Oakdene Homes reports £5m profit

Oakdene Homes, the south England housebuilder and property developer, made a pre-tax profit of £5m last year on turnover of £36m.

Oakdene’s latest figures cover the 12 months to 31 December 2007.

In the previous year, a larger turnover was achieved, running to £46m, and the pre-tax profit was correspondingly higher at £8m.

Carl Turpin, chief executive, said: “Over the last few months, press headlines have given the somewhat misleading impression that the UK housing market is in general decline and is set to fall further.

“While this may be true in parts of the UK, it is a different case in the South East.

“Parallels are drawn with the housing markets in the UK in the early 1990’s and the current market in the US. However, neither parallel is valid for Oakdene’s South East market which has seen only a small reduction in selling price.

“The early 1990’s suffered from high unemployment and high interest rates, neither of which are true today. housing in the South East continues to fall short of requirement, exacerbated by ever-increasing delays in the planning system.”

Oakdene said that for a fledgling company, the rise in its net asset value is of “at least equal or even greater importance” than pre-tax profit.

Oakdene reports that, based on current open market value of it sites, its net asset value has jumped higher by one third to a figure of £1.80 a share.

Despite that, Oakdene’s share fell this morning, from 58p to 55p within the space of a couple of hours of trading.

One influence was the news that Oakdene had issued 20m new shares priced at 50p each.

Oakdene has completed the first phase of its development at Newhaven on the south coast. Still to come are:

• 300 residential apartments on the West Quay
• 200 apartments on the Railway Quay

Oakdene said that as a consequence of the slowdown in sales, its cash flow has taken a squeeze “particularly when we are at the early stages of construction on more sites than ever before”.

The Royal Bank of Scotland has attended to this situation by lifting Oakdene’s revolving facility by £10m to £55m, secured on the increased value of the group’s development sites.