Wolseley Share Discussion Threads

[oxfordrun] 16/7/2008 20:57

in my area alone i have heard of 5 builders with on average 50+ staff all closed sites and mothballed, some other sites are down to skeleton crews and with no urgency to finish, estate agents starting to lay off next week on the cards.

[lordwilson] 16/7/2008 20:16

The unknown is how many medium to small builders are going under and leaving Wolseley to pick up the tab ???? My guess is that we will see a lot of these type builders go under in the next six months and Wolseley and the like will be hit hard .

[kristini2] 16/7/2008 18:54

CR
TW/ BDEV have hit a brick wall in that no one is buying their houses. WOS is still supplying the construction market and the servicing sector supporting the construction industry.

I have been selling down from £4.70 and still short, however imo i do not see the meltdown to the extent that the builders have experienced in terms of share price and have been reducing my short positon exposure.

[oxfordrun] 16/7/2008 17:43

rights issue within a month imo

[liam1om] 16/7/2008 15:34

I totally agree Sam, the announcement this morning was far worse than anticipated and with the ongoing concern over the rights issue this will continue to fall.

I would not be suprised to see this within 160-180 within a week or two.

[sam79] 16/7/2008 14:41

WOS will be under 200p in a very few days time............watch it.

[royalt] 16/7/2008 12:23

I know. I close my short for 20 points. Not bad for a days work at 50 squid a pop. Reckon theres more downside to come in the afternoon session though..could see it down 15%..

[spob] 16/7/2008 12:20

shorters paradise

[royalt] 16/7/2008 11:48

Really is falling now isnt it?!

Down almost 10% and still no sign on stopping..

[royalt] 16/7/2008 10:08

280p seems to be holding quite well and acting as support. I wonder if it will break below that...

[spob] 16/7/2008 09:08

Spain Girds for More Pain as Housing Stalls

Supply Glut Coupled
With Recession Fears
Prolong Slowdown

By SUI-LEE WEE

Wall St Journal

July 16, 2008

Staggered by the collapse of developer Martinsa-Fadesa SA, the Spanish real-estate market is bracing itself for even more bad news.

Analysts say a glut of unsold new homes, tighter credit conditions and fears of a looming recession will likely further weaken the Spanish housing market, which is facing its longest protracted slump in recent memory. They predict it will be one of the hardest-hit housing markets in Europe.

Martinsa-Fadesa -- which primarily built hotels, shopping centers and condominiums -- filed for protection from creditors Tuesday. The news sparked a selloff in the stocks of other construction-related companies and home builders on fears that Martinsa-Fadesa could be the first of many distressed firms in the real-estate sector. Shares of Sacyr-Vallehermoso and Inmobiliaria Colonial, both large residential developers, fell 8.4% and 12%, respectively.

"A continuation of the slowdown is very strong on the cards," says Michael Ball, author of the European Housing Review from the U.K.-based Royal Institution of Chartered Surveyors. "The Spanish situation is one of slowing demand and excessive supply."

For a decade, the Spanish housing sector enjoyed uninterrupted growth, as low interest rates encouraged borrowing. Average house prices have nearly quadrupled during the past 10 years. About 750,000 homes were built in Spain in 2006 -- more than in France, Germany and the U.K. combined.

Unlike the U.S., Spain's mortgage lenders haven't made the same high-risk "subprime" home loans that triggered the housing bust here. But the credit and investment policies pursued by the lenders have been excessively risky, raising "some serious questions regarding the solvency of certain financial institutions," according to Lorenzo Bernaldo de Quirós, president of Madrid-based Freemarket International Consulting.

Rising interest rates have now severely crimped demand for homes. Spanish house prices fell 4.3% over the first half of this year, according to property Web site facilisimo.com. Facilisimo's figures differ from government data, which showed house prices rising 2% in the second quarter, compared with a year ago. Still, using the government's data, it is the slowest rate of increase in a decade.

The Bank of Spain says there were 108,275 new housing permits in the January to March period, down 36% from a year ago. Mayte Ledo, chief economist of Europe for Madrid-based bank Banco Bilbao Vizcaya Argentaria SA, estimates that 300,000 to 400,000 new houses will be built in 2008. In 2007, there were 650,000 permits for new houses.

"The downturn is going to be deep and prolonged, at least for the next couple of years," says Mr. Ball, of the European Housing Review. In particular, he says, the outlook for holiday homes along the Costa Del Sol -- which are mostly owned by Northern Europeans, mainly Germans and Britons -- looks "extremely grim."

Bart Gysens, a property analyst with Morgan Stanley in London, forecasts that the Spanish residential market will stabilize by 2011 at the earliest and that house prices will fall by 25% from peak to trough.

MORE FROM THE PROPERTY REPORT


• Australia's Centro Will Sell Bulk of its Fund's U.S. Malls
• Plots & Ploys: Record Store Closings
• Blueprint: San Francisco Office Market Calls to Bargain HuntersAside from Martinsa-Fadesa's bankruptcy filing, the housing downturn has taken a toll on other Spanish real-estate companies as well. Among the hardest hit so far are Inmobiliaria Colonial, which is trying to sell assets to reduce €9 billion ($14.32 billion) of debt; and Afirma Grupo Inmobiliaro -- formerly known as Astroc Mediterraneo -- which was forced into a merger with two other companies after its share price collapsed. Both companies build homes as well as commercial property.

Inmobiliaria Colonial's stock has lost nearly 91% of its value in the past 12 months. The company declined to comment, saying it "is currently going through a changing process."

Banks that have fed the housing boom are also set for a fall. Bank lending is heavily biased toward real-estate development and construction, with lending to these sectors representing nearly half of all bank loans, according to data from the Bank of Spain. Delinquencies in residential-mortgage-backed securities increased in the first quarter of this year, as higher interest rates weighed on borrowing capacity, according to Standard & Poor's.

Low interest rates were a potent stimulant in Spain. The European Central Bank -- which wanted to boost slowly expanding, big economies on the Continent -- kept interest rates low for much of the first part of the decade, often lower than the rate of inflation in Spain. That encouraged Spaniards to borrow money.

Then, last year, the global credit crunch hit. Spanish banks tightened their lending standards during the first quarter of this year, according to a survey by the Bank of Spain. According to the Bank of Spain, which asked 10 Spanish banks in April about their lending habits and their outlook for the second quarter, banks were much stricter about authorizing consumer loans, while their standards on mortgage and corporate lending were moderately higher.

[spob] 16/7/2008 08:59

From The Times

July 16, 2008

Spain's largest property developer collapses
Steve Hawkes and Heath Ashton

Fears about the extent of the economic problems facing Spain intensified yesterday when the country's largest property developer filed for bankruptcy.

Martinsa-Fadesa, whose interests span apartment buildings, hotels and golf courses, said that it had been unable to secure a €150 million (£119 million) loan from the banks and creditors that hold its €5 billion of debt.

The move sparked panic in Spain's financial community, deepening concerns that the Government may be forced to step in to shore up property companies struggling to cope with a collapse in the housing market.

Alejandro Varela, a fund manager with the Renta 4 brokerage, said: "If this happens with one of the big ones, who knows what is happening to the medium and small promoters. The problem is debt. These companies grew very fast thanks to generous financing from the banking sector."

Related Links
Housebuilders forced into desperate measures
A built - in negative equity package
Three of Martinsa-Fadesa's creditor banks - Banco Popular, Caja Madrid and La Caixa - said that they had made provisions totalling €542 million against their exposure to the company. It was unclear whether Santander,

the bank that has bid £1.3billion for Alliance & Leicester, had any significant exposure to the company.

More than 700,000 houses were built in Spain in 2006, more than Britain, Germany and France combined, but the market ground to a halt last year amid rising interest rates and tighter lending conditions from banks worried about the sub-prime crisis in the United States. House prices in the country are falling at the fastest rate for a decade.

The downturn has spread to the wider economy. Pirelli, the Italian tyre group, has shelved plans to open a factory in Spain and Roca, a bathroom ceramics company, has cut 400 jobs.

[kristini2] 16/7/2008 08:20

40p down, i thought this would fall at least 80p on the update!!
i guess the market is taking a positive view on the cost controls, however there is much to get through for wos in the shorter term

[roryb] 16/7/2008 08:10

Not really falling is it....

[marko1961] 16/7/2008 08:06

spead betters got this one wrong they said down 40p lol

[oxfordrun] 16/7/2008 07:47

1.00 here we come

[royalt] 16/7/2008 07:44

Outlook

§ Focus on taking actions necessary to ensure the Group remains within borrowing
covenants

RIGHTS ISSUE!!?

[hybrasil] 16/7/2008 07:20

With the dividend gone and gloomy predictions this will plummet today

[m.t.glass] 15/7/2008 14:02

LONDON (Thomson Financial) - Investors are bracing themselves for another
weak performance from Wolseley Plc when the plumbing and building materials
distributor updates the market with a pre-close trading statement on Wednesday.
The group, which is being hit by the weak U.S. residential housing market,
will report on trading for the 11 months to June 2008, ahead of its full year
which ends later this month.
Given last week's gloomy news from the UK house building sector, there is
strong evidence to suggest the contagion has now spread to its domestic market.
Panmure Gordon, which last week cut its earnings forecasts for the group,
does not expect it to be an upbeat read.
Recent reports suggest the group may be planning to issue a profits warning
amid the sharply deteriorating market conditions for the UK housebuilding
sector.

[oxfordrun] 14/7/2008 20:21

strange reaction to job losses !! nil

[crosswire] 14/7/2008 14:51

Week ahead: Wolseley, Premier Foods, Bradford & Bingley
Fri 11 Jul 2008

LONDON (SHARECAST) - Plumbers' merchant Wolsely has suffered severe collateral damage from the slumping US and UK housing markets, with the share price standing at about one-quarter of the level it was at a year ago.

The highly acquisitive company has funded its growth through the accumulation of debt, and the market will hope for an update on its debt situation when it makes its trading statement on Wednesday.

Hovis and Campbell's Soups owner Premier Foods is another stock to have shed three-quarters of its value over the last year as it wrestles with soaring raw material costs. The group said in May that it had passed on most of the increases in foodstuff costs seen last year.

Bradford & Bingley will hope to finally settle its rights issue saga at its deflayed Extraordinary General Meeting on Thursday.

[sammy62] 12/7/2008 17:57

hi there namesake, what makes you so sure? is it related to the company itself or the wider macroecomics or both!

[sam79] 12/7/2008 16:11

WOS will be 100p very soon, you all have heard it on here first.
XTA and GSK also very strong SELL and RUN.