Carl Turpin, chief executive of Oakdene Homes, has denied that the company was forced into a 拢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: 鈥淭he 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.鈥�

The City acted with scepticism, and one analyst pointed to the fact that 拢9.75m was almost double last year鈥檚 pre-tax profit. He said: 鈥淟ooking at the state of the market this smacks somewhat of a rescue package.鈥�

In 2007, pre-tax profit at Oakdene fell by 33% from 拢8.2m to 拢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 拢46m to 拢36m.

Turpin also accused the media of exaggerating the impact of the credit crunch. He said: 鈥淭he press doesn鈥檛 differentiate between the north and the south of the country. In the north it鈥檚 mayhem but in the south, demand exceeds supply.鈥�

Not everyone was convinced. One analyst said: 鈥淚鈥檝e never read a financial statement so ungrounded in reality. Everything is not all right in the south, as the company suggests.鈥�

Turpin: Looking on the bright side

鈥淲e feel very positive. We have a very good landbank, which was bought at the right time for the right price.鈥�

鈥淰isitor levels have not been bad and we鈥檙e not cutting prices. There鈥檚 no panic at all in our camp.鈥�

鈥淲e are past the eye of the storm. We鈥檝e had nine months of bad news and will probably have another nine months. After that there will be a lot of pent-up demand.鈥�

Postscript

www.building.co.uk/housing

Topics