The company, which operates in south, south-east and north-west England, is boosting its bank balance by placing 拢10.1m of new shares and selling 拢10m of loan stock to the Bank of Scotland.
Chief executive Philip Davies said some of the money would be used to start an operation in the Bristol or Gloucester area. He said: 鈥淭here are opportunities that we can exploit. Crest and [Berkeley subsidiary] Beaufort have a presence there and they are our competitors in our other areas. Why not be there too?鈥� Davies said the company would look for an average selling price of 拢140 000-150 000 on homes in the region and that it would use managers from its Southampton operation to kick-start the business.
The extra capital would also allow Linden to maximise returns from brownfield development, said Davies. In the six months to 30 June, Linden built 90% of its homes on brownfield land.
An analyst from stockbroker Sutherlands said: 鈥淟inden has a good niche in the brownfield market but it is fair to say people are still a bit sceptical about the sector.鈥�
The company plans to raise 拢10.1m through a placing and open offer; issuing new shares for 230p, 20p less than its closing price on 29 July. It will take out a 10-year loan for a further 拢10m. Under the terms, the Bank of Scotland has bought loan stock that can be converted into ordinary shares worth 330p after 10 years if it so wishes.
Linden鈥檚 pre-tax profit rose 14% to 拢4.39m in the six months to 30 June on turnover up 31% to 拢43.2m. National average selling price for the six months to 30 June was 拢152 000, down from 拢163 000 last year. But 277 ouses were sold compared with 198 in the first six months of 1998, indicating that more smaller houses are being built.
Davies said the market was now 鈥渞elatively stable鈥� after a tough final quarter of 1998: 鈥淭his has been driven by lower interest rates and the fact housebuilders aren鈥檛 building many houses. There are bits of euphoria but it is mostly steady growth.鈥�
- Linden is to appoint a new finance director because Lou Jovic, who has been with the group since its launch in 1991, wants a more operational role. 鈥淲e are trying to get someone from inside the organisation with more City experience,鈥� said Davies.
