Redrow Share Discussion Threads

[imastu pidgitaswell] 11/11/2022 08:39

"Given the strength of our order book and the increase in private average selling price, despite the recent reduction in sales rate, we expect our revenue for 2023 to be cGBP2.1bn (2022: GBP2.1bn) and our operating margin to be c18% (2022: 19.3%)."



Similar issues (surprise...) to others, but in a good place, methinks. Certainly at 4-5 times earnings, with millions of net cash.

Bit of a period of lack of visibility; how prolonged after the farce of September's budget and October's cancellation will be the period of holding off by purchasers be? No point in opining - it's all subjective and biased and no-one knows. Facts and quantification are all that matter - and in this unusual period, we will only know after the fact.

Note that buybacks continue - no capital allocation reappraisal, unlink with PSN.

[sikhthetech] 10/11/2022 20:27

Following on from lenders forecasting 10-15% crash in house prices, RICS index now turned negative, from +30 in Sept to -2 in Oct.


That's as well as:

Lenders reporting drop in prices.
Lenders forecasting 10-15% crash in house prices for next year.

Asking prices significantly lower.
Mortgage approvals falling.
HBs stating slowing housing market, increase in cancellations, falling demand.

Demand falling, as expected

Best to trade hyped sectors
;-)


RICS, surveyors index has gone from +30 in Sept to -2 in for last month.

"The RICS UK Residential Market Survey showed that a net balance of -2% of respondents cited an increase in house prices in October 2022, turning negative for the first time since June 2020 as rising mortgage costs stoked caution among buyers."

"New buyer enquiries also fell for the sixth straight month in October, while survey feedback on buyer demand was negative across the UK."

RICS chief economist, Simon Rubinsohn said: “The latest feedback to the RICS survey provides further evidence of buyer caution in the face of the sharp rise in mortgage costs. As a result, the volume of activity is likely to slip back over the coming months and realistic pricing is now much more important to complete a sale."

[sikhthetech] 09/11/2022 21:51

If you look at the share price rise at around 3pm...
HBs rose in sync.

Have a look at LGEN, IAG, EZJ, BARC etc... They all rose at the same time.

Therefore, share price rise at 3pm had nothing to do with TW's TU, just general market movements, as expected.

Best to trade hyped sectors.



sikhthetech20 Feb '22 - 15:26 - 5884 of 5899 Edit
<...>
When the housing market crashes, no HB is immune from the crash. Likewise, listed HBs are not immune from stockmarket falls or movements.

Govn support, provided during pandemic, has ended. Repossessions which were stopped during pandemic are legal again.
Around 30k homeowners in severe mortgage debt.
Inflationary pressure, interest rate rises, NI rises, Council tax rises, energy price

[sikhthetech] 09/11/2022 17:30

TW. TU today... similar downbeat to PSN...


falling private sales
increasing cancellations.
Cost inflation 9-10%. With house prices falling that will impact margins.



"We achieved a net private sales rate of 0.74 homes per outlet per week for the year to date (2021: 0.95) and 0.51 homes per outlet per week in the second half of the year to date (2021: 0.91), reflecting customer response to heightened levels of economic uncertainty.

The cancellation rate for the second half of the year to date was 24% (2021: 14%), with a year to date cancellation rate of 18% (2021:14%).

As at 6 November 2022, our current total order book excluding joint ventures stood at c.GBP2.6 billion (2021: c.GBP2.8 billion) and our order book represented 9,153 homes as at 6 November 2022 (2021: 10,643) of which 79% is exchanged.

Customer visits to our website continue to be at good levels, albeit with conversions taking longer. Where customers have locked in mortgage rates, they remain keen to complete their purchase.

In the year to date, we have operated on an average of 229 sales outlets (2021: 224), and we are currently operating from 234 outlets (2021: 217) having opened 74 new outlets in the year (2021: 64 ).

Prevailing build cost inflation remains around 9-10%."

[sikhthetech] 09/11/2022 17:29

PSN TU yesterday - sales slowing, cancellations increasing...


Help to buy ended to new applications just last week, 31st October. HBs made millions from the H2B scheme, so future sales due to that scheme are now lost.
20% of PSN completions for this year used H2B scheme, which is a significant number.

What scheme, if any, will the govn announce with their Autumn Statement next week, especially given they need to reduce borrowing and spending???

Cancellations up.

During GFC HB share price fell 80-90% after lenders were forecasting 10-15% drop in house prices. I was forecasting 40% drop, peak to trough, in some areas. I'm expecting similar this time.



""Rising interest rates and broader economic uncertainty are clearly impacting mortgage lending and customer behaviour and this is reflected in our recent weekly sales rates and forward sales position. Persimmon enters this more challenging period as a five-star builder, with average selling prices below the market average, high quality land holdings, and a robust balance sheet."

"While the Group remains well-positioned to deliver its full year volume expectations of between 14,500 and 15,000 units, the last six weeks have seen cancellation rates increase to 28% from 21% in the preceding 12 weeks from 1 July 2022, introducing some uncertainty."

"Help-to-Buy has now closed for new applications, and was utilised on c. 20% of completions in the year to date. "

[imastu pidgitaswell] 08/11/2022 16:31

That's a pretty good reaction to PSN's trading statement.

Too early to say, but when bad 'news' results in shares not falling, it can be a sign of a bottom. RDW's owns statement is due on 11th November, (with the AGM).

From last time's statement, it was notable, and posted here, that a significant chunk of their buyers are mortgage free and include downsizers; only 8% were H2B. And in any event, the homes they build are of far better quality, not cladded buildings of flats - there are differences between builders, and this market swing into a down turn will make that apparent, I think, in terms of share prices.

[sikhthetech] 23/10/2022 17:08

Mortgage rates are very likely to fall in months ahead.

The direction of the housing market and interest rates will become clearer once the new PM is elected, new policies announced, particularly to support the housing market and the next BoE interest rate meeting, currently 3rd November.

The current Help to Buy scheme ends to new applications in a week. Who knows if the govn comes up with a new scheme.


When more and more media report future rates falling, housing market crash then a lot of people will hold off until the rates fall and housing market crash over.

That will result in a loss of millions of pounds in potential revenue and cash for HBs and falling demand for housing market, whilst those who were thinking of selling will do so sooner rather than delay it.

Watch the demand fall and supply increase.

[tmfmayn] 23/10/2022 16:43

[SharePad] Screening For My Next Long-Term Winner: REDROW #RDW

"The gloom has pushed Redrow’s price to NAV to levels last seen during the pandemic crash and the banking crash"

[beckers2008] 29/9/2022 23:27

Sikhthetech, I see you are now trolling here copy and pasting your usual BS.

You don't know the difference between the BOE base rate and the bank to bank lending rate, lol!

You stated on the PSN BB 'That what I type manipulates the SP' lol!

You endlessly spout the same BS, never admit you are wrong although since October 2018, then 2019, 2020, 2021 and 2022 you have been calling for a House Price crash, you have wrong for 4 years, lol!
You must have lost a lot if money if you backed up your short in Oct 2018.

You deny that you watch editted posts, although you were caught out, you are either a very sad individual or a paid troll, lol

Do not engage with 'Sikhthetech' unless you want to argue for probably the next 4 years.

'Sikhthetech' is a proven fool multiple times over with Zero credibility, an idiot, lol, just lol!

[sikhthetech] 29/9/2022 14:07

With the current turmoil, I would expect HBs to start cutting divi to conserve cash.

When housing market crashes, the downturn lasts years. HBs will still have costs and so conserving cash becomes priority.


Banks now have a 1/3 property price fall stress test.
I'd expect HBs to start using similar, if they haven't already done so.

I have posted the risks and suggested not to buy house builders for several months.



The NI tax increase has been reversed, income tax reduced. The remaining still apply.

sikhthetech20 Feb '22 - 15:26 - 5884 of 5899 Edit
<...>
When the housing market crashes, no HB is immune from the crash. Likewise, listed HBs are not immune from stockmarket falls or movements.

Govn support, provided during pandemic, has ended. Repossessions which were stopped during pandemic are legal again.
Around 30k homeowners in severe mortgage debt.
Inflationary pressure, interest rate rises, NI rises, Council tax rises, energy price

[gswredland] 29/9/2022 13:59

Divi yield must be over 7% now?

[craftyale] 14/9/2022 22:05

Looking forward to the div and its reinvestment :)

[imastu pidgitaswell] 14/9/2022 19:00

Stock-specific stuff would be nice - we have enough spammed threads with that same post, haven't we?

Forward guidance was raised (again) today with the results:

"2024 Guidance update

The company is updating its 2024 guidance, primarily due to the benefit of the share buyback on EPS and DPS:


.......................................Sept 2022.............. Feb 2022
-----------------
Revenue (GBPbn)....................... 2.3 - 2.4............. 2.3 - 2.4
----------- ----------
EPS (p)................................ > 96.................... >= 92
----------- ----------
DPS (p)................................ > 32p................... >= 31
----------- ----------
ROCE (%)............................... > 23 ....................22 - 25
----------- ---------- "

[sikhthetech] 14/9/2022 17:22

Results look back, markets look forward.
Affordability is a major problem. Energy prices are surging again from 1st Oct, 2 weeks time.



sikhthetech - 17 Feb 2022 - 16:10:55 - 1224 of 1236 The Redrow Thread - RDW

When house prices crash, the asking price sees the biggest falls, as buyers ask for bigger discounts.

New Builds normally command a significant premium(can be 25-30%) over similar existing builds. That premium difference would reduce when house prices fall, so they too should see a bigger fall than the avg existing build.


House prices do not fall at the same rate across the country.

When the housing market crashes, no HB is immune from the crash. Likewise, listed HBs are not immune from stockmarket falls or movements.


Govn support, provided during pandemic, has ended. Repossessions which were stopped during pandemic are legal again.
Around 30k homeowners in severe mortgage debt.
Inflationary pressure, interest rate rises, NI rises, Council tax rises, energy price rises all impact affordability.

[kalai1] 14/9/2022 17:13

Redrow plc posted Finals for the 53 weeks to 3rd July titled “A return to the record underlying profits achieved pre-COVID.” Revenue increased by 10% to £2.14bn and is now slightly above the 2019 pre Covid record level of £2.11bn. Underlying profit before tax was up 31% to £410m, also up and a little beyond its pre-Covid record level. Underlying EPS was up to 96p. The final dividend increased by 19% to 22.0p making 32.0p for the year. The Group launched a share buyback program for up to £100m in July which has triggered some upward FY24 EPS guidance to >96p. The order books remains solid at £1.44b. With the sector as a whole under pressure in 2022 so far, valuation is now very attractive with forward PE ratio at 5.3x ranking RDW 2nd best out of 30 names in the Homebuilding & Construction Supplies sector. The company is also high quality in terms of profitability and solid balance sheet. Main clouds, the share price lacks near momentum, the macro backdrop also remains unhelpful for the time being. Redrow will be worth buying at some point, but is a share to monitor for now...

...from WealthOracle

hxxps://wealthoracle.co.uk/detailed-result-full/RDW/554

[imastu pidgitaswell] 14/9/2022 12:24

It was - but nobody interested. They would rather discuss the generics of the housing market and use it as a proxy for stock-specific detail.

Good presentation:



Less than 5 times earnings, £300m net cash (and that is after a c£100m working capital/land purchase timing difference) and a £100M share buyback just started with more to follow. Dividend up to 6.5% (which is only 33% or earnings), EPS up etc etc. Market cap more than the net tangible assets value. And they have just upped the guidance.

Market cap of £1.8bn - the £100m buyback fund (for the year) is pretty significant within that context; with 2024 guidance increased today, that indicates some £300m between between now and then earmarked for buybacks, which is 17% of the market cap. Mmmm.

[aimingupward2] 14/9/2022 09:33

Encouragingly good results and dividend increase this morning.

[aimingupward2] 12/8/2022 13:29

Pity anyone having to work on a building site in this weather!!

[robertball] 16/7/2022 08:58

Mulalley v Hyde court case yesterday found in favour of the Hyde. Cladding liability on the contractor not the developer. Good for Redrow?

[buywell3] 09/5/2022 08:28

Financials now stand on an edge of sorts

Builders need to provide piles of supports

All UK ones are now showing weak foundations

buywell expects that to spread to many nations

[buywell3] 23/3/2022 09:03

Housebuilders nearly all dropping today as many other sectors rise

IMO fight this at your peril

Rising rates are coming --- again and again and again

The market is starting to price this in but imo are playing catchup with inflation heading to 8% plus and still rising