Oakdene Homes Share Discussion Threads

[westcoastrich] 08/10/2008 23:49

Dispute with ITV Meridian regarding planning application

Oakdene Homes plc ("Oakdene"), the housebuilder, announces that a writ has been received
from ITV Meridian seeking an order of specific
performance of the planning application for the former TV studios at Southampton. In the
opinion of the directors and their legal advisers
the action is without merit.

Under the terms of the contract for the purchase of the site by Oakdene from ITV, ITV is
due an additional payment depending on the
number of units for which planning permission is granted, up to a maximum payment of £2.5m.
ITV is claiming that Oakdene has deliberately
delayed their planning application in order to delay the payment of this additional sum. In
fact Oakdene is looking to obtain planning at
the earliest opportunity and has been working with internal and external planning advisors to
obtain the best planning permission on the
site. Unfortunately, Oakdene has been delayed in submitting an application by a requirement of
the Local Authority for various environmental
reports including a migrating Bird study, Riverside ecological study flood assessment risk and
a number of other site specific reports.
These reports require studies which can take up to a year to complete and further require
detailed discussions with the city council and
Planning Officers before a planning application can be made. An application of this size is a
major application and cannot be made without the agreement of the local authority. All the
studies are now
complete and Oakdene expects to make a formal planning application within the next 3 months.



Do they have any money to pay??

[a2584728] 02/10/2008 14:29

Short short short you cannot breach your banking convenants in this market and then expect the bank to support yopu when things get tougher and trust me the Oakdene market will only get tougher.

[williebiz] 02/10/2008 12:30

Buying interest, albeit only at low level - looks like these are tightly held

[williebiz] 02/10/2008 10:31

Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2008 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the AIM Rules For Companies.
Emphasis of matter - Going Concern
Without qualifying our conclusion, we draw attention to note 7 to the condensed financial statements, which show that the Company is in
breach of its covenants with its lenders and is currently relying on a temporary facility. Discussions around future banking terms are ongoing with its bankers. This position indicates the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern.

UHY Hacker Young LLP
Chartered Accountants
Quadrant House
17 Thomas More Street
Thomas More Square
London
E1W 1YW 30 September 2008

[williebiz] 02/10/2008 10:29

Oakdene tumbles despite lifeline
By Stanley Pignal

Published: October 2 2008 03:00 | Last updated: October 2 2008 03:00

Shares in Oakdene Homes lost 37 per cent of their value after the developer said it was using a temporary banking facility following the breach of its debt covenants.

The slump came despite assurances from Carl Turpin, chief executive, that it had "agreed in principle" a £2.5m cash lifeline with its bankers that would tide Oakdene over as the sale of completed homes replenished its balance sheet.

Mr Turpin, who is also one of the developer's largest shareholders, played down Oakdene's financial difficulties, characterising them as a "cash-flow glitch".

He added: "We will be in a position to make an announcement about the bank deal in the next seven days. Once we've concluded the talks, we will be in a strong position to move forward."

Oakdene, which builds homes mainly in south-east England, is the first builder to admit to breaching its banking covenants, though many privately held peers are thought to be in the same position. Larger listed builders have renegotiated their funding arrangements prior to expected breaches.

The slump in Oakdene's shares, down 5p to 8½p, came after the company's accountants highlighted its financial position as "a material uncertainty which may cast a significant doubt about the group's ability to continue as a going concern".

Mr Turpin excluded the possibility of a sale to a rival as a solution. "We've had a couple of approaches made to us in the past 12 months, but no one has the cash available to make purchases now," he said.
Copyright The Financial Times Limited 2008

[williebiz] 02/10/2008 10:28

Oakdene Homes' shares dive 37% in a single day
09:44 02 Oct 2008
By John Leitch

Oakdene Homes was in the wars yesterday as its share price tumbled by 37%.

The collapse was triggered by news that the developer was resorting to the use of a temporary banking facility following the breach of its debt covenants.

The share price fall could have been much worse: it came despite assurances from chief executive Carl Turpin that he had agreed in principle a £2.5m cash deal, a move that would be sufficient to tide the group over until the sale of completed homes replenished Oakdene's balance sheet.

The Financial Times talked to Turpin and this morning the paper reports him as believing that Oakdene's financial difficulties were a "cash-flow glitch".

The FT reports Turpin saying: "We will be in a position to make an announcement about the bank deal in the next seven days. Once we've concluded the talks we will be in a strong position to move forward."

Oakdene might be the first housebuilder to publicly admit to breaching its banking covenants but many other privately-owned groups are said to be in the same situation.

The situation with the larger Stock Market-quoted housebuilders is that they are making moves to restructure their funding arrangements ahead of anticipated breaches.

Yesterday, Oakdene's share slumped from 14p to just 9p.

Turpin has ruled out the possibility of selling Oakdene to a rival. He told the FT: "We've had a couple of approaches in the past 12 months, but no-one has the cash available to make purchases now."

[man1] 01/10/2008 20:56

Hi all, i dont hold shares in this company but i am following the fortunes of one of your directors Mr Hearley ..
After nearly four years as chairman of Reflec plc ...Many shareholders meetings ,with the promises of hughe rewards and deals just around the corner , he failed to deliver on any promises , he was finaly ousted in May of this year when shareholders took control of the board .

It took three accountants along time to shake all the skeletons out of the cupboards ..

The lesson i learnt was don't deal on jam tomorrow , management valuations etc , but hard concrete deal signing fact..
The MM know this game far better than any of us and that is why the company is at it's current price ..
Don't be suckered in ...

Good luck...

[tony727] 01/10/2008 12:29

These are bust, get out now they won't get any money. no one excepts the housing market to recover until 2012 any money would be swallowed up by creditors. IMHO

[williebiz] 01/10/2008 12:22

Not really a merger. They might give OKD a deadline to inject new capital into the business (otherwise banks to pull the plug) and options might include getting taken over by a capital-rich partner.

[chelseapaul] 01/10/2008 11:54

Can anyone see a merger being forced by the banks involved here ?

[bahtat] 01/10/2008 11:45

I believe our Nige is now also a director of OKD.

He did sell £15M or £17M? of his shares in Domino a couple of months ago, but since then he has had MyHome go belly up on him.

Rumour is that Saracens RFC are still losing him a coupe of £M py.

Testing times for all us 'small' investors Eh?

[the troll] 01/10/2008 11:06

yes, he held 15.34 % @ 1.5.08; ( no subsequent disposals reported )
does he have the 'clout' to dismiss Turpin & the rest of his 'cronies' I wonder; if he wants his money back, he may have to.

[toby tots] 01/10/2008 09:48

I wonder if Nigel Wray is still a share-holder!

[spaceparallax] 01/10/2008 09:39

For any developer with spare cash, the Company could be an attractive buyout because of the landbank.

[williebiz] 01/10/2008 09:22

5p to sell, it's horrible all right.

Could be worth a punt, after all, just been recapitalised up to a point and might squeeze through to survival.

Not yet for me!

[williebiz] 01/10/2008 08:15

5p on the cards, sorry holders looks like you were led up the garden path by poor mgt/ poor accounting policies over the past couple of years.

[williebiz] 01/10/2008 07:12

Oakdene in breach of banking covenants
30 September, 2008

By Tom Bill

Housebuilder fails to raise £5m on the stock exchange and reveals interim loss of £6.4m

Housebuilder Oakdene has failed to raise £5m through a share placement and dropped more than £6m into the red for the first six months of 2008.

It is also in breach of its banking covenants and relying on a temporary facility from its lenders.

The group said it had placed 8,987,108 of the 10m shares it had planned to and was seeking legal advice about what to do next.

It is thought one or more investors got cold feet given the fact shares were being offered at 50p despite the fact Oakdene's share price fell to 17p today.

By way of a sweetener it offered warrants with each share – or options to buy at 50p at a future date.

One City analyst said: "It clearly wasn't enough. The share price has been heading south for a few weeks now and someone has obviously got pulled out."

Its loss of £6.4m in the first half of 2008 followed land writedowns of £7m.

Turnover was down 41% from £18.9m to £11m.

The company said: "In common with most housebuilders Oakdene has suffered from the effects of the turmoil in the global markets which has led to a shortage of mortgage availability."

In relation to the likelihood of agreeing a covenant deal with its banks, it said: "Discussions around future banking terms are ongoing with our bankers. We are extremely grateful for their support to date and we are seeking to reach agreement on future support shortly."

From 'Building'. Shortly to be remamed 'Not actually building any right now' LOL

[kenny] 01/10/2008 00:36

Take out goodwill and revalue the property to likely curent sale values and there is probably less than 5p per share left for shareholders.

[kenny] 01/10/2008 00:22

Must be fraud involved to have to reverse sales made TWO years ago. Surely the directors or auditors must have known before or at least should have disclosed of flagged the non-completion issue.

I think the whole placing is illegal and no court would enforce an agreement to subscribe if the information he based his decision to subscribe upon, was seriously defective.

[davidosh] 30/9/2008 20:47

How can they have a split accounting policy dependent on who is buying the flats. Difficult to trust the figures and where did it state the old accounting policy in the accounts so that mere investors would have been aware of that ??

[williebiz] 30/9/2008 16:32

NH:
have you seen this note from Dresdner note on the housebuilding sector
NH:
(Bohemia - they have insurance ops. NSAM does not)
PM:
no
NH:
he's been on a tour of property markets in the Midlands and the North of England
NH:
and his impressions
PM:

NH:
well they are pretty bleak
NH:
carnage beyond even our most bearish expectations
PM:
oh dear
NH:
and there are plenty more juicy sound bites from the note
NH:
In Leeds, the city displayed a range from high spec, well located developments to what our source summarised in a pithy but unprintable one syllable adjective
NH:
here's the note
NH:
and after reading it
NH:
you wonder why the housebuilders are not getting kicked this morning
NH:
We have just returned from a tour of property markets in the Midlands and
North of England and our impression - especially of newbuild apartments -
is of carnage beyond even our most bearish expectations. Prices of urban
apartments appear to have fallen in many cases by 40 - 50%, volumes have
dried up to virtually zero, many developers have gone bust and land in
many cases appears to be worthless.

NH:
Our visits to agents and consultants in Birmingham, Manchester, Leeds and
Sheffield revealed a near-apocalyptic landscape which we believe to be far
worse than even the most candid builders have revealed in presentations. We
believe quoted housebuilders could be forced to issue early profit warnings and
are in danger of widespread breaches of banking covenants. The turmoil in the
banking sector looks almost certain to take lending to a new low and deter
would-be buyers indefinitely, in our view.

PM:
near-apocalyptic landscape????
NH:
One stark view was that the six leading property agents in Leeds have sold -
between them - only six new apartments in two months. We were also given
documentation sent by Barratt to property professionals throughout the group's
Yorkshire East division offering up to 43% off its properties on bulk deals of at
least 5 units. An attached price list of 161 homes showed average reductions of
26% (effectively 29% with agents' fees) - and 33% (effectively 36%) off
apartments (see below).
NH:
Barratt this month described 25% falls in price, and 40% in volume, as the
"Armageddon" scenario in its stress testing of its new banking covenants. In the
letter, dated 24 September headlined "Six Million Pound Yorkshire Property Sale
- Better Than Auction Prices!", the divisional head states "As a result of current
market conditions we have committed to sell up to 70 properties throughout our
region, equating to a value of approximately £6 million, to assist with our
operational targets

PM:
This stuff on Barrett is v interesting
NH:
Homes on 20 developments "have been significantly discounted to very realistic,
below valuation prices, subject to a bulk acquisition by a single purchaser of no
fewer than five units." The catalogue in fact lists 161 with "before and after"
prices downgraded from a total of £27.2m to £20.1m, ranging from 1 bed flats to
5-bed detached homes. The minimum discount is 18.2% for a 3-bed terraced
house in Bridlington. The maximum is a 5-bed detached in Doncaster. Agents
are promised fees of 2 - 3%.

NH:
Elsewhere on our tour there was a similarly bleak picture. In all four cities agents described: massive over-supply of apartments; developers selling at virtually any price to shift stock of flats; virtually all forthcoming new
NH:
developments mothballed; according to those we talked to, signs of the biggest listed housebuilders descending
into severe financial difficulties; residential sales staff numbers being cut by around two-thirds and a complete

NH:
do you want some more
NH:
bickie

Reminder to readers - if you arrived late and want to stop the dialogue 'jumping' as you catch up, hit the 'pause auto-scrolling' tab at the bottom right hand corner
PM:
yes please!
NH:
freezing up of the land market. Generally lenders were insisting on deposits of at least 25% for flats, with very vigorous valuation criteria.
NH:
The two signs of light - and which all our contacts agreed on - was the emergence of "vulture funds" and greatly increased rental demand and signs that rents had risen in low to mid single digit amounts.
NH:
There were, however, concerns that in most cases these cities had very large developments that were still underway and these could
disrupt the revival of rent levels.

NH:
In Birmingham, prices of apartments had fallen from their peak of around £300 per sq foot to £185 - roughly their level in 1998 when the city's boom in urban living got under way. Houses were estimated to be down by a lesser
20%. One agent told us volumes of flats through the city's office had declined by over 80% since the peak. The decline had been relatively steady over the past three years.

NH:
Large housebuilders were attempting to stall on major land deals or were being forced to sell options. Any bulk buyers were looking for at least 8% net yields (at
least 12% gross, we estimate). In Manchester the decline had been more recent but much more precipitous, according to our meetings. Many
private developers had failed or were teetering, we were told by all. Effective net yields after discounts were around 10%. We were highly impressed by the quality and prospects of the forthcoming Media City (one of only two schemes where new phases are coming out of the ground) but believe that developers will be impacted by
the failure of City Lofts on the same site.
NH:
In Leeds, the city displayed a range from high spec, well located developments to what our source summarised in a pithy but unprintable one syllable adjective. There was a high level of new stock coming onstream and much of the recently developed stock largely held by what we would describe as the victims of so-called "investor clubs".

Vulture funds were circling, we were told, but there appeared to be a tendency for bulk buyers to drop the price at the last moment. Residual land values on some sites zoned for apartments are likely to be seriously negative, we
were advised.
NH:
Final stop was Sheffield. Our contacts estimated that around 85% of all the new stock that has come into the city centre market was buy to let. Prices of flats had fallen 25% since the peak, with more on repossessions.

A worrying new trend, we were told, is that Alliance & Leicester had now started requiring two valuations on
purchases of flats: one a standard valuation, and the second a 90-day "Projected Market Valuation", ie what it would sell for in three months. Surveyors were under pressure to drive down valuations, we were told by one who
had seen his volumes plunge by over 90%.
NH:
We stress that urban ("city centre" is a misconception in many cases) apartments are not everything that housebuilders undertake. But they are around half of the UK output of Barratt and Taylor Wimpey. The Barratt
price list below indicates that houses are not immune and houses are more dependent on chains and less attractive to vulture funds in our view. Our own belief is that the smart vultures will choose to stay hungry for quite a long time to come.

[williebiz] 30/9/2008 16:28

Surprised more are not baling out