South east housebuilder Oakdene sees pre-tax profit fall 33% to £5.5m after "difficult market situation"

South of England housebuilder Oakdene plans to raise £9.75m through a rights issue after announcing poor results for the year ended 31 December 2007.

Pre-tax profit at Oakdene fell by 33% from £8.2m to £5.5m after what chairman Philip Stephens called “the difficult financial situation that affected the UK market during the second half of the year.”

Turnover slumped 21% from £46m to £36m and the company sold 140 homes in 2007 compared to 190 in the previous year.

The rights issue will see the placing of up to 20 million new shares at 50p each to provide “working capital for the growth of the business and flexibility to take advantage of any future potential acquisition opportunities.”

Despite reports of heavy falls in reservation levels in March and April, Stephens denied the market was in decline.

He said: “Over the last few months press headlines have given the somewhat misleading impression that the UK housing market is in general decline and set to fall further. While this may be true in some parts of the UK, it is a somewhat different case in the south east.”

He said once the credit crunch abated, pent-up demand in the system would “take up any slack in the market.

Bank of Scotland has increased its rolling debt facility by £10m to £55m.