They reported;
http://www.digitallook.com/news/rns/20899760-11178/BVS-Interim_Management_Statement_htmlDavid Ritchie, Chief Executive, commented:"The ongoing success of the Group's growth strategy has driven strong trading in early 2013. Homebuyer sentiment has been improving and, with the recently announced Government initiatives, sales rates have increased ahead of management's expectations. The increased number of active sales outlets in excellent locations, delivered from the Group's assertive land buying over the last few years, provides a great opportunity to take advantage of the improving market backdrop and further strengthen shareholder returns."Current tradingTrading in the 19 weeks to 10 May 2013 has been strong with the Group achieving 989 private net reservations (2012: 783), a 26% increase year on year. This has been driven by an 11% increase in the average number of active sales outlets to 91 (2012: 82), and a 14% improvement in the average private sales rate to 0.57 net reservations per site per week (2012: 0.50). The number of visitors to the Group's sites has increased by 29% in the year to date compared to the same period last year.
Valuations of these companies may well be stretched already, but momentum is with it and the sector is likely to remain bullish given the size of Government intervention. It is unlikely that Government will do anything to harm this sentiment given the importance of the home owning/desire for ownership vote that exists in the UK. Regardless of who the Government is, they are likely to throw taxpayer money at the housing sector if at any stage prices look to be lagging or demand is down because people can't afford to buy because prices are too high. Their answer to high prices is always to provide subsidies to buyers, I doubt that will end any time soon.
Trying to decide when to sell some of these. Barratts released one of the best trading statements i have seen but the SP didnt move much. May hold for another two months until the final results and divi announced. They have had a good run but not looking cheap anymore.
ReplyDeleteDifficult to say, as there is a lot of good news already built into the price of many of the UK house builders. However, given the potential size of Government intervention to come which will last at least 3 years, it is difficult to see how these companies will not make money. The only question mark is whether the market will want to tolerate the racy valuations placed on these companies going forward.
DeleteFor now, they have momentum and are priced for growth, value is difficult to find and dividends small offering little. Other than a more wider market correction it is difficult to see why these would fall in a big way, at least not until the debate about whether the Government funding continues in 3 years time.