Propan Homes

Residential property developer Propan was only slightly behind forecasts in the year to March, reporting diluted earnings per share of 3p as it made £2.5m of pre-tax profits, up 29% on the previous year, on turnover up from £10m to £12.9m. But the performance from continuing operations was relatively poor in what has been a strong market for new homes in the South East of England. Operating profits (excluding a profit booked from the sale of a site by March acquisition Sitemaster) were down from £2m to £1.5m, on stable turnover. A 0.6p per share dividend payout has been proposed, payable on 2 August, giving the shares a tidy yield of 4.3% while still freeing up plenty of capital for investment. This will be used to develop a hoped-for 178 residential units on 20 sites over the next two years. 55 such units were built, or were under construction, by the end of March this year, so this looks like a crunch year for the company, with a substantial uplift in activity planned. Risky, but probably worth a punt.

Sector: General Financial

Companies: Park Plaza Hotels

Market cap: £10m

PE Forecast: n/a

Share price: 14p

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