Secondary Recommendation

Oakdene Homes - Low prospective PE of 2.9 belies excellent record and prospects

November 2004

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Over the month, we met up with Carl Turpin, chief executive of fast growing residential housebuilder, Oakdene Homes. Oakdene is one of the few companies which can fully justify its spring promotion from OFEX toAIM, given its trading performance that has seen pretax profit grow more than fivefold from Â£0.55m to Â£3m in the two years ending 31 December 2003. The latest forecast from Seymour Pierce indicates a continuation of this strong momentum, with profit expected to nearly double to Â£5.9m this year, before rising again to Â£10m in 2005. Given these prospects, its meagre prospective PE of 2.9 looks ridiculous and may reflect the fact that investors still recall Turpin's previous venture, Wiseoak, which, like many small housebuil ...

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