Taylor Wimpey Share Discussion Threads

[marksp2011] 11/1/2019 07:51

JLR etc have a bigger issue
They have been making their $$ through car leasing and making decent profits reselling return off lease cars. Big Diesels coming back off lease have a lower residual value than anticipated and this is going to impact the financing as they are now selling at a loss in to a market where they can't sell new.

Watch the banks :(

[omg48] 10/1/2019 17:21

a name that will go down in political history with such greats as Dianne Abbot :-)

[steeplejack] 10/1/2019 16:55

I don't suppose Anna Soubry would agree with you.

[hernando2] 10/1/2019 15:42

The cycle is driven in part by the availability of finance for the buyers, in the past lenders overstretched and were caught out by sharp moves in interest rates.

Or did daft things like borrow short and lend long. Bradford and Bingley after Building societies were allowed to borrow on the markets rather than financing from savers.

Also they tighten / loosen lending criteria to manage their book.

Finance is is also influenced by bad debt on the behalf of the lenders, back in the 80's when there was a 'crash' , homeowners were simply chucked out , the house repossessed and sold cheaply at auction and the debt cleared off the books. The house builders basically closed down operations through this period.

In the 2008 crisis, that did not happen anywhere to the same extent and house builders were kept afloat by the banks , they couldn't afford for them to go down with the amount of debt they held and i am sure the Government said , we don't want a repeat of those repossessions, politically it was a nightmare back in the day.

I knew someone who worked for TW and they told me the n the share price was about 24 / 30 that that everything was OK and it was safe to buy the shares...I didn't and had yo get in after the brexit vote, still 4 times higher!!

[dr_smith] 10/1/2019 15:19

DD. Interesting read, thank-you.
I suspect the project style you describe is co specific, which co's have you seen it in?

I like to think I am good at economics, but have never understood common statement that the sector is cyclical.
It is only cyclical if something goes wrong and BofE interest rate and other policies do everything to avoid this, so consider cyclical to be a misnomer.

One fly in ointment is that gov want more houses to keep up with population expansion and address backlog shortfall accumulated over many years.
I believe build rate is presently somewhere around two thirds of gov targets.

If builders did try to address this and go for gov targets, gear up with a bigger workforce etc, then once gap plugged, it would mean the boom and bust we want to avoid.
I therefore agree with you that management are managing THEIR agenda better these days in expansion that is comfortable for co and not a higher expansion the government may crave.
Slow and steady is better and avoids that cyclical misnomer that doesn't do anyone any good long term.

Dave

[disneydonald] 10/1/2019 14:26

For what it’s worth, builders are much better at managing the cycle these days; they have learned some lessons. They now no longer just build houses and hope to sell them, as they operate much like a build to order model only building slightly ahead of confirmed orders, so if slowdown occurs they can reign in quickly to avoid unsold stock. Hence focus on order book. Also, they are more focused on larger sites which may have multiple outlets on each, with separate building teams supporting those individual outlets. For example each team running independently of each other building ~40 units and managing their own just in time material deliveries in their own site compound. This new operating model allows management to keep on top of the situation and adapt to market conditions as necessary. Finally, review builders cash flow and stock turn metrics which these days confirm underlying efficiency, closer to lean manufacturing than used to be the case. All in all, they are now a much more professional and better able to manage the traditional cycle.

[1carus] 10/1/2019 14:22

S64, when I graduated back in 1990 I think an average graduate starting salary was 16-18k outside of London. It doesn't seem to be that much different nearly 30 years later. House prices are not the issue, salary suppression seems a bigger problem for me. Bought a 4 bed detached in Corby back then for 71K just over 2 * joint income with a 2k deposit. Same house now is 270k. Same 22 year old today cant do that. Salaries would need to be around the 50k mark for the kids.

[stewart64] 10/1/2019 13:52

I think the Government is trying to flatten the housing cycle with measures like HTB. So builders unlike the general housing Market may prosper under any point of the cycle.

Of course the Market has been all over the place since the bust of 2008. Prices in the north of England have barely moved since 2004, 15 years ago. In the same area prices tripled every decade between 1964 and 2004, so claims we are now at Peak cycle take some explaining from a historical perspective.

[steeplejack] 10/1/2019 13:35

Good post Stewart.

Do you think that the inherent cyclicality of the UK house building market is reducing,being “flattenedR21;out?I’d be interested in Jugear’s opinion too.The market is still applying a rating to housebuilding stocks that discounts good old fashioned boom and bust.

[stewart64] 10/1/2019 13:07

The economy may well go down after Brexit, though of course May's deal is pretty much all the benefits of membership without freedom of movement, so unlikely re. the deal on the table. But the point is with the TW price the Market has already decided the economy is going off the cliff. When TW was at 127 ( and you can discount 20p off that because unlike other FTSE 100 companies it had the cash in the bag so more like 107p, like for like. Was an adjusted price to earnings of 5.5 warranted.

Yet the same people that think that is about right, are quite happy to pay for "growth" shares in the 100s of p/e.

Not questioning the gravity of Brexit just whether the Market is overly marking down some domestics the prices of which defy logic unless we are already in a depression, which we are not.

[wbecki] 10/1/2019 12:53

Whitehorses
‏@pinkmonkeygin
7h7 hours ago

My husband works for JLR. Job loses are NOTHING to do with Brexit. It’s due to the fact that no-one is buying diesel cars as they are put-off by the costs and restrictions. Blame #Sadiqkhan plan to ban diesel cars from London. Blame China for not buying JLR cars. #fakenews #gmb




"There is also the simple facts that for most
a) JLR's are mostly bloody expensive
b) There's only so much appetite for credit to buy/lease these expensive vehicles"

[hernando2] 10/1/2019 12:52

90% of their cars /vehicles are diesel, nobody in their right mind is buying a diesel car...sure Brexit has been tied as a cause but i go with the numbers...BTW have look at other car manufacturers none are hiring or increasing production..apart from in the Electric area.

[baracuda2] 10/1/2019 12:44

What people need to realise re brexit, we haven't left yet, JLR are making 5000 redundancies, other manufacturers aren't investing so I think the wake of brexit is yet to be felt

[essentialinvestor] 10/1/2019 12:11

Let's be honest, none of us know the extent of Brexit re the economy.
It could be mild, it may be more serious - we have not left yet.

The UK claimant count has been rising for much of the last year,
it usually proceeds increases in unemployment.
Now this could be Brexit uncertainty, it could just be the wider economic cycle.

[stewart64] 10/1/2019 09:45

I agree with m4rtnu in terms of nothing actually changing, especially on the Home Front where Brexit looks as intractable a problem as ever. Maybe folk waking up to the fact that UK plc is a bit more robust than thought and can withstand the 650 MPs attempts to bring it down.
I walked past a development of New builds this morning in one of the worst suburbs in the East Midlands..The Meadows, Nottingham. They have only been released since the New Year and already the site is plastered with sold signs. The fear just isn't matching the reality except ( as I previously mentioned) you are an SJW renting in Oxford. Then sure million pound Victorian factory workers cottages don't make sense. The whole country is not Oxford.

[wbecki] 09/1/2019 20:25

"The blog is up to speed with the latest broker views of the day’s developments but it is very much news of the day.I actually edited that post of mine from Alphaville to make it more user friendly for you!"


If you C&P it into notepad first it usually gets formatted correctly - then copy from note pad to Advfn.Presentation fine!

[m4rtinu] 09/1/2019 18:58

Very happy with the rally in TW and indeed other shares, BUT not sure what has caused the general New Year rise. Markets could just as easily fall back down, as things are very volatile at present. Brexit, global trade wars and potential recessions in some countries. Also, government finances (eg Italy) and personal debt (eg UK) are risks

TW's update couldn't have done anymore to reassure about current fundamental value. Going forward, more difficult to predict how economy and house builders will do.

[steeplejack] 09/1/2019 18:38

As Lord Gnome says a simple cut and paste from Alphaville.Everyday a financial blog affiliated to the Financial Times opens a discussion forum at 11am to discuss the day’s results etc.Its free and you can sign up.The blog is up to speed with the latest broker views of the day’s developments but it is very much news of the day.

I actually edited that post of mine from Alphaville to make it more user friendly for you!The day’s discussion is about everything from Gregs to Taylor W. with interjections from participants.The blog takes the broker views disseminated to customers in response to the RNS.Pretty simple really.If you have holdings,on results day it’s easy to get up to speed by logging into Alphaville.

[lord gnome] 09/1/2019 17:43

Jugears - for the uninitiated, I.e. you, steeplejack's Post was a cut and paste from Alphaville. If you don't know what that is, then DYOR and google it.

[jugears] 09/1/2019 17:23

steeplejack, not sure if your post was meant to be positive or negative.

[mayzerg] 09/1/2019 17:05

https://helpingthelittleguy.com/the-tobacco-and-home-builder-sectors-an-unlikely-pair-in-a-volatile-market/

[wbecki] 09/1/2019 15:59

@Tlobs2

Indeed.
Still bad workman and his tools - that is why it is unpresentable.
Probably C&P'd on his smartphone.

[tlobs2] 09/1/2019 15:41

Congratulations steeplejack.

That is probably one of the most unreadable posts ever on ADVFN :-)