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Company spotlight: Oakdene

FINANCE

WITH major house builders hungry for land, there are fewer and fewer medium-sized house builders left anywhere ? let alone on the stock market.

That is one reason that Surrey-based Oakdene Homes is worth a look. Serial investor and Saracens rugby club owner Nigel Wray certainly thinks so, having lifted his stake in the firm to 17 per cent.

Being a small business Oakdene is vulnerable to a shift in completion dates, and the fall in pre-tax profits in the first half of this year to £795,276 from £998,070 was a disappointment for shareholders.

But focusing on relatively cheaper units below £250,000 should still prove profitable in the long run.

Chief executive Carl Turpin has also used the listing to make acquisitions, such as snapping up AIM-listed Honeygrove, but the purchase of an 8.8 ha site in Newhaven could provide many benefits over time.

The land, bought from shipping outfit Sea Containers, cost £11.3 million but is expected to have a gross development value of £150 million.

Oakdene will not build on all of that site as most house builders trade land ? even if they do not all make the benefit of those sales clear in their results.

A price to earnings ratio of 5.5 looks miserly for the shares, which are not helped by a lack of quoted peers.

Unlike east London-based Telford, Oakdene's management is a stage closer to retirement and hanging in there in case the firm becomes a takeover target is another reason the stock is attractive.