Monday, 30 June 2008

BUILDERS & DEVELOPERS IN TROUBLE

Times are getting hard and in the next fortnight 4 of the UK's biggest homebuilders /developers will announce half-year trading updates and the news will not be good.

Taylor Wimpey is in talks with its largest institutional shareholders for a £500 million bale-out as we hit the lowest levels of house sales since the 1970s. Barratt is £1.8 billion in debt and is in discussion with its lenders and Persimmon and Redrow are also set to make announcements.

If you thought that Commercial Group Properties (CGP) had a problem with a fall in share value from 350p to 115p then compare this with Wimpey falling from 350p to 62p and Barratt's drop from £10 in June 2007 to 65p this month. One begins to wonder if anyone will be in a position to build homes at Westwood Cross or cover our country-side and aquifer in warehouses.


The Bank for International Settlements (BIS) is predicting that the world economy is heading for a deeper crisis than was expected and some of the world's biggest economies may move into deflation. On China, last year it described the Chinese economy as 'unstable, unbalanced, unco-ordinated and unstable'. It has not said the same this year but has said that the effect of a US slowdown ( 20% of Chinese exports go to the USA) could cause a sharp fall of Chinese imports to the US and problems for Chinese exporters. One must assume with an 11%/15% fall in the value of the £ that Chinese imports to the UK will not only be more expensive but will also slow down as we all concentrate on petrol, gas, electricity and food price rises.


I am not a developer or businessman but it seems to me that Chinamex may well be wondering if it can really afford huge expensive 'Gateways' all around the world at the moment. This would not be good for CGP. I should imagine also that CGP is holding its breath and keeping its fingers crossed that its debt will not cause it problems and that its share price will hold as others tumble around it. If we are finding cash-flow a pinch at the moment, you can bet that others are too.


31 comments:

Matt B said...

Shares are not my strongest point but given the context the CGP seems strong relative to the others. I wonder what time will show to be the facts of the mater?

Anonymous said...

Gordon blown needs to lower to tax on fuel... he has that power

Tony Beachcomber said...

I often think that the importation of cheap Chinese goods has played a major part in keeping inflation down in our own economy in the past decade.
Also China trades in dollars and does not trade the yuan. In fact I beleive China actually loans Dollars back to the USA to fund the budget defecit which helps the US economy.
There is saying that when America sneezes we all get a cold perhaps the same could be said for China if start depending on China.

Anonymous said...

Is Tony Ovenden a builder?

Anonymous said...

Only a builder of false rumours

Bertie Biggles said...

Like to elaborate on that 20.47?

Tony Beachcomber said...

No I am not a builder, but I do a lot of research and have access to a lot of information.
Annons 20:10 & 20:47 for your information Chinese goods and inflation was part of a finacial times report on inflation some time back. As for China loaning US dollars to the US, this was a story line in October 2007 when a american senator raised the question.
In the financial papers the China question is a constant topic of debate and there are strong answers for and against.

Anonymous said...

Anyway has tdc done the necessary due dilligence on any company that has put forward major development plans before granting planning permission, from the Ramsgate seafront to Gcp, the old hospital Margete etc? This should be done before any major planning is granted, and if the company is not finacialy secured, security/bond should be required.

Tony Beachcomber said...

Annon 20:47 something for you to think about, during the 1970's & 1980's Rovex/Hornby Hobbies like the rest of the Westwood industrial estate was a hub of local industry. Whenever there was shift changeover at Hornby Hobbies the traffic was almost at a gridlock for people leaving the industrial estate due to the sheer volume of workers coming and going by buses etc.
Then the parts were made in China and the import export game begun, The jobs soon went and the workers disappeared. I do not know the workings of Hornby Hobbies and do not pretend to. But Hornby Hobbies based at Westwood is a very sucessful company and is making more money than ever. What really puzzles me is where are the workers ?

Anonymous said...

When you refer to the Council lookin at due dilligence, is that the due dilligence found in brown envelopes?

Anonymous said...

Hiya Tony

Mixed blessings for local manufacturer Cummins though ?

Anonymous said...

Tony

If you take the link from the post and scroll down to the chapter "Harmonics" and just consider a little ole bit about third harmonics and increased torques.

Now GEZOO's analysis that was ??

Anonymous said...

Just read Rick's profile on Thanet Tatters! He really is a nut job!

Elizabeth said...

I'm new around here but the number of times I've seen/heard mention of a brown envelope culture at the council is astonishing. However, no-one seems to be able to cite any credible references to this type of thing going on with the current line-up. Is there any evidence that it still goes on now or are the current administration being tarred with the same brush as the previous lot?

Bertie Biggles said...

Elizabeth, there is no evidence of such impropriety thank goodness but there will always be those who will harbour such suspicions. Thanet is, in many ways, a small village where gossip abounds and 'urban legends' spread. I suspect that the lack of genuine consultation and involvement of the 'people' in Thanet is behind much rumour and gossip. Many see the present leadership of TDC as autocratic and distant and hence the disenchantment that breeds rumours.

Anonymous said...

I not only harbour suspicions - mine have set sail right out into deep water! It is the only credible explanation for some decisions made.

Tony Beachcomber said...

Following on from my 22:03 post, there was once a plan to build a road from where the westwood industrial eastate road joins the Ramsgate Road. This road was proposed to join up with the Dane Court Road, either side of this Road, new industrial units and wharehouses were to be built to accomodate the expanding Westwood Industrial Estate. It was turned down on environmental grounds due to the loss of high quality farmland and protecting the green belt. Plus at the time there was considered enough industrial sites vacant to meet any future demand.

sue said...

http://edition.pagesuite-professional.co.uk/Launch.aspx?referral=other&refresh=5a0MoA219g1S&PBID=84956776-5fe0-4064-a733-83aabf1dd4b7&skip=

Bertie Biggles said...

Thanks for putting that link in Sue. 'Your Thanet' have given some serious cover to the issue of Gateway today and its nice to become a 'Your Thanet Blogger'!

Anonymous said...

Yes congratulations Bertie, you're famous!

Anonymous said...

We need to do the best for Thanet, but Bertie just wants to be famous?

Whatever floats yours boat

Anonymous said...

leave bertie alone, he might be too shy to put his real name to anything, but let him have his 5 minutes of fame.

Anonymous said...

At least Bertie is a blogger!

Their usual talking head, Dr Cllr Moors gave up public blogging months ago! But he has still got to get his face and opinions in the press even though his Thanetlife is Thanetdead and buried!

Thanetlife is Dead; Long Live Thanetstrife!!

Bertie Biggles said...

Thankyou for that 23.26. I suspect that other's miss the irony in my earlier comment.

sue said...

Yes well done bertie. There is hope for us yet.

Anonymous said...

Dr Moores, believes in things strongly enough that he does not hide behind a childish blog nick name. When will Bertie have the bottle to let us know who he really is?

Anonymous said...

Who are you?

Bertie Biggles said...

Bertie Biggles at the moment, I'm afraid.

Anonymous said...

many true words are said in jest

Anonymous said...

Why are you so desperate to know who Bertie is - the whole point of a blog is the discussion, the characters are immaterial not everyone can be bought off or threatened if that is what the blogger is intimating.

Anonymous said...

i wanted to add to Tony Beachcombers comment re vacant ind land as far as i know there is still a surplus so that makes CGPs plans even more ridiculous, TDC been using the argument re too much land to others wanting to build more ind. units - one rule for one and another for the others! Thanet Strife ok!