The Promised Land
Red Dwarf, the very British sci-fi comedy franchise, ran for 11 seasons – most recently in 2017; and The Promised Land is a feature-length TV movie – out this year. Yes, the programme is an acquired taste. Strangely, too, many episodes are impacted by a virus or three (physiological, not main-frame).
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07 Apr 20
UK Housebuilding Sector: 2020 vision: Sharpness and clarity for industry prospects
For fighter pilots, it is a minimum requirement. But having 20/20 ‘visual acuity’ (correct term) does not necessarily mean you have perfect vision (as convention assumes); instead, it indicates sharpness and clarity of vision at a distance. It is measured by a Snellen Chart, which displays letters of progressively smaller size and whereby 20/20 means that the test subject sees the same line of letters at 20 feet that a person with normal vision sees at 20 feet (or 6 metres; but 6/6 simply didn’t catch on).
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08 Jan 20
Cenkos: Building & Construction
Due to a change in Analyst role, Cenkos Securities plc has suspended coverage of the following stocks (see table 1). Our previous recommendation and forecasts can no longer be relied upon.
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31 Jul 19
UK Housebuilding Sector in 2Q 2019
Dwight Barkley PhD is a Professor of Mathematics at the University of Warwick. He studies waves in excitable media such as the Belousov-Zhabotinsky reaction, heart tissue and neurons. In 1997, Dr Barkley and Dr Laurette Tuckerman, a Paris-based mathematical physicist, developed ‘bifurcation analysis for time steppers’, which is a technique for modifying computer codes to perform bifurcation analysis. More lyrical, perhaps, Dwight is also known for formulating an equation to estimate how long it will be until a child in a car asks the question “are we there yet?” And, it is shown on the image on page 3 of this report. Herein, there are three factors which decide the timing of this wearisome question i.e. one plus the number of activities, divided by the number of children in the car squared. That figure is then added to the time it took the family to get into the car and set off on its journey. Crucial in putting off the first query as to the proximity of the destination are onboard activities for children i.e. no activities equals a question before leaving the driveway. Dr Barkley says: “Mathematics can help answer many of life’s questions”. If only the Brexit journey were that simple. It is not. We are all children now stuck in the back seat; and, maybe, we are still on the driveway with a dearth of on-board activities. Yes, three years on Brexit-resolution-fatigue is making itself felt across the board, including the UK Housebuilding Sector, where the fall in value in 2Q’19 was 7%. Berkeley said something similarin its final results, on 20 June, when it lamented an uncertain operating environment and “a lack of visibility in the political outlook”; and its PBT is expected to fall by a further third this fiscal year. The daily Sector value chart is also lurching from top-left to bottom-right (as is the British Pound versus the Euro). Yes, there were two palpable positives in 2Q from the NHBC and UK Finance about building activity and mortgages; plus, on the third day of 3Q, CBRE’s bid for Telford Homes. Nonetheless, prospective earnings growth for the Sector is now flat in both 2019 and 2020. This is about the journey.
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05 Jul 19
Getting there, but slowly
While we like where Crest Nicholson looks to be heading (towards a broader tenure base) this is still something of a wait-and-see. The new CEO still does not arrive for three months and while we feel Peter Truscott will continue, if not accelerate, the current strategic shift, we still do not know the size, shape or flavour of the new Crest. If the destination is as hoped, we believe that fair value could be reset at c.450p and the recommendation moved to positive. The brave may want to take a leap of faith now, but we prefer to wait. That said, we already view Crest in a more favourable light than the sector’s large caps. HOLD.
18 Jun 19
UK Housebuilding Sector in 1Q 2019
Y2K is a numeronym and was the common abbreviation for the year 2000 software problem; and, for the benefit of millennial readers, the abbreviation combines the letter ‘Y’ for year and ‘K’ for the SI unit prefix kilo, meaning 1000. Hence, 2K signifies 2000.
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09 Apr 19
Cenkos: Budget 2018 - Sprinkling the gold dust?
To be honest whilst there was more in this Budget as far as the sector is concerned than has recently been the case, I believe investors will barely blink. On a bigger picture macro view I guess the decision investors have to make is whether it likes a new era of increased government spending (£30bn irrespective of Brexit), personal tax cuts and real wage growth at the expense of slower OBR forecast GDP growth and increased government borrowing ratios. However, at a more micro sector level:
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31 Oct 18
UK Housebuilding Sector in 2Q 2018
This VAR was conceived in 2010 by the Royal Netherlands Football Association (KNVB) but it was seven years later, in April 2017, that it had its professional club competition debut in the A-League in Australia in a match between Melbourne and Adelaide.
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04 Jul 18
UK Housebuilding Sector
This ominous-sounding term originated from the work of famed Swedish meteorologist, Tor Bergeron (1897-1977), but it only entered popular vernacular this year – and there have been ample opportunities in 2018 to use it.
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09 Apr 18
UK Housebuilding Sector: Q1 2017
Baron King of Lothbury, also known as Mervyn King former Governor of the Bank of England, is married to Barbara, a Finnish lady. She was his girlfriend in 1970 but distance and steam-driven telecoms conspired to keep them apart. Barbara went on to marry someone else and divorce - before being reunited with King in the late 1990s. They married in 2007 and King, who had never had children, was presented with two step-children and four grandchildren; and, in a Sunday Times interview, he quoted the Finnish apothegm “Grandchildren are the dessert of life”.
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10 Apr 17
Housing White Paper: ‘Up not Out’ and ‘Rent not Buy’
Initially the market is likely to be pleased with the White Paper (WP) in so far as the sector is concerned; there is no revolution taking place which is radically moving from demand-led to supply-led policy (for owner-occupation) nor policies which appear to be aimed directly at industry competitiveness. However, I do not see that being a sustained view and I remain of the opinion that the current (PD) housing cycle will start to roll over in 2019 driven either by rising interest rates or further political shift, hence the market may start to reflect that in 2018. For now I remain neutral/mildly positive on the Housebuilders but would be contemplating pre-cautionary reductions in sector exposure beyond this year or into meaningful bouts of strength.
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08 Feb 17
‘Billions’ - UK Housebuilding Sector - Q2: Summer 2016
The pilot episode of the much-hyped new TV series ‘Billions’ raked up almost three million viewers on debut in January of this year, which was a new record for Showtime. It is a sort of ‘Wall Street’ for a post Global Financial Crisis (GFC) audience. Damian Lewis heads the cast together with Paul Giamatti - and, the often parsimonious, IMDb has awarded the programme a premium 8.4 score. Lewis’s character Bobby Axelrod is an ambitious hedge fund manager and the sole survivor of the part-eponymous, Axe Capital, during the 9/11 attacks. Bobby is clever, charismatic and charitable (but not whiter than white). He is also very rich, lives in a nice house and knows what ‘billions’ is/are - and has a few himself; albeit these billions tend to slip in and out of his grasp, as is their wont. The UK Housebuilding Sector is also ambitious and survived the collapse of Lehman Brothers and the ensuing Global Financial Crisis. Similarly, it is smarter and wealthier than it has ever been; and, yes, charitable but not atramentous. It is also in award- winning form, which is a good job as it acts out another palpable crisis - the Brexit vote - and a £9 billion loss of value in six trading days. But do not despair.
12 Jul 16
UK Housebuilding in 2015; and a look to the future - The Fantastic Four
The Fantastic Four is Marvel’s original and longest running superhero team who, through a cosmic incident, develop super powers; and then use them for good. Reed Richards (Q1) is able to stretch like rubber, while Johnny Storm (Q2) can produce fire at supernova temperatures and is able to fly. Meantime, Sue Storm (Q3 and sister of Johnny) can turn invisible and create force fields, especially when angered; and, finally, Ben Grimm (Q4 or ‘The Thing’) becomes a large, rock-like creature with immense strength. In 2015, the UK Housebuilding Sector embraced the legend and its own extraordinary powers - and was able to fight off the common arch enemy Dr Doom.
14 Jan 16