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Realistbear

Barratt Results Released This Morning

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http://uk.biz.yahoo.com/080710/214/i2zs2.html

Homebuilder Barret Developments said it will incur a pre-tax write-down in the value of land and work-in-progress of approximately £85m for the financial year ended 30 June 2008. It has extended its existing £400m revolving credit facility to 2011, while the final dividend has been scrapped.

Listening to R4 this morning when they interviewed a VI from the trade. He said Barratt's sales are off over 40% and said the government ought to do something to help the industry. R4 chappie said why should they and all they need do is drop their prices so that people CAN afford to buy. Quite right.

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http://uk.biz.yahoo.com/080710/214/i2zs2.html
Homebuilder Barret Developments said it will incur a pre-tax write-down in the value of land and work-in-progress of approximately £85m for the financial year ended 30 June 2008. It has extended its existing £400m revolving credit facility to 2011, while the final dividend has been scrapped.

Listening to R4 this morning when they interviewed a VI from the trade. He said Barratt's sales are off over 40% and said the government ought to do something to help the industry. R4 chappie said why should they and all they need do is drop their prices so that people CAN afford to buy. Quite right.

Only someone who actually knows anything about business would consider dropping prices as a way to stay afloat.

House builders, it seems, are run by clowns and nutters. :blink:

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BARRATT DEV PLC 65.00 +20.37%

I have heard of a contrarian play but this one takes the cake!

B&B should be up another 25% today if rumours of their impending doom are still out there.

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BARRATT DEV PLC 65.00 +20.37%

I have heard of a contrarian play but this one takes the cake!

B&B should be up another 25% today if rumours of their impending doom are still out there.

I think the market thinks Barratt is oversold. If it now has sorted out its funding difficulties, it isn't in imminent danger of bankruptcy so there's a bit of bottom feeding going on.

Taylor Wimpey may be the one to get shorted now as its funding position still looks precarious

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I personally very much doubt their sales are down by only 40%.That would imply that whilst transaction are down 60%,the proportion of new builds being sold has ioncreased realtive to that at a time when mortgages for new builds are harder to get than ever. <_<

I wouldn't be so sure. The builders are the first to capitulate by reducing prices in a falling market so I would expect the market share of newbuilds to increase in the early stages of the crash while the sellers of previously-owned homes are still in denial.

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I personally very much doubt their sales are down by only 40%.That would imply that whilst transaction are down 60%,the proportion of new builds being sold has ioncreased realtive to that at a time when mortgages for new builds are harder to get than ever. <_<

Indeed. These people are desperate to show the market they are not on the verge of going to the wall. We live in a very dishonest era with corrupt expense accounts in Parliament, porkies from every government department with the latest relating to how many drivers will be worse off because of Brown's stealth car tax and house price stats that are seasoned, adjusted, manipulated and spun to the point of meaninglessness. It will all result in as massive drop in the level of consumer confidence---in anything.

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http://uk.biz.yahoo.com/080710/214/i2zs2.html
Homebuilder Barret Developments said it will incur a pre-tax write-down in the value of land and work-in-progress of approximately £85m for the financial year ended 30 June 2008. It has extended its existing £400m revolving credit facility to 2011, while the final dividend has been scrapped.

Listening to R4 this morning when they interviewed a VI from the trade. He said Barratt's sales are off over 40% and said the government ought to do something to help the industry. R4 chappie said why should they and all they need do is drop their prices so that people CAN afford to buy. Quite right.

I was listening too. Shame no one mentioned the real problem: the builders buying up all the land at silly prices.

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Is Barratts just a holding company now???

They've stopped all building. Stopped all land buying. Got rid off all their building staff (just who do they actually employee now?).

Given that the banks seem happy for them to not pay back their debts for a long time, will Barratts now just sit and wait this out.

Very annoying if they can do this... Hold on to all this land and not build.

Supply does have a big factor in UK prices and this is just going to get worse.

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There are still more buys than sells of Barratts shares this morning, although the price has fallen back from the earlier high. I can't fathom it out. Eventually, if the recession really sets in, I'd imagine housebuilder shares will bottom out and just drift up and down by the odd penny or two for ages.

But becuase the value of the companies are so reduced, much smaller cash investments or sales are needed to influence share price by a given amount.

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There are still more buys than sells of Barratts shares this morning, although the price has fallen back from the earlier high. I can't fathom it out. Eventually, if the recession really sets in, I'd imagine housebuilder shares will bottom out and just drift up and down by the odd penny or two for ages.

But becuase the value of the companies are so reduced, much smaller cash investments or sales are needed to influence share price by a given amount.

I can see this too.

If Barratts isn't building properties, isn't really selling properties, isn't buying land eventually its value will become the Value of its land bank less the value of its debts.

Inflation will decrease its debt but not the value of its land bank.

Given the banks don't seem to want it to go bust it - maybe Barratts is a good long term buy.

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Sanity must be returning, the 20% up has turned into just 8% up:

BARRATT DEV PLC (LSE:BDEV.L)

Last Trade: 58.75 p

Trade Time: 9:43AM

Change: 4.75 (8.80%)

IN the red by the close?

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IN the red by the close?

Haha maybe...

Without the leniency of its creditors Barratts would be bust.... Will the creditors continue to play nice? If so I think Barratts share price has reached about its bottom.

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If Barratts isn't building properties, isn't really selling properties, isn't buying land eventually its value will become the Value of its land bank less the value of its debts.

Inflation will decrease its debt but not the value of its land bank.

Except that the interest on the debt must be serviced. So if they owe 2 billion @ 5% they need to generate 100 million to cover the interest. They cannot do this by simply sitting on the land. If they sell the land to raise this sum they have the same debt backed by a smaller asset.

The banks are not going to be happy to have money tied up here when they could be getting a return on that money elsewhere. At the same time they are worried that they will lose a lot if the land bank is sold off by a receiver. Nor could they simply accept the land for the debt since it isn't worth that much. The most obvious move is they swap debt for equity at favorable terms. This effectively transfers shareholders money to the bank.

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The banks are not going to be happy to have money tied up here when they could be getting a return on that money elsewhere. At the same time they are worried that they will lose a lot if the land bank is sold off by a receiver. Nor could they simply accept the land for the debt since it isn't worth that much. The most obvious move is they swap debt for equity at favorable terms. This effectively transfers shareholders money to the bank.

but land and planning permission are real assets. not just numbers on paper.

with the right control you can squeeze the public as much as you please.

the more i see, the more i dislike this countrys ways.

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Some snippets from the trading update.

The review has been carried out on a site-by-site basis, using valuations incorporating

forecast sales rates, and average selling prices that reflect current and anticipated trading conditions. Particular attention has been

directed towards large, more complex sites, apartment blocks outside London, sites with low sales rates, and sites where upfront investment is relatively high. Whilst assumptions are site specific, on a broad portfolio basis, a decline of approximately 10% has been incorporated (note: this reflects a c. 5% decline already experienced in the latter part of 2007/8 and an anticipated c. 5% further decline in 2008/09).

10%?! Jokers. Hahahahahahahahahaha.

The Group continues to operate within its committed facilities and its current banking covenants. However, it is possible to anticipate market conditions where this may not continue to be the case, when those covenants fall to be tested in the future. As a result, we have agreed (subject to final documentation), a restructuring of our covenant package with our banks and private placement note providers well in advance, as an appropriate, prudent response to current market conditions. Specifically, under this agreement, the interest cover covenant is replaced with a cashflow covenant and the gearing and minimum tangible net worth covenants are relaxed.

Seems odd that they should have opted for a cashflow covenant. Surely that means they are going to have to generate sales at whatever price?

Specifically, we will de-leverage the business over the near-term, maximising cash realisation, whilst continuing to manage the balance between volume and margin delivery on a site-by-site basis.

This also suggests selling at whatever price they can get.

Maybe there is a realisation that their current prices are too high, though if they're anticipating a 10% decline I don't expect they are considering knocking very much more off asking prices.

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but land and planning permission are real assets. not just numbers on paper.

with the right control you can squeeze the public as much as you please.

the more i see, the more i dislike this countrys ways.

you cant devalue "real assets" with a pen and some paper.

fiat money you can inflate

land with "permission" you can change a law to make it easy to get said "permission" and devalue it

planning permission is evil

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BARRATT DEV PLC 65.00 +20.37%

LOL. I've been telling y'all that NOW was the time to buy the builders.

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  • 395 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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