malj1
05 Nov 2019
Re: dish washer? No surprise. As the pols won’t a/ speed up & simplify the planning syst, b/ facilitate the builders utilising their cash reserves or c/ cancel SDLT then the only option is keep on extending h2b.
Eadwig
05 Nov 2019
Re: dish washer? Apparently Labour have announced their intention to extend help to buy to 2027 today. As you say though, despite what critics say about the big boys sitting on land banks to limit supply, I see no evidence of it. In fact a year or two ago when a fuss was being made of that PSN announced they had work in progress on EVERY site on which they had completed planning permission. What else can they do?
malj1
05 Nov 2019
Re: dish washer? No. But not surprised. For almost 4 decades UK housing construction has flatlined at ca 190k units pa. The primary exception was post the CC when starts fell to ca 90k units, a sub Victorian level of supply. It is plain that this remains the case, though right now the builders are accelerating supply by driving work in progress, but without increasing the pipeline & so running for cash. The pols have 2 primary propositions: labour = rob Peter to pay Paul & tory = rearrange the deckchairs. In short both approaches are a waste of space. But of course who am I to talk? As everyone in the House Of Clowns knows houses grow on trees (also that 2+2=5, water runs uphill & birds can fly backwards). As I said, there is no operationally viable policy incoming from Coco & gang.
Eadwig
05 Nov 2019
Re: dish washer? Did you see this released today? BBC News None of pledged starter homes built, says watchdog Government plans to build 200,000 affordable homes in England have come to nothing, the National Audit Office says.
malj1
05 Nov 2019
Re: dish washer? I do listen to what the politicians of all stripes say. Consequently I end up being v frustrated at the comprehensive lack of any credible policy to actually grow the economy. Further I have yet to hear any policy regarding the house build industry which is operationally viable & could facilitate increased supply. So my view remains new build will peak at ca 200k u pa at best for the foreseeable future & next year it will drop a chunk below this. Secondary supply is now the lowest it’s been for about half a century. Given the embedded demographic need, which will relentlessly not just grow but actually accelerate in the coming decade, supply-demand imbalance will become extreme. This just relates to annual run rates. Factor in the historic undersupply plus the comprehensive lack of replacement housing in order to maintain quality & the position becomes more extreme. At some point, as ever I just don’t know when, a massive burst of hpi will occur. But if, either way, 12/12 is a brexit conclusion, then cash buyers will return along with possibly interest rates being cut. That could be ‘interesting.’ For a credible housing policy the pols need to be explaining a/ where the land comes from, b/ where the money to buy the land comes from, c/ where the materials come from (there is no spare capacity & there has been no investment to increase capacity for 4 decades) & d/ where the labour comes from. To build an extra 100k units pa the land cost is £50bn min (ca what the gov’t stumped up to refinance the banks) & labour requirement is 0.5m to build the units rising to 1.75m factoring in supply of materials, services & ‘stuff’ that fills houses. This means major immigration, as no one pours a quart out of a pint pot, which means at least another further 3.5m immgrants which in turn raises the housing need. So fat chance. HPI will return, big time. None of the pols is anywhere close - as big a bunch of braindeads it’s been my misfortune to deal with.
Eadwig
04 Nov 2019
Re: dish washer? malj1: So vote BoJo, I know you want to … I’m surprised to hear you say that after his attack on the housebuilders at his last conference speech and promises to bring them to book. I’m personally hoping he’s forgotten all about his promises to make the big six pay!
frog_in_a_tree
04 Nov 2019
Re: dish washer? There again Malj, according to all the economic opinion, a Johnson type Brexit will result in stalled economic growth, job losses and more companies decamping to the eurozone. That adds up to a reduction in demand for housing. So best is to vote for a Remain leaning party in my view… Cheers, Frog in a tree
malj1
04 Nov 2019
Re: dish washer? So CRN. Something of a problem child. My take is. New CEO = kitchen sink (aka reprice/rebase my options). Ca 13 yrs l/b cvr = no operating constraints, no need to buy land, so highly cash generative & dy pretty secure (ca 9%). Halting l/b sales gd – rather have them build the l/b out rather than job lot it off. Increasing sites & housing mix will reduce operating margin. Profits decline through 19 until bottom in 20. Thereafter turnaround. I’m working on an assumed op% ca 11%. This makes them a good hold, given the dy 9%, but not to buy more right now (given the other stuff I can see). However, the broader housing market remains as known. Accelerating demand/need vs pretty much nil supply. Nowhere is more constrained than London, se , south & mid level properties. Ie where CRN are positioned. Though starter mortgage/h2b transactions roll on, discretionary cash buying has stalled. The market is progressively freezing from the top down (in this sense CRN are a sort of MCS variant). So I wait to see what happens. If BoJo wins then my take is these come on stream in the aforementioned areas, producing significant hpi, leading to CRN having a very sharp recovery – a kind of what goes down must come up. So vote BoJo, I know you want to …
malj1
16 May 2019
Welcome boost In the broader housing market hpi is already in sharp turnaround. I believe this will be showing +10% yoy at least by end 2019. This will flatfoot many, both in the housing & share markets. So I see this as a minimum. The turnaround will as ever be sharpest in London/se/s (where undersupply is greatest). This will be grist to CRN’s mill.
marktime1231
15 May 2019
Welcome boost Agreed, all the downside and more priced in and none of the upside despite conservative progress, financial resilience blah blah I am already overweight here but will be looking to add again this Summer, this is dirt cheap high yield and with prospects over other cheap high yielders in my portfolio facing more certain decline
malj1
15 May 2019
Welcome boost Yes a v sharp headline turnaround taking place. T/o clearly set to rise strongly. But only the formal h yr a/c will show what is happening on margin - a t/o increase driven by prs will dilute op%. Also the cash generation has come I suspect largely from jobbing off land - but with a v v long l/b CRN could keep this going quite a while. The UK housing supply-demand imbalance is massive & set to acceleratingly worsen. CRN sp says little about the company but everything about brexit & the general panty wetting in the market etc. As ever the bargains are there to be had when there’s blood in the streets. This is one.
marktime1231
15 May 2019
Welcome boost Cursed CRST. A very quiet trading announcement this morning completely ignored by the market after an early fibrillation. Anyone looking to add? Solid 4.2% increase in H1 revenues to £792M. Strong improvement in debt / creditor position about a £41M swing to the good. Resilient forward sales 11% up, albeit retail sales 4% lower than a year ago. Build cost inflation still a negative pressure at 3-4%. Market statement that CRST has made good progress implementing its turnaround strategy eg pausing growth to control costs, unlock land value, increase cash flow in order to improve dividends. Full year outlook unchanged due to ongoing uncertainties, but that smacks of understatement, surely the dividend has to rise or maybe a special/buyback if the strategy is succeeding. So we remain at a sp of about 370p so a p/e < 6 and a yield covered twice over at 9% and I am sure this is set to rise. We are in a perfect storm for housing, the government boosting new build sales via HTB, calm market prices, generationally low mortgage interest rates, record high employment rates, real wage growth … what more is it going to take the return of MIRAS?
marktime1231
26 Mar 2019
What was that about housebuilders? A nugget in the AGM notice from CRST … “With stable pricing in our key markets and sales rates consistent with previous guidance, our forward sales position is encouraging, having already secured over 50% of our open market sales for the year. At £686m, our total forward sales positions us well to deliver both revenue and volumes similar to last year and continue to improve our cash generation.†Er, so, despite all the gloom which commentators want to heap on the housebuilding sector, and the likes of Jonas Crosalnd at IC on 29 Jan announcing CRST as a pre ex-div SELL at 380p on a p/e of just 6.3 … Wow. Already over half way to annual sales target and it is not even the end of March. With that sort of progress revenues and cash generation will grow beyond 12%, it just remains to be seen what has been achieved with cost control and a strategy towards better delivery of value to shareholders … but I am now very confident the dividend is safe and expect more good news is to come, there may even be a special or a dreaded buy back on the cards. Not sure the reaction today is because CRST has poached GFRD chief executive Truscott. GFRD has been dogged by problems in its civil engineering contracts the full extent of which has been obscured by similar techniques used at CLLN, is it out-of-the-frying-pan or a shrewd move “for personal reasons�
marktime1231
26 Feb 2019
Welcome boost to the sp today, mostly a kick up from the as-expected good results from those bad boys PSN. I am not a chartist but it also felt this morning like there was a breakthrough in the CRST share price, something had been holding it back even though we are approaching a splendid dividend. I am with Woodford (even he must get one right eventually) on CRST and have high hopes that this will recover its sp, while paying out a top drawer dividend in the meantime. For some reason a builder only delivering 18% margin in a quiet market has been marked down … ok, so CRST looked ordinary compared to those companies fleecing HTB and those who gorged on overseas cashbuyers in London, but if it is a sustainable business then a p/e of 6 is ridiculous. So, could it be sustainable, building volumes are holding up despite all the gloom? The question then is whether this problem of cost control at CRST has been over-stated and whether new management is producing better fundamentals. Actually if fundamentals do get turned around then this is a 500p share, but there are as many against as for.
Greyinvestor
29 Jan 2019
Full Year Results out Full year results out today. Below my expectations in October (which were below ‘then’ analysts forecasts). EPS 55.7p v 66.1p PBT £176m v £207m So results down on last year, and the second half showed a deterioration over the first half. Dividend held, still covered 1.7 times. Significant Brexit effect, low confidence, plus a stamp duty effect. Cost price inflation with house prices falling. All a bit grim. I’d now hope for 50p EPS next year, but that could be a struggle. All depends on Brexit and confidence. Net cash now £14m v £33m. A weak Hold for me, because of the dividend. They need to get a good F.D. on board. 25% staff turnover - crazy. Maybe a good H.R. director too. I can’t say that I’m suprised; I can see this going on every day in the South East. CRST are just in a difficult place.
