Oakdene Homes Share Discussion Threads

[edmondj] 03/11/2005 17:45

The share price would not crash if the company set a minimum tender price and invited all owners to participate - with the directors stating what they were prepared to buy at a minimum tender price.

The risk with this approach would be in not assessing the level of demand at the tender price in a situation when a company wanted to be sure of raising a set amount of capital in a specific time.

But the arrangement you describe strikes me as simply the way the City club works, which is in the interests of brokers not owners. share price did not return my call which is not surprising, brokers are generally motivated to make money out of companies for themselves and their clients, with little respect for the company's existing owners.

Like any worthwhile investment situation, placings are kept 'hush hush' in the interests of those in the loop.

[currypasty] 03/11/2005 15:13

I think youve answered your own question there... if these placings were common knowledge, the shareprice would crash, as PI's sold to buy back cheaper, which would mean the placing price would have to be cheaper, and so a spiral down.

Placings are usually hush hush to get them away at a decent price, so protecting the share price as far as possible. In my case, i had to agree to buy, and send the cheque, before even knowing the offer price. SYP clients 'in the know' would also be classed as having inside info, and so should not trade before the rns came out.


Ive been 'shafted' many times with this sort of thing, the worst being Tepnel, which were about 10/12p, before a placing at 5.75, to new american investors, plus directors who took a large chunk of the placing, but still havent yet paid for them.

At least in OKD case, the price is reasonable compared to the years average. You could say that the peak of 170 was possibly all part of getting the placing away, ie without the placing, the price may now be only 150. Who knows, not PI's thats for sure!

[edmondj] 03/11/2005 12:48

Another aspect of sounding out investors ahead of a placing is that some are liable to sell shares in the market and buy back cheaper c/o the broker's placing list. Recently I've had various OKD holders ringing me up wondering why was the share price drifting - now it is clear to see. It amounts to an additional factor 'why bother following smaller companies?' besides their operational risk and illiquidity.

[spaceparallax] 03/11/2005 12:26

Am surprised to see so much buying right now:

a) If the equity is being raised at 130p per share, why should be pay an 8% premuim?
b) The dividend has just been declared and generally this tends to have a diluting effect upon the share price

I can see the share price remaining in this range for a while, perhaps even dipping close to 130p, albeit temporarily, as a few disgruntled investors decide to profit take for now.

Having said all that, amongst housebuilders, OKD remains my favourite mainly because of the particular niche in which they operate and the slight P/E advantage that they currently offer.

[edmondj] 03/11/2005 11:47

I don't see why private owners should need to 'beat the system', the system is now modern and electronic - so companies could set or even tender a price for equity, there is no need to cut existing owners out like this.

Simply joining a broker's client list only 'resolves' the issue in relation to the company in question, until another one behaves the same!

Furthermore, in line with good corporate governance practice, a chairman should be taking initiative to resolve some of these issues instead of passing the buck to the broker. A chairman is the axis of accountability to owners, or should be.

[currypasty] 03/11/2005 10:34

edmond... the other way to look at it would be to be a SYP 'client' ... if you cant beat the system, which PI's usually dont have a chance, join them

[edmondj] 03/11/2005 10:25

One is aware of the risk, the trouble is that unless one pinballs those perpetrating it then the situation only gets worse!

Not that I should broadcast the content of calls, but I put one in to Seymour Pierce earlier who have yet to reply and justify their actions - to an existing owner.

Numis has published a 200p a share target this morning.

[jeffsmith] 03/11/2005 09:53

I, too, tend to get a little disillusioned. With the shares having recently reached £1.70 and the present price at £1.40, why gift these investors an instant 8% return by selling at £1.30 when the prospects seem so good?
JS

[edmondj] 03/11/2005 08:36

The way I am feeling, I have been pinched of a five figure intrinsic value sum on my holding - transferred to clients of Seymour Pierce - when the outlook for smaller housebuilders is already risky. This kind of additional holding risk on smaller companies increases the discount rate applying to their cash flows and argues for a lower rating. Or more simply, why bother taking the risk if one is going to be robbed of existing value like this? That's why pre-emption rights were invented but the likes of Seymour Pierce advise companies to abandon PER - as we see, so they can put their own clients in exclusively.

[currypasty] 03/11/2005 08:24

if you a long term holder, you must be well in profit, and pleased with how the Company have performed, and been managed. If this cash is used to the same effect as the IPO cash, surely this is a good thing for a 1-2 year view.

the institutions were obviously keen, and liked the story, or the offer price would have been alot lower. Dilution is always a touchy area, and im sure the founder holders thought the same when the IPO dilution came along, but are now pleased it happened.

[edmondj] 03/11/2005 08:12

The story from me to SYP will not be good, I assure you!

[currypasty] 03/11/2005 08:10

The story from SYP was good, ive gone for some

[edmondj] 03/11/2005 07:34

The £7m placing at 130p a share looks implicitly positive in the sense that the directors would have had to justify this to new investors among Seymour Pierce's clients and the directors are investing materially.

But it is materially dilutive to existing owners - by more than 17% - the use of 'enlarged' share capital in the announcement is not a true representation. As a substantial long-term investor in OKD my feeling is that companies and their advisers should respect who are their financial supporters.

Gnash!

[spaceparallax] 01/11/2005 12:13

Morning chaps, interesting share price movements recently. I was tempted to top-up yesterday and regretted not doing so when the share price rose later in the day. This morning's fall was a bit of a surprise and confronts me with a dilemma: price seems fair now (IMHO) in relation to the potential additional risk, but I am a little edgy about grasping the 'falling knife' - think I'll wait a few more days to see whether gravity prevails.

CP, I agree about the further borrowing, but might that incur a further dilution of share price i.e. one way or another debt is debt. However, on my theme of market concerns, it was interesting to hear yesterday's news on mortgage volumes being the highest for 15years?
Also CP, am watching the BEM site with interest - note that someone's taken 50K this a.m.

[currypasty] 31/10/2005 13:36

space... some of your concerns would be dealt with by obtaining more cash from the market.

[edmondj] 18/10/2005 22:48

Fair points, spaceparallax. OKD's tardy interim reporting, late on a Friday with the 90-day period up, prompted some concern with me as to what this overall impression about financial control implies for a small company assuming ambitious debts.

Still, house prices seem to be defying expectations with a current modest rise, I am disinclined to jump to conclusions. I similarly intend taking no action in the shares but can't take my cue from the share price in a thin Aim market. Hopefully the same applies to ENK which like you I also hold!

[spaceparallax] 11/10/2005 16:12

I've spent some time thinking about the recent land acquisition and in particular its timing and payback period. Whilst on the face of it it seemed a rather good, bold move by OKD, indeed their most significant so far, I'm beginning to feel that it might be not quite so well timed i.e. the substantial additional debt and associated development costs are being taken on at a time when the market is far from certain. I feel reasonably confident that OKD are likely to be affected by the inevitable downturn than many other developers; however, it is probable that they will be squeezed by a significant reduction in margin. The coincident timing of the increased debt burden and reduction in margins might be difficult to reconcile despite a likely increase in turnover.

I'll continue to hold but am unlikely to top up further. I will watch with interest to gauge the market reaction and am particularly interested to see the level at which the share peaks i.e. if not breaking the previous high before the month end, I can envisage a retracement to the early 140s.

[ratters] 07/10/2005 14:22

YdderF

Sorry - you've completely lost me now.
The rns you quoted was in respect to shares in which company?
What is the point you are trying to make please?

[ydderf] 07/10/2005 14:15

Ratters:

" Name of registered shareholders(s) and, if more than one, the number of
shares held by each of them
Brian Michael Johnson

8 State the nature of the transaction
Sale

9. Number of shares, debentures or financial instruments relating to shares
acquired
-

10. Percentage of issued class acquired (treasury shares of that class should
not be taken into account when calculating percentage)
N/A

11. Number of shares, debentures or financial instruments relating to shares
disposed
8,232

12. Percentage of issued class disposed (treasury shares of that class should
not be taken into account when calculating percentage)
0.00%

13. Price per share or value of transaction
£6.215

14. Date and place of transaction
4 October 2005; UK.

15. Total holding following notification and total percentage holding following
notification (any treasury shares should not be taken into account when
calculating percentage)
36,229
0.00%"

I wonder why he sold? lololol

[edmondj] 07/10/2005 13:52

Oh dear, the shorters are under pressure, a desperate bid to re-assert fear is on!

lol

[ratters] 07/10/2005 13:08

ydderF

You referred to directors dealings in Bovis. Have not heard of this
before (have only recently become interested in OKD) and wonder if
you could enlighten me.

[spaceparallax] 07/10/2005 12:51

True ydd, we mustn't lose sight of that. I suppose a lot depends on the class of accommodation that OKD plan for the area - and the rate of development and sales required to get the borrowing well under control.

[ydderf] 07/10/2005 12:12

....all funded by bank borrowings which presumably won't be repaid until 2012....the jam tomorrow will go to the banks - if there is any - does anyone seriously believe the housing market will not suffer a crisis sometime in the next five years? if so heavily geared small cap builders will be slaughtered and btw, what are the directors dealings in bovis indicating?

[spaceparallax] 07/10/2005 10:49

Acquisition seems to be well received and comes at a good time after the concerns over the results and their timing. Nice to see the 150 level breached again.