Redrow Share Discussion Threads

[sikhthetech] 05/4/2020 14:30

waikenchan,
"Agree that TW has lots of cash as as it stands has a good liquidity buffer in relations to its costs and it is a very profitable company."


It's not just whether any HB currently have a lot of cash atm.

How much will the leasehold scandal redress cost them? They will still need provision for that regardless of Covid-19.

New builds command a higher price and so have further to fall than price drops for other properties...

London house prices are likely to fall substantially, as I think foreign investors are likely to withdraw from the market there. Property prices already started to fall in Dubai and India, before Covid-19, so I think international investors will be very wary...

Then there's domestic btl investors. There was an increasing number already selling due to tougher tax rules, again pre-Covid-19.


Therefore, I think avg property prices will fall substantially over the next couple of years..

[skyship] 05/4/2020 13:34

t.l.a.t.s.a.t.t.:

Thnx for the above - being an IC subscriber I have now read that article; and reasonably encouraged for my selection to buy BKG & VTY. Below is the IC View summary:

By the way, I'm about to send you a Private Message inc. the previous IC Tip for VTY.

IC View

Economists at Oxford Economics are forecasting a 1.4 per cent contraction in UK gross domestic product this year, although given the question mark that hangs over how long the coronavirus epidemic will last and its eventual impact on companies, any modelling should be taken with a large pinch of salt. For investors in UK housebuilders, attention should focus for now on financial resilience - debt levels versus assets and the level of cash reserves. On that front, balance sheets across the sector are in a healthier position than they were prior to the 2008 financial crisis, with lower levels of gearing even after including land creditors. We would highlight recent buy tip Vistry, which has been reducing its landbank and streamlining its operations over the past two years, as a potentially resilient operator within the sector.
This article was updated on 31/03/2020

[waikenchan] 05/4/2020 13:22

But I think the most attractive is according to fundamentals metric is TW.

[thelongandtheshortandthetall] 05/4/2020 13:12

Skyship
This was shared with me thanks to homebrewruss:



Worth noting the downside risks etc :)

[waikenchan] 05/4/2020 13:11

Agree that TW has lots of cash as as it stands has a good liquidity buffer in relations to its costs and it is a very profitable company.

1)I just wonder about land values being slashed in other places outside London - this will surely impact on on their valuation.

2)Govermental support - will this last beyond 2021? Berkley group least exposed to as most of their home outside of the help to buy schemes.

3)Worries about mortgage market, but that would affect all housebuilders. Also, the ground rent issue - I don't know if this affect all housebuilders the same.

Im probably going to say berkley group - just because I think assets values will be maintained the most.

[thelongandtheshortandthetall] 05/4/2020 13:08

Skyship.
Can you post the IC VTY article. N worries if its behind a paywall :)

BKG have around £1b in cash. Thats some cushion.

[skyship] 05/4/2020 12:55

Waikenchan - you say elsewhere: Which one would you pick and why? Tw, bdev, rdw, psn, bkg?

Firstly, I won’t post again on the TW. thread as it seems to have fallen victim to the braindead; so will converse elsewhere.

Well, as we've seen, brokers Jeffries are bullish for the housebuilder sector at these distress levels; and there was an interesting piece in The Telegraph. Talk of a strong recovery for housebuilders. BEST BUY stated as Berkeley Group (BKG):



This got me looking at the usual comparisons between all the players; but of course other than cash levels – all data is historic….and now far more so than usual!

So, what directed me at the end of the week was the Investors Chronicle Tip of the Week article of 20th March. Vistry (VTY) seems to tick the boxes; even though it was the sector’s worst performer on Friday. So now doubly cheap.

Could be any number of reasons for Friday’s poor performance, but likely just the victim of one fund manager dressing his book having been overweight the sector for the usual early year upward move.

I’ve decided to straddle the sector with two plays:

# One of the smallest fallers - BKG
# One of the largest fallers – VTY

Both tick the box for a high cash balance.

[waikenchan] 05/4/2020 11:36

But I assume there will be large regional differences. I can't see London area falling by 10%

[skyship] 04/4/2020 13:05

NY Boy - simplistic and over-hyped scaremongery.

Savills yesterday estimating a 10% fall in house prices - and I see you posted on their thread, so presumably you follow their judgement.

[ny boy] 03/4/2020 09:57

Death spiral for property sector, global property prices will collapse here in the U.K. 25-50% drop quite likely personal households debt levels are unsustainable, huge spike in unemployment Avoid, pick up these stocks way cheap later in the year as the fall out gathers steam

[dr_smith] 30/3/2020 13:43

In accountancy, to be conservative and preserve insurances is the norm.
I see the action of approaching banks two-fold.
1) Given period of site closue is an unknown, cover may well be required in short term.
The assets in reserves may not be instantly convertible into cash, and other disjointed cashflows can bring about need for short term cover.

Checking scope of o/d facility at bank is therefore a normal business exercise.

2)Gov assistance is there as insurer, a place of last resort for assistance, not first port of call, therefore to retain recourse to gov funding it is good practice to be publicly seen acting with diligence and conservatism and in a timely manner.

Indeed the two aspect are even presented in the same paragraph:

" It is our intention to increase the additional 'accordion' facility of £50m that is available to us to £100m. We have also submitted an application to the Bank of England for eligibility for the Government's COVID-19 Corporate Financing Facility."

It stated before this they have a strong balance sheet, so I see this as normal behaviour, nothing to read into it in itself other than the bigger UK topic of COVID 19 and lockdown.
IMO
Dave

[32campomar] 27/3/2020 07:13

Redrow in talks with its banks for funding to see it over the virus period. Not sure if this will be positive or negative for the stock?

[eggbaconandbubble] 24/3/2020 11:55

Taylor Wimpy have stopped everything - work, sales and so on.

[dr_smith] 24/3/2020 11:01

I note:
"We also expect outlet openings to slip as local authorities delay planning committee meetings.'"
So a development is delayed because Brian from local planning ofice is sat at home doing some gardening???

It should proceed with skype type tools.
It will be difficult to norm but with compromise can be done.
I am sure Brian has a home computer, he can kick the kids off, and architect can give him remote log in to view required aspects. This could be done 20 years ago, so can probably go to Brians phone now whilst he's cutting the lawn.

To twiddle thumbs and hold up employment for hundreds should not be an option.
It's damage limitation. Adapt, continue, survive.

IMO
Dave

[eggbaconandbubble] 24/3/2020 09:14

Suspension - cancellation? of interim divi :-(

[purplepelmets] 09/3/2020 09:53

Back in this morning. Life was not complete without my RDW holding.

[dr_smith] 04/3/2020 20:07

Tomorrow, 5/3/20 I note from sharecast:
PSN Ex- special div £1.25
RDW ex div £0.105

[robertball] 02/3/2020 08:33

I thought they were insulated from leaseholder stuff

[robertball] 02/3/2020 08:32

Why no bounce today...