paid in 2009. The company today has no debt.

That's 2 huge problems the company doesn't have today.

---

Now if history repeats itself in the next 2 years for both volume and ASP i.e. drops of 44% and 15% respectively, then revenue in 2024 should still hit c.£1.6b.

I see this as quite an extreme (and hopefully prudent) scenario.

Apply a very poor PBT% of 20% (the last time it was lower than this was in 2014 - 18.1%) and we are still discussing a company with an operating profit of £327m and free cash generation, using historic assumptions and a 25% corporation tax rate, of c£230m.

---

There is of course a lot of land and cash on the balance sheet too:

a) The current market cap is £4b.
b) I'm personally assuming land on the balance sheet is overvalued by 30% (£2.1b ---> £1.5b), and is worth £1b net of £0.5b of Land Payables.
c) Cash on the balance sheet is currently £780m.

a) + b) + c) gives me an EV of £2.2b.

----

So this is a company that has an EV of £2.2b and in its worst upcoming year will still generate £230m of free cash (a c10% yield) and doesn't appear to have any liquidity issues.

That doesn't sound that bad.

Do I think the share price will fall further? Probably, especially once the current dividend is cut. But in this rapidly changing world, I think I'd rather hold when the valuation seems so cheap and there doesn't appear to be any obvious danger of things falling to zero, or not recovering in good time."