Carl Turpin, chief executive of Oakdene Homes, has denied that the company was forced into a £9.75m share placement by the state of the market, writes Tom Bill.
The south of England housebuilder announced the move after posting poor results for the year ended 31 December 2007. It will put up to 20 million new shares onto the market at 50p each.
Turpin said: “The decision was taken as a matter of prudence and the extra money will make us very comfortable. We wanted to make sure we were at the front of the queue in terms of going to the market for cash.”
The City acted with scepticism, and one analyst pointed to the fact that £9.75m was almost double last year’s pre-tax profit. He said: “Looking at the state of the market this smacks somewhat of a rescue package.”
In 2007, pre-tax profit at Oakdene fell by 33% from £8.2m to £5.5m as the company sold 140 homes. This was 26% down from the 190 it sold in the previous year. Turnover slumped 21% from £46m to £36m.
Turpin also accused the media of exaggerating the impact of the credit crunch. He said: “The press doesn’t differentiate between the north and the south of the country. In the north it’s mayhem but in the south, demand exceeds supply.”
Not everyone was convinced. One analyst said: “I’ve never read a financial statement so ungrounded in reality. Everything is not all right in the south, as the company suggests.”
Turpin: Looking on the bright side
“We feel very positive. We have a very good landbank, which was bought at the right time for the right price.”
“Visitor levels have not been bad and we’re not cutting prices. There’s no panic at all in our camp.”
“We are past the eye of the storm. We’ve had nine months of bad news and will probably have another nine months. After that there will be a lot of pent-up demand.”