Redrow Share Discussion Threads

[imastu pidgitaswell] 27/6/2021 21:12

But they only represent less than a quarter of a house sale price.

So they would have to rise by more than 4 times the level of house price increases of the past 12 months to cancel those increases.

Which I wrote in the previous post.

Do you ever read what somebody you disagree with writes? Or is it just the same old blinkered, head down, fire out the potential negatives stuff?

That is a rhetorical question - I already know the answer...🙄

[sikhthetech] 27/6/2021 19:06

Materials costs have risen faster than house prices.


Construction Materials Shortage Set to Continue, and Prices Could Keep Rising

"There were record surges in the price of timber, bricks and steel in May, according to IHS Markit, which reported British construction activity surged in May at the fastest rate in nearly seven years. "

[essentialinvestor] 27/6/2021 15:15

January to April the best time to hold the listed sector and often drifts over summer
months.

[shaker44] 27/6/2021 13:51

This is just looking too cheap now

[imastu pidgitaswell] 27/6/2021 13:36

I guess I'm suggesting they have already had the price (and margin) increase over the past 12 months or so - as house prices have increased while their costs didn't.

Compare with (say) pre pandemic margins in 2019 - overall, they're higher, even after the materials price increase as prices have risen by more than costs.

[shaker44] 25/6/2021 17:16

Yeah they will take some pain but share price is based on say 10, years forward earnings potential right? I don't think this materials issue will be a long term margin hit. But I have been wrong before.

[bull19] 25/6/2021 16:29

Hi Shaker I'm not sure how easy it is for HBs to increase prices (which are generally advertised quite far in advance) in response to short term material cost increases. I suspect this is an issue which the higher ups at the HBs spend a lot of time wrestling with. Ultimately when costs increase, someone has to take the hit, be that supplier, HB or buyer but I don't think it all ends up with the buyer, or at least not immediately.

[imastu pidgitaswell] 25/6/2021 12:45

Actually I don't know either...

It will vary by region, as with house prices, but the best I could find was an estimate of 45% for construction costs, i.e. labour and materials, of which half is materials costs. So around 22% of the price of a house. Say 1/4 as an order of magnitude.

So if in fact materials went up by 25%, that would be 6% of the house price - to keep the same margin. What did house prices rise by on average over the past 12 months?

sikh - thanks for that, always good to get your objective view, isn't it? It is at least consistent - regardless of the share price...

[sikhthetech] 25/6/2021 12:22

stockpicker,

I gave my opinions as to why HB's will fall in my previous post...#1083

[shaker44] 25/6/2021 12:07

And they affect all new builds so when buyers compare prices they will be seeing similar increases on most sites. The additional monthly mortgage cost is not a huge deal in my view

[bull19] 25/6/2021 12:05

And no, I don't know the answer to your question!

[bull19] 25/6/2021 12:03

I realise they wouldn't have to increase the sale price by the same percentage to cover the material cost increases. Nonetheless its bound to have an impact. The material cost increases being reported at the moment are quite shocking!

[imastu pidgitaswell] 25/6/2021 11:27

Do you know what percentage of the price of a house is composed of the actual building materials? So excluding the land costs, the people costs, the taxes, the profit margin etc etc?

[bull19] 25/6/2021 11:25

Material costs are crazy at the moment which can't be helping. Jewson reporting price increases of up to 25 per cent in July. Must have a big impact on housebuilders as they can't just increase sale prices by this amount

[imastu pidgitaswell] 25/6/2021 09:57

Have you met my mate sikh?

[robertball] 25/6/2021 09:43

End of help to buy, interest rate rises, raw material cost inflation, govt planning policy shambles,

[clarky5150] 25/6/2021 09:06

Just mirroring the sector. Question should be where will these be at Christmas? Thats why this is a buying op.

[stockpicker99] 25/6/2021 08:39

Why is Redrow share price dropping when it's sales and profits are exceptional and they starve the market of information ?Are they frightened of telling the market how well they are doing as someone will buy them and the current owners will stop cashing in ?

[imastu pidgitaswell] 25/6/2021 08:28

Nope - probably because I bought some.

Fortunately only the one chunk - but am liking these prices a lot. With earnings where they are and this balance sheet, the current price is silly. Although still way above the 200 day moving average.

Will happily wade in for a lot more than I currently have - if and when the precious metals shares I have go up.

[1318myl] 25/6/2021 08:22

Anyone share some light why rdw is heading south

[robertball] 17/6/2021 19:05

I used to trade WPP this way which had the added advantage of no stamp duty. You were in profit on a 1% move - unt the trend broke down

[robertball] 17/6/2021 19:03

Sell into any strength. The likes of BKG are more insulated. Stock rotation into financials, commodities and gold.

[robertball] 17/6/2021 19:01

Interest rate rise to stave off inflation . Yesterday fed reserve announced possible rate rise in 2023 (previously guided 2024). Its the straw in the wind and a change of mood music

[shaker44] 17/6/2021 16:22

So what do You read into that relating to the share price? Buy? Sell? Hold? Target price??