Redrow Share Discussion Threads

[martin44] 14/1/2002 10:30

Tay takeover now conditional and new board set-up, this stock should really start moving soon, in addition 6 months results announced for 5th March. Should be some positive results and comments.

[martin44] 14/12/2001 10:24

lightning
Thanks for your warm welcome and I believe that there is a great future ahead for Redrow. In addition the price has held up very nicely with all the gloom this week.

[lightning] 11/12/2001 17:18

martin44
Welcome, I thought I was the only person holding Redrow. I agree, it is a solid company and it has gradually appreciated over the years I have held. Ever since the IPO in fact. One of the few I hold showing a good profit. Regular dividend too. I will be watching the future results with interest.

[martin44] 11/12/2001 16:57

Well this seems a quiet thread but after the excellent write-up in the financial mail I could see the quality of this stock and bought in a 1000 shares on Monday. In a falling market I am glad I did with 2 days of solid increase and pretty high volumes being made. In addition I had come across Redrow with an interest redevelopment of an old brewery in Newark and since making enquires have received some very high quality mailings from the organisation on the high quality developments they are building.

I am certainly with this one for the medium term at least as it seems that with the purchase of Tay homes they will have the Pedley magic worked on them, to produce the higher margins achieved by RDW

[lightning] 26/9/2001 18:57

Thats nice to know Calahan, if I come up on the lottery I'll bear it in mind.

[calahan] 26/9/2001 14:26

To anyone interested

I have got an e-mail back from Redrow and I can confirm that you do get 1% of the cost of a REDROW home if you own 2500 shares.

Best of Luck

Cal.

[calahan] 18/9/2001 08:43

Hi lightening.

Wasn`t aware of the discount on a new Redrow home, so have just e-mailed the company to find out if this is available to shareholders, and any other shareholders perks available, as I could find no mention of it on their website.

Let you know once/if I get a reply.

Best of Luck.

Cal.

[lightning] 17/9/2001 19:02

One item not mentioned above is that it used to be the case that if you held 2500 Redrow shares you could obtain 1% discount off the price of a new Redrow home. Might still be available if anyone interested. Not in itself a reason to buy a stock but every little helps.

[calahan] 12/9/2001 18:45

Here is the current state of REDROW as I see it.

After yesterdays strong results, I believe there is easily scope for REDROW to reach £4 in 18months.
My reasons for this are as follows:-

FullYear results exceeded ALL broker forecasts, and I see no reason why they shouldn`t do the same next year given the current broker estimates.
(I think they`ll make somewhere nearer 84-85M IMHO since the group has averaged 22.65% profits growth over the past 5years, but has recently seen a slowdown(7% the past year but I expect this to increase due to the "In the City" developments.(see below))).

Housebuilding sector still has strong growth, since houseprices are set to continue rising, and a further cut in interest rates by the is BoE expected, so I see no fall-off in the demand for new houses.
(as people will ALWAYS need new houses)


A successful share-buyback last year which resulted in the EPS. increasing by 34% to 30.2p.
Which shows dedication in achieving value for shareholders.


"Land bank has increased substantially from 13,500 plots to 14,300 plots representing, on an historic basis, in excess of a four year supply."
So no signs of a slowdown in growth.


Average plot cost set to fall as a percentage of sale price.
So further increasing profit margins.


"The introduction of the In the City developments represented a major extension of the Redrow portfolio with highly successful developments now in progress in London, Birmingham, Bristol, Cardiff, Manchester and Nottingham. During the last financial year, city schemes delivered 5% of legal completions, a percentage that is anticipated to increase as these schemes mature and further schemes are secured."
This is an important passage from the results, since it shows that the management were (and still are) aware of all possiblities to increase growth and group value by diversifying their building portfolio. Also, "In the City" developments are expected to make up a higher percentage of sales during the coming year and margins are higher in this area, which will lead to greater profits.


But my favorite part of the results is:-

"During the year Redrow Homes continued to expand its market share.In particular, during the 6 months ended 30 June 2001, the volume and value of sales secured has increased by 12% and 24% respectively over the corresponding period in the previous year, in part due to the performance of the city centre schemes. As a result, the Division ended the year with a record forward sales position of 1,266 units, having a combined sales value of #176.0m, 32% ahead of the record levels of last year."

Which again emphasises the increased profit that the "In the City" developments will bring, and the record sales expected for next year are quite useful to.


REDROW have also won the following awards:-

For the third successive time,winner of the Daily Express "Best National HouseBuilder" award.
HSBC "Quality Service Award",for the third occasion in the last four years.
Prestigious Welsh "Company of the Year" award, earned against considerable competition from companies in other sectors.
So very well respected within the industry.


Other plus points include:-

"Group operating margins this year at 18.9% remain amongst the best of those in the industry, reflecting our commitment
to sustaining them over the long term."
"Return on capital employed at 28%,demonstrating an efficient use of the funds available"
"Group operating profits at #79.5m are up by 17%"

Which all bodes well for the future.


And:-

"The Group has entered the new financial year with substantial strength. Redrow Homes enjoys record forward sales and land bank combined with a product portfolio that is widely acclaimed within the market."
A VERY positive outlook from the CEO. Paul Pedley

And one final thing, don`t forget the dividend which increased by 11% to 5.5p which at todays close price makes, gives a yield of 2.7%. Which is not much lower than some savings accounts given the current interest rate.
(Has increased by 11% on average for last 5years)


Add to this the recent consolidation in the Housebuilding Sector, with PERSIMMON buying BEEZER HOMES and GEORGE WIMPEY recently buying McALPINE HOMES, a bid could be made for REDROW (very unlikly, but not impossible and I personally hope it doesn`t happen).


AFX news after results:-

"REDROW...is expecting to push up the cost of a home by 10 pct to around 132,000 stg in 2001-02, as a shift in
the business mix plus a swing towards more city centre apartment builds, drive both margins and profitability."

New Broker forecasts:-

"Leslie Kent at Seymour Pierce is looking for full year profits of 78 mln stg, which would give earnings of 34 pence a share. This puts the stock on a forward multiple of just 6.3 times earnings -- "hardly demanding for a company
like Redrow," says Kent. He rates the stock as a 'hold' Stockbrokers Williams de Broe also upgraded their 2001 forecast, from 77 mln to 81 mln stg, and reiterated a 'buy' for the shares."
VERY modest IMHO, will easily be beaten next year.


So all of this leads me to believe that at £2 this share is very undervalued and that given time I expect to see £2.30 in the short-term, £2.80 by year end and £3 by next FullYear results.

All of this is IMHO of course.
Not to be taken as investment advice.
DO NOT buy on a SHORT-TERM basis.

Best of Luck to all holders and newcomers.

Cal.

[lightning] 11/9/2001 10:27

Yes, good divi. Always nice to receive a little financial return since you can't always rely on a capital gain for income.

[calahan] 11/9/2001 08:00

Nice set of results today, looking good for further growth and hopefully the share price should start moving as soon as the market calms down a bit.

The Highlights include:-

* Earnings per share increased by 34% to 30.2p (2000: 20.5p).

* Dividend of 5.5p per share (2000: 4.95p), an increase of 11%.

* Return on capital employed at 28% for fourth year in succession.

* UK Homes operating margins at 17.9% (2000: 16.1%).

* UK Homes operating profits increased by 18% to #74.6m.

* Current land bank increased to 14,300 plots (June 2000: 13,500 plots).

* Value of forward sales up 32% to #176m.

The huge increase in EPS. was down to a successful share-buyback of around 30% over the last year.

Good luck to all holders and would-be holders.
Redrow is a must in these sort of markets IMHO.

Cal

[calahan] 06/9/2001 10:44

A big trade of 313,130 just gone through.

I think it may be the Abacus Trust Company (the trust for the company`s long term share incentive plan) topping up again before the results.

Should hopefully see some RNS. to confirm soon.

Cal

[lightning] 23/8/2001 20:09

gregphillips

Good day to you. I was beginning to think I was the only holder of RDW. I bought in when it floated, remember that? All I know is it was a long time ago and I have never felt tempted to sell out. Steady little divi and whenever I've looked at my portfolio to weed out non-movers RDW starts going up again. I hate to sell something on the rise. As for the future, I believe the sector will see some mergers or takeovers just to get hold of the landbanks. I also hold ART and would like to see a movement there too.

[lightning] 22/8/2001 18:08

I am surprised there has not been a free BB thread about Redrow. They have held up well during the considerable falls on tech shares et al. They have risen nearly 10% in the last month and Quote is showing a 10p rise today. Is it because they build nice houses or is there something else in the wind?

Any other holders posts welcome on this steady little earner.

[joker59] 06/3/2001 08:39

Kayak

Well spotted

[kayak] 04/3/2001 23:32

Note date on NickB's post carefully :-)

[nickb] 03/2/2000 23:39

Results im told will be very good so take a look at the graph ! Redrow is a 'local' builder to me :-) Looks low risk.