nice starting point..

Questor (Telegraph) today:


http://www.telegraph.co.uk/finance/markets/questor/8638604/Questor-share-tip-Barratts-margin-plan-is-built-on-strong-foundations.html

BDEV

from the TELEGRAPH - 7:00AM - 15 Jul 2011

Questor share tip: Barratt's margin plan is built on strong foundations
One the whole, yesterday's update from house builder Barratt Developments was good. However, the shares fell 6pc as the market fretted about the future. Questor thinks the falls were overdone.

Barratt Developments
105.9p -5.3
Questor says BUY

Barratt Developments
Barratt sold 1.8pc fewer homes in its last financial year, which ended in June, because it is focusing on business with good margins instead of volume. Indeed, in the second half of the year the operating margin increased to 7.8pc from 5.9pc in the second half of 2010.

The group sold 11,171 units over the year, with the average selling price for each property rising to 204,000, up from 195,000. It sees volumes rising 5pc to 10pc in the new financial year, based on improving trends in the second half. This will be the highest level for three years.

The company also expects to return to profitability (before exceptional items) this year, guiding to pre-tax profits of 40m. This is at the upper end of analysts' expectations, with current consensus shown in the graphic at 33m. Last year the group posted a loss of 33m, once exceptional items were stripped out.

This time there will also be exceptional costs of about 55m, mainly due to cost associated with a refinancing and the cancellation of interest rate swaps. This should push the headline figure into the red, but this has been known by the market for some time.

Net debt was 330m at the end of the year, which is lower than guidance. This means analysts will have to reduce the amount of expected interest payments in their models, which is a positive. The company has refinanced and has 1bn of committed facilities for four years.

The company also said that the Government's shared-equity scheme, called FirstBuy, was working.

However, the share-price reaction indicated that there are obviously some negatives. Firstly, the outlook statement appeared more cautious than its peers. Mark Clare, chief executive, said that trading conditions in some areas outside London and the South East were "challenging".

There was also no sign of the dividend being reinstated, but this was unlikely anyway.

However, as the forecasts show, at least some analysts had been hoping for a payout resumption.

There were also negative comments from Robin Hardy, an analyst at KBC Peel Hunt. "The risk is that Barratt's London exposure blinds investors to the wider risks of a national, volume house builder," he said. "It is now alone in having material debt, has no surplus assets to sell and is making 300 basis points less than its cost of capital, even by 2013. Exposure to London is not enough to counter that." He thinks that overbuild could be a risk in London and hit prices hard.

Of course there is no doubt that things are tough out there for all house builders. However, Questor still thinks the shares are fundamentally undervalued and yesterday's fall has created an opportunity. Mr Hardy's bearishness about London also seems excessive.

The shares are one of Questor's tips of 2011 and they are up 19pc this year compared with a FTSE 100 down 3pc. Trading on a June 2012 earnings multiple of 14, falling to 8.3 in 2013, the shares are a buy.

The Independent

Outlook
Barratt, the UK's largest house builder by volume, expects to announce it returned to the black over the year to the end of June.

Looking at a steep fall ahead.

RNS Number : 2010O

Barratt Developments PLC

14 September 2011

14 September 2011

Barratt Developments PLC

Annual Results Announcement

for the year ended 30 June 2011

Mark Clare, Group Chief Executive commented:

"We have made considerable progress in rebuilding profitability - by optimising selling prices, improving operational efficiency and securing new higher margin land. Whilst we expect progress to continue, further recovery in the housing market remains dependent on improving economic conditions and the ability of our customers to secure mortgage finance."

Highlights

-- Total completions, including joint ventures, for the full year were 11,171 (2010: 11,377)

-- Private average selling price (excluding joint ventures) up 7.4% for the full year to GBP198,900 (2010: GBP185,200) due to active management of mix

-- Overall underlying selling prices were stable for the period, but with regional variations

-- 50% increase in operating profit before operating exceptional items to GBP135.0m (2010: GBP90.1m)(1) , with full year operating margin before operating exceptional items increasing to 6.6% (2010: 4.4%)

-- Second half housebuild operating margin(2) of 8.0% against 5.9% for the previous year

-- The Group returned to profit before exceptional costs for the full year(3) of GBP42.7m (2010: loss of GBP33.0m)

-- Refinancing package in place providing the Group with c. GBP1 billion of committed facilities and private placement notes, improving balance sheet efficiency

-- Net debt of GBP322.6m (2010: GBP366.9m) as at 30 June

-- Net tangible asset value per share of GBP2.11 (2010: GBP2.08 per share) at 30 June 2011(4)

-- For the first 11 weeks of our current financial year, we achieved average net private reservations of 183 per week, 10.2% above the same period last year. On a per active site basis this equates to a private sales rate of 0.49 (2010 equivalent period: 0.48)

(1) Profit from operations was GBP127.3m (2010: GBP74.3m) after operating exceptional items of GBP7.7m (2010: GBP15.8m)

(2) Housebuild margin is profit from operations before operating exceptional costs for the housebuilding segment divided by revenue for the housebuilding segment

(3) After exceptional costs of GBP54.2m (2010: GBP129.9m) the Group made a loss before tax for the year of GBP11.5m (2010: GBP162.9m)

(4) Net tangible asset value per share calculated as net assets, less intangible assets and goodwill, divided by number of allotted and issued ordinary shares

-ends -

Latest Broker support for BDEV.... Hemscott premium.....

Barratt Developments PLC

FORECASTS 2012 2013
Date Rec Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Panmure Gordon
20-10-11 BUY 86.80 6.68 144.00 11.20 2.50

Arbuthnot Securities
20-10-11 BUY 75.00 5.70

Interim Management Statement.

Highlights

Average weekly net private reservations up 25.9% in the period due to an increased number of sites and an improved reservation rate per site

Private average selling price ("ASP") in the period increased by c. 7% compared to the prior year equivalent period to c. 207,000 as a result of changes in product mix and new site starts

New site openings from recently acquired higher margin land are expected to drive a significant improvement in profit before tax for the full year

Private forward sales up 27.4% on the prior year at 3,221 plots

Net debt as at 30 June 2012 expected to be at the lower end of our previous guidance at around 400m

Just closed for a chunky +5 on the day.

Questor share tip: All is on track for Barratt
.Garry White, 7:16, Thursday 17 November 2011

Yesterday's trading update from housebuilder Barratt Developments was reassuring, confirming that everything is on track.

Barratt Developments 90.45p +6.35 Questor says BUY

Of course, what the company really needs is for banks to start lending again to first-time buyers. But with this not looking imminent, the company has focused on building properties aimed at people further up the chain who hold more equity. This means it has built more large houses and fewer flats.

This, and the company's strong focus on the South East of the UK is the reason that the average selling price of the company's properties have risen 7pc to 207,000. The average weekly number of reservations for new homes has jumped 25.9pc since the start of the new financial year. This is partly down to the fact that the equivalent period of last year was so bad, due to investors being spooked by the comprehensive spending review in October 2010. Around 17 percentage points of this figure are caused by that bounce, with about 9 percentage points from new site openings.

Barratt has been buying cheaper land throughout the downturn, so the houses built on these new plots are higher margin.

Barratt does have debt unlike other housebuilders which should be about 400m by the end of the year. However, its larger than usual land bank means that sales over the next few years should bring this down significantly, and the balance sheet does not look overstretched.

The investment case remains intact. Cheaper land bought in the downturn is leading to higher profitability without any substantial rise in house prices. The UK remains structurally short of houses as the population continues to rise.

The shares are trading on a June 2012 earnings multiple of 14.3 falling to just 8.7 in 2013. The yield is 0.5pc, rising to 1.9pc.

The shares were named as a tip of the year at 88.65p but have been tipped as high as 188p in May. They are down 24pc from this high.

The shares remain a buy.

I don't think this is going to be a penny share for much longer.

quite a brave call as industry prognostications are that the housing market, especially at the budget end, has further falls ahead

Would like to see 1.40 again then be out i think.,.

Me to - think I would even go at a slight loss - been a long wait.

I don't hold - but all things being equal (whatever that means atm) the share price has been fairly bullish of late - as ever, time will tell!

Not quite - it peaked at 99.3.

Note from Liberum Capital:
"News out of the FT over the weekend and today suggests that the government will shortly announce a MIG scheme for new housing. We await detail but this could be genuinely helpful as it could increase the supply of mortgage funding for new housing, by reducing risks to lenders. The volume players should be the main beneficiaries, and we reiterate our preference for Barratt, trading at 0.46x book v 0.8x for the sector.
Housing strategy to be unveiled today. The FT on Saturday (and today) carried a story that the government will unveil today a strategy to help the housebuilding industry. Three specific measures are mentioned: i) a MIG scheme for the new housebuilding industry; ii) funding for work in progress, and iii) bringing forward government land for housebuilding.
MIG genuinely helpful. Mortgage indemnity guarantee (MIG) schemes have been used in the past and are insurance schemes that pay out in the event of default. By paying 10-20% of the shortfall between the mortgage outstanding and resale value in the event of default, the scheme protects lenders from losses. This means that lenders risks are reduced and so, all else being equal, should be able to lend more to housing. From what has been written so far, it appears that the scheme will be funded by government and new housebuilders, as it will apply to new houses rather than all houses. This could be genuinely helpful as it should increase the supply of mortgages for new home buyers, by lowering the risk of mortgages, and so tying up less of banks capital, and should raise the demand for mortgages by increasing the LTV available to buyers.
Other measures. Bringing forward land could be helpful for industry volumes, but we believe that house building is constrained by mortgage availability rather than land, so this may not lead to greater supply of private housing. However, this land could be developed to provide affordable housing where waiting lists remain long. The other measure that has been hinted at is a repeat of the 2008/09 scheme to fund work in progress to bring forward development. However, current schemes tend to be houses rather than flats, with reduced work in progress requirements, so this may not be as helpful as it was in 2008/09.
Volume housebuilders most to gain. We believe that the volume builders (Barratt, Persimmon and Taylor Wimpey) have most to gain from an increase in mortgage supply and reiterate our preference for Barratt, which is trading at 0.46x Dec11E book value, compared to 0.8x for the sector."

bdev (blue) and tw. (red - pays yer money and takes yer choice

I saw this on the BBC this morning, and I must confess - I thought it would give the builders a bit of a fillip today - hey ho!

Finally got there today - 100.4.