Hard time in business

[nopanic - neil]

Doing some reading about how hard it is in business today, and found this from the the FT web site.

Discussion about Tesco and Asda are both launching price campaigns this weekend, But talk of a summer “price war” has left some retailers bemused

The best quote -

“We’re oblivious to it. It’s all bollocks,” said Malcolm Walker, chief executive of Iceland, the value supermarket chain, which is recording double digit like-for-like sales growth with no promotions.

(Note - FT did not edit the b word)

I like plain talk, no sodding dressing up quotes.

I wonder what other plain talk MD/Chaiman have said in the past (not inlucing Ryan air MD -  you would need pages for him!)

[Lazy B'stard]

Well I'm a company MD and I told a customer to this week to stick his f**k*ng car up his arse and leave it there until he learns to pay his bills!
 Times are hard indeed.
 S

[Leftie]

Well I'm a company MD and I told a customer to this week to stick his f**king car up his arse and leave it there until he learns to pay his bills!
 Times are hard indeed.
 S

Been there, done that and went broke in '95. Still waiting for £100k from some big boys and I'm still not holding my breath.
Neally lost the house but, like youself I'm a stayer.

I wouldn't like to have a small company and employ people through these times again.

[Lord Steve]

Most of my customers are in the roofing business and work for the major housebuilders who are simply not paying them. No excuses - they just aren't paying. One major housebuilder sold just one house in May. That's one house nationwide! Their subcontractors who are my customers are slashing overheads and making people redundant left right and centre. I'm already trying to accommodate requests for extended credit terms whilst trying to keep cash in my company.
This is going to get a lot worse before it get's better believe me.

[pool pugilist]

I work in the scaffolding industry and the companies that rely heavily on "house bashing" (new build housing) are really struggling, for instance I am reliably informed, Persimmon Homes who are one of the really big players sold only 8 units in the whole of the first quarter, hence they suspended all new developments for 6 months!! A good friend of mine heads a business that used to chunk 200k a month in housing is now down to 60k and has had to "slash and burn" basically. Even those with exsisting contracts are being asked (told) to reveiw their rates or their contracts will be cancelled, they (The Principal Contractor) know legally they cant do it but will take the chance or the hit to save their margins...tough times in this sector but lets be honest the completly over inflated property price bubble was gonna burst at some point...me thinks the money has been made whilst the sun shone and now a reality check has succumb. Hold on tight boys its gonna be a hella va ride.

P.S. I was made redundant just this Tuesday due to the fact a national construction company knocked us for approaching 100k,the owners of the company have had to act accordingly, I in no way blame my ex employers, I hope they make it through as they are two great blokes and dont deserve it.

I have had three job offers so far so I am in quite a nice position and will hopefully get through it.

[redstu]

our glorious leader when he was chancellor announced the end of "boom and Bust" , he was talking bollocks then and hes been doing the same ever since.
Its just the same as ever ,make hay while the sun shines and make sure you put enough away for the rainy days.

[Lord Pig-Pen]

Thank f**k I decided to work in the social housing field.
Had a good yarn with my boss on friday and all looks rosy for me as my contract looks to be rolling on till next year. She said just keep my head down and dont make any noise
Several of my local developer "Tycoons" have closed doors on future projects, finishing current sites and that's it..
The Housing association I work for has just bought loads of new build unsolds from some major developers.
They started off saying that it was to hit sales targets but have finally said its because they can't sell em.

Its starting to bite

[BryanC]

On the Le Mans front, I decided to penny pinch this year - took the wife's Fiesta and got 42mpg door to door. The Westie would do half that. I still dined / barbecued and drank like a king in France, and didn't see the shortages or poor quality stuff that I saw when I got back.

But what struck me was that there was an abundance of quality food in Super U - not the tennis ball cauliflowers, over-priced veg etc that the supermarkets over here are trying to flog.

Discussion about Tesco and Asda are both launching price campaigns this weekend, But talk of a summer “price war”

Yes - it is Boll*cks.

I smell a con going on. Just wait until I become World Empourer and I'll sort it out.

Agreed about all the construction industry comments - no plasterboard sold at my mates plant last week, and yesterday, I heard about some guys who welshed on a bill for a big crane and left the owners to whistle for the £30K hire.

Our time will come....

BryanC

[landman]

Well, as a director of one of them there plc Housebuilders I can but confirm that it very tough on the whole industry.

Not quite sure If I have a job on Monday, we'll see.  If not then I'll be knocking on the door of some of those housing associations myself.

Last week our group sold 50 dwellings.  There are buyers out there still.

Trouble is that we lost 52 sales due to collapsed chains, no mortgage offers etc etc etc.

The banks & building societies send out the valuers and the 1st thing they do is knock off 10% of the price when it's a new house.  Kills the deals stone dead, upsets a lot of people and causes redundancies that will have long term & far reaching impact.

We as a company have not forced cuts in suppliers rates, we will look after those who help us as best they can.  We have frozen sites and we are laying off site staff.  But we still pay our bills, unlike certain top 3 and former FTSE100 companies.  One of them owes us over £400,000 and we're suing the barstewards for it.

It has been, and will continue to be a very bumpy ride.

My guess is that there's no change until the new president of the USA is elected & until some of the highly paid tossers in the city have driven at least one plc in to liquidation so that they satisfy the terms of the hedge funds & spreadbets.  Sure they will make a whole pile of cash at our collective expense.

If I am not made redundant on Monday then I expect that I will be making staff redundant.  So next week will be "interesting" to say the least.

Watch this space...

Landman

[redstu]

If a mere 10% reduction in valuation kills the deal , what is (was) the profit margin on a new build house?

[Lord Pig-Pen]

What have you done to Ting tong's arms.... nasty nasty man!

[Robbo SPS]

I was judt trying to find details of a new development in Denmead, Hants. The location is nice, but so far no new building firms have put their boards up....

I cant find ANY firm on the net running any form of information, let alone advertise. My house may go dow in price, but my employer shouldnt go bust, however hard, her prime minister is trying.

I would be a buyer, if they build them there...

[Andy Zarse]

I'm drunk!

[Andy Zarse]

Actually I'm not, I was driving tonight. 

Times is tough especially in the building industry. Our biggest client is a plc plumbers and builders merchant. Shareprice has halved. Plumbing and lightside gear still doing pretty well, but the builders and heavy side is having a really tough time. I'm being briefed there'll be a number of redundancies...

[landman]

If a mere 10% reduction in valuation kills the deal , what is (was) the profit margin on a new build house?

If you take the average house price of £250,000 as a starting point.

Mr valuer comes along and says knock 10% off, so that's £225,000.

Mr & Mrs Buyer want a 70% mortgage, so they were looking for £175,000 to start with.  Now the bank will only give them £157,500.  That's a difference of £17,500.

Next move is that the buyer comes to us and holds their hand out for a £17,500 reduction on a price that has already been reduced.  Given that a typical profit margin is 15% our original £250,000 price tag showed £37,500 of profit, but if we'd already taken £20,000 off to attract the buyer in the 1st place, another £17,500 leaves nil profit.

Hence why there is so much stock around the country and why we cannot shift them due to the valuers.

The instant 10% off scenario is real.  It means that the buyers cannot borrow as much as they need.  If you then reapply for another mortgage and play around with the price so that the value comes out to necessary £170,000 figure then you are committing mortgage fraud.

The question is just how long the banks will continue on this tack, because they are still having to pay interest on savings, but to pay that the banks need to make money on the mortgages.

Landman