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Oakdene not so mighty
- Created:
- 13 May 2008
- Written by:
- Claer Barrett
Housebuilder Oakdene has announced plans to raise £9.75m from a placing of 20m shares, despite revealing a disappointing set of preliminary results for the year to 31 December 2007.
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Oakdene's shares have suffered with the rest of the housebuilding sector, falling nearly 74 per cent in the last 12 months. In January, following the collapse of two significant deals, the group cut profit expectations from £10.9m to £5.1m.
Although the results slightly exceeded this estimate, turnover is down. The sales target for 2008 is 200 units at an average selling price of £260,000, of which management says 'around 50' have been sold.
Oakdene Homes |
||||
|---|---|---|---|---|
| ORD PRICE: | 55p | MARKET VALUE: | £23m | |
| TOUCH: | 53-57p | 12-MONTH HIGH: | 215p | LOW: 44.5p |
| DIVIDEND YIELD: | 7.3% | PE RATIO: | 5 | |
| NET ASSET VALUE: | 130p* | NET DEBT: | 140% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2003 | 12.0 | 3.00 | 17.0 | nil |
| 2004 | 21.4 | 6.30 | 36.4 | 2.50 |
| 2005 | 42.6 | 5.12 | 17.3 | 3.00 |
| 2006 | 46.0 | 8.18 | 17.5 | 4.00 |
| 2007 | 36.2 | 5.48 | 11.5 | 4.00 |
| % change | -21 | -33 | -34 | - |
*Includes intangible assets of £18.6m, or 44p a share Ex-div:14 May Payment:12 Jun |
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Click here for a guide to the terms used in IC results tables.
Shareholders will vote on the new placing of 20m shares at 50p-a-share at the company's annual meeting on 4 June. Chief executive Carl Turpin said the proceeds would be used to acquire land at 'reasonable prices' and also potentially take out some smaller private housebuilders. "We've done this before, and believe there will be opportunities to be had," he said.
Forecasts are not available ahead of the fund raising. In a statement, the directors estimate that the value of Oakdene's 1,800-plot landbank is £109m, as opposed to the £85.5m shown on a historical cost basis in its accounts. With planning permission for all plots, they estimate it is worth £169m - equivalent to a net asset value of 323p a share.
IC VIEW
FairlyPriced
Oakdene's concentration on the south of England means it is spared the dramatic oversupply of the Midlands and northern cities. If the placing is successful, its balance sheet will be improved, but given the high level of gearing, the shares are fairly priced.
Last IC View: Good value, 73p, 30 Jan 2008
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