Monday, May 24, 2004
Disruption to my broadband connection took me off-line for what felt like an eternity recently. I hope no-one missed me too much.
The portfolio has taken some small backward steps recently, in the face of market sentiment rather than any company specific news. Recent AGM statements from Mayborn and Ben Bailey were very encouraging and should see even higher prices eventually realised than what I was previously expecting.
First up, Mayborn's AGM statement
http://fool.uk-wire.com/cgi-bin/articles/200404231100019372X.html
Directors now believe that the pre-tax profit for the first half of 2004 will be substantially in excess of 2003's £2.9m although, in 2004, the first half is likely to contribute a higher proportion of the annual pre-tax profit than 2003's 42%.
...
The Board remains confident that 2004 will be another year of progress
The company has followed this with further purchases of their own shares for cancellation. These buybacks mean an even larger share of that profit is deemed to be mine and should result in price advances.
The company bought back 50,000 shares at 246.5p on May 11th and followed this recently with a huge purchase of 160,000 shares at 255p. The directors have been investing their own money in company shares, Ranjan Banerji buying 6,500 for himself at 242p on May 18th.
The attentive might have noticed these prices are all significantly below my own purchase of 282p. I have to admit here that I was perhaps rather hasty in my Mayborn purchase. Strictly, the purchase as 282p did not satisfy my 30% margin of safety rule, as I consider the shares to be worth 350p. This reduces my potential gains and increases my chances of suffering a loss on exit. My current Mayborn position is currently underwater but the recent management comments and share purchases have strengthened my conviction that I have a winner here.
Ben Bailey, the 'northern' housebuilder also reported strong trading recently at their AGM on May 7th.
http://fool.uk-wire.com/cgi-bin/articles/200405071200034158Y.html
Strong market conditions have continued to prevail in our area of operations during the first four months of trading in 2004.
Reservations year-to-date are 20% ahead of the corresponding period of 2003. This Sales Reservation level represents nearly 80% of our 2004 budgeted sales and are at selling prices which are in excess of 2003 levels.
These healthy market conditions give the Board confidence that we can deliver another set of good results in 2004.
So, more houses being sold at even higher prices. One has to wonder how long this purple patch can be enjoyed, with interest rates on the rise in the UK and media comment on the market increasingly doom-laden, will people continue to pay higher prices for housing?
With both Mayborn and Ben Bailey it is still 'watch and wait'. Interim results in a few months time should provide more information on which to place an updated price target. For now, however, I'd be taking anything in advance of 350p for Mayborn and 520p for Ben Bailey.
More on my remaining holdings, Chaucer and Dana Petroleum in the next blog.
Good to be back.
The Artful Dodger
(0) comments
The portfolio has taken some small backward steps recently, in the face of market sentiment rather than any company specific news. Recent AGM statements from Mayborn and Ben Bailey were very encouraging and should see even higher prices eventually realised than what I was previously expecting.
First up, Mayborn's AGM statement
http://fool.uk-wire.com/cgi-bin/articles/200404231100019372X.html
Directors now believe that the pre-tax profit for the first half of 2004 will be substantially in excess of 2003's £2.9m although, in 2004, the first half is likely to contribute a higher proportion of the annual pre-tax profit than 2003's 42%.
...
The Board remains confident that 2004 will be another year of progress
The company has followed this with further purchases of their own shares for cancellation. These buybacks mean an even larger share of that profit is deemed to be mine and should result in price advances.
The company bought back 50,000 shares at 246.5p on May 11th and followed this recently with a huge purchase of 160,000 shares at 255p. The directors have been investing their own money in company shares, Ranjan Banerji buying 6,500 for himself at 242p on May 18th.
The attentive might have noticed these prices are all significantly below my own purchase of 282p. I have to admit here that I was perhaps rather hasty in my Mayborn purchase. Strictly, the purchase as 282p did not satisfy my 30% margin of safety rule, as I consider the shares to be worth 350p. This reduces my potential gains and increases my chances of suffering a loss on exit. My current Mayborn position is currently underwater but the recent management comments and share purchases have strengthened my conviction that I have a winner here.
Ben Bailey, the 'northern' housebuilder also reported strong trading recently at their AGM on May 7th.
http://fool.uk-wire.com/cgi-bin/articles/200405071200034158Y.html
Strong market conditions have continued to prevail in our area of operations during the first four months of trading in 2004.
Reservations year-to-date are 20% ahead of the corresponding period of 2003. This Sales Reservation level represents nearly 80% of our 2004 budgeted sales and are at selling prices which are in excess of 2003 levels.
These healthy market conditions give the Board confidence that we can deliver another set of good results in 2004.
So, more houses being sold at even higher prices. One has to wonder how long this purple patch can be enjoyed, with interest rates on the rise in the UK and media comment on the market increasingly doom-laden, will people continue to pay higher prices for housing?
With both Mayborn and Ben Bailey it is still 'watch and wait'. Interim results in a few months time should provide more information on which to place an updated price target. For now, however, I'd be taking anything in advance of 350p for Mayborn and 520p for Ben Bailey.
More on my remaining holdings, Chaucer and Dana Petroleum in the next blog.
Good to be back.
The Artful Dodger
