persimmon and uk housebuilders

[underg]

housebuilders seem to be gradually going up day by day to all time highs now except for bkg or rdw.psn important cause it pays a hefty divi soon on march 5th and also in june.how far are they going to keep going?

[dmedin]

Maybe they will start building houses for people to live in as opposed to 'assets' for Russian gangsters and Arab princes to sink their money into and leave uninhabited?  One can dream.

[underg]

crest Nicholson announced it will suspend the next dividend,now down 25% for the day,following in the steps of bkg,now all the other housebuilders could come out with same anouncements!

[Bopperz]

I hope you didn't enter a long position after you first post! :s

 

Edited March 19, 2020 by Bopperz

[underg]

normally shares in the same sector move together,today apart from crst's -25%,persimmon was down less than 1% today,vistry 2%.barat 8,redrow 10%.on Tuesday when most builders were down Berkeley was up 3%?!!

[Clarky5150]

Hopefully the reaction to Crests pulling of the divi was noted by the likes of TW and they will hold firm. Probably not though.

[underg]

todays article on IG says some cash rich companies will not have to cut divis and will survive including barrat,berkeley persimmon,taylor,however it contrasts with this analysis by UBS analysts that more housebuilders will cut divis:

Uk Homebuilders: Save That Cash (1240 Gmt)

There's been quite a lot of dividend cancellations among UK homebuilders: Crest Nicholson, McCarthy and Stone to name a few. ...

"We think others in the sector will follow to suspend / postpone dividends for the timebeing to protect balance sheets in these uncertain circumstances," write UBS analysts.

"Focus will now shift to cash burn in an scenario where business grinds to a halt," it adds.

Highly intuitive the thought behind that: as more and more cities go into lockdowns, demandfor new homes could freeze. But with cash not coming in, homebuilders still have big fixedcosts.

"This is unprecedented because in 'normal' economic downturns homebuilders are highly cash generative," UBS writes.

As homebuilders enter the saving mode, which one has the most solid balance sheets?

Here is UBS' analysis of homebuilders in the UK:

Berkeley is at -31% net cash

Persimmon -4% net cash

Barratt 9% gearing

Bellway 16% gearing

Taylor Wimpey 17% gearing

McCarthy & Stone 17% gearing

Redrow 18% gearing

Vistry c40% pro-forma

Crest Nicholson 41% gearing

(Joice Alves)

 

[OrangeJuice]

@underg -  would you mind sharing the UBS link to the article?
What does 'gearing' mean?