INTERIM RESULTS 2007
Oak Holdings plc ("Oak" or the "Company"), the AIM listed property development
and consultancy group that is developing the £350million YES! Project, a
1.2million sq ft covered fully integrated mixed-use leisure and conference
scheme on a 327-acre site in South Yorkshire, announces its unaudited interim
results for the six months ended 30 April 2007.
Highlights
* Significant reduction in operating loss to £116,336 (2006: £261,555)
* Consultancy income increased to £350,500 (2006: £34,000)
* Historic Net Assets remained largely unchanged at £10.22 million
* Considerable progress achieved at YES! Project:
- Outline Planning Consent granted January 2007
- Strategic acquisition of key 27 acre freehold site providing access to the
development site
- Development Agreement being progressed to completion
- Opinion of Value commissioned
* Directors confident in Oak's "latent" shareholder value
Malcolm Savage, Chairman of Oak, said: "The Board remains confident in the YES!
Project and its potential to generate shareholder value and of the inherent
value in the Company."
For further information, please contact:
Oak Holdings plc Tel: 020 7493 5522
Mike Hill, Finance Director michael.hill@oakholdings.co.uk
www.oakholdings.co.uk
Rawlings Financial PR Limited Tel: 01756 770376
John Rawlings john@rawlingsfinancial.co.uk
Catriona Valentine catriona@rawlingsfinancial.co.uk
Arbuthnot Securities Limited Tel: 020 7012 2000
Tom Griffiths
CHAIRMAN'S STATEMENT
As I reported at the Annual General Meeting in May of this year, the Company
continues to make significant progress in respect of the YES! Project in South
Yorkshire. In January, we were able to announce that Outline Planning Consent
had been granted and the associated Section 106 Agreement signed; a major
hurdle successfully overcome. We continue to progress the project with vigour.
We remain confident in the prospects for our consultancy division; the six
months to April were particularly pleasing. However, whilst the years ahead
promise a profitable income stream from this division, our resources remain
focused on the YES! Project.
Results
In six months to 30 April 2007, I am pleased to report that the Company reduced
its operating loss to £116,336 (2006: £261,555) and consultancy income
increased significantly to £350,500 (2006: £34,000).
Tight expenditure control remains in place in relation both to YES! costs and
the more general running costs of the Company. As previously stated, YES! costs
are not capitalised. The reduced loss is even more creditable as it includes a
first time charge in respect of FRS20, Accounting for Share Options, of £33,000
(2006: nil).
Current Trading
The YES! Project
Following on from the Outline Planning permission and Section 106 Agreement
achieved in January of this year, the Company acquired the strategically
important freehold of 27 acres of land between the development site and the A57
which secured access to the development site. The total consideration for this
acquisition was £1 million with £250,000 paid on acquisition and the balance
payable in March 2008. This acquisition demonstrates our determination to
ensure that this important regional project goes ahead for the benefit of Oak
Holdings plc and its shareholders and gives the Company ownership of critical
acreage.
The YES! Project team has concentrated on finalising the terms of a Development
Agreement with Rotherham Metropolitan Borough Council, which
will supersede the now extended Preferred Developer Agreement. We expect to
conclude these intensive negotiations soon.
Discussions continue with national and international companies with leading
brand names to become anchor tenants and partners. We expect to reach
satisfactory conclusions to these discussions upon finalisation of the
Development Agreement.
Bank lenders have indicated that, subject to normal lending criteria, the
Company will be able to secure a Development Loan to progress the project to
completion.
Consultancy Division
The consultancy division's potential remains encouraging but, given the
currently limited resources of the Company and the need to prioritise the YES!
Project, it is difficult to predict income.
Funding
The directors believe that the share consolidation determined at the Annual
General Meeting earlier in the year will improve the market's overall
perception of the Company and make it more attractive to long term investors.
The directors are also confident that the current inherent value in the
Company, and particularly its YES! Project, is not reflected in its market
capitalisation. Accordingly, the Board has recently commissioned independent
property advisors to express an "Opinion of Value" of the YES! Project.
The Board is confident that this "Opinion" will be substantially in excess of
the Company's current market capitalisation.
The Directors continue to explore sources of funding for the Company and will
only conclude such review when satisfied that a particular source is in the
best interests of the Company and its shareholders as a whole. The Directors
envisage that such funding will encompass the immediate requirements of the
YES! Project as well as the Company's day-to-day working capital needs. The
Directors are confident of being in a position to be able to make an
announcement on this matter in the near future.
I also wish to demonstrate the Directors' confidence in the Company's future by
referring to two matters. First, two directors, namely Stephen Lewis and Graham
Axford, have provided guarantees in respect of the bank loan of £250,000
utilised by the Company to purchase the YES! Project access land, referred to
above. Secondly, each of the Directors has contributed towards the short term
working capital needs of the Company, by providing loans to the Company,
pending resolution of the exploration of funding opportunities referred to in
the preceding paragraph. These loans, totalling £25,000, have been provided on
reasonable commercial terms and will be repayable out of the proceeds of any
equity funding or bank finance.
Outlook
The Board remains confident in the YES! Project and its potential to generate
shareholder value and of the inherent value in the Company.
Finally, as always, I would like to thank my colleagues and our shareholders
for their continued support.
Malcolm Savage
Chairman 27 July 2007
Profit and loss account
For the six months ended 30 April 2007
6 months 6 months 12 months
ended ended ended
30 April 30 April 31 October
2007 2006 2006
(unaudited) (unaudited) (audited)
£ £ £
Turnover 350,500 34,000 58,674
Cost of sales - - -
------- ------- -------
Gross profit 350,500 34,000 58,674
Operating expenses (466,836) (295,555) (641,012)
------- ------- -------
Operating loss (116,336) (261,555) (582,338)
Interest (payable)/receivable (1,159) 5,283 6,674
Profit on sale of investment - - 3,317
------- ------- -------
Loss on ordinary activities before
taxation (117,495) (256,272) (572,347)
Taxation - - -
------- ------- -------
Retained loss for the period (117,495) (256,272) (572,347)
======= ======= =======
Basic loss per share (in pence) (0.02p) (0.1p) (0.1p)
Balance Sheet
As at 30 April 2007
As at 30 As at 30 As at 31
April 2007 April 2006 October 2006
(unaudited) (unaudited) (audited)
£ £ £
Fixed Assets
Intangible assets 10,828,446 10,828,446 10,828,446
Tangible assets - land 250,000 - -
Investments - 2,759 -
---------- ---------- ----------
11,078,446 10,831,205 10,828,446
---------- ---------- ----------
Current Assets
Debtors 112,797 19,432 27,149
Cash at bank and in hand 15,613 176,302 45,069
---------- ---------- ----------
128,410 195,734 72,218
Current Liabilities
Creditors falling due within one year (801,381) (221,749) (411,549)
---------- ---------- ----------
Net Current Liabilities (672,971) (26,015) (339,331)
---------- ---------- ----------
Total assets less current liabilities 10,405,475 10,805,190 10,489,115
Creditors falling due after more
than one year (180,695) (180,695) (180,695)
---------- ---------- ----------
Net Assets 10,224,780 10,624,495 10,308,420
========== ========== ==========
Capital and Reserves
Called up share capital 7,481,245 7,480,886 7,480,886
Share premium account 2,987,642 2,987,146 2,987,146
Capital redemption reserve 164,667 164,667 164,667
Profit and loss account (5,639,093) (5,205,523) (5,521,598)
Merger reserve 5,197,319 5,197,319 5,197,319
Other reserve 33,000 - -
---------- ---------- ---------- Equity: shareholders' funds 10,224,780 10,624,495 10,308,420
========== ========== ==========
Cash Flow Statement
For the six months ended 30 April 2007
6 months 6 months 12 months
ended ended ended
30 April 30 April 31 October
2007 2006 2006
(unaudited) (unaudited) (audited)
£ £ £
Net cash outflow from
Operating activities (29,152) (276,269) (414,969)
Return on investments and servicing
of finance
Net interest (paid)/received (1,159) 5,283 6,674
Capital expenditure and financial
investments
Tangible fixed asset - land (250,000) - -
Investments - (2,759) (2,758)
Sale proceeds of investments - - 6,075
-------- -------- --------
Cash Outflow before Financing (280,311) (273,745) (404,978)
Financing
Proceeds from issue of shares 855 245 245
-------- -------- --------
Decrease in cash (279,456) (273,500) (404,733)
======== ======== ========
Notes to the Interim Results
1) The Group results have been prepared in accordance with the accounting
polices stated in the 2006 annual report. In respect of FRS20, Accounting
for Share Options, the application of which is obligatory for the six
months ended 30 April 2007, a charge of £33,000 has been made to the profit
and loss account and a corresponding credit to other reserves.
2) There is no provision for corporation tax for the half year, on the basis
that no liability will arise for the 6 months to 30 April 2007.
3) Goodwill arose on the acquisition of Oak Holdings Limited on 1 December
2003 and was attributable primarily to the selection of Oak Holdings
Limited by Rotherham Metropolitan Borough Council (RMBC) as preferred
developer on the YES! Project, a planned major entertainment and leisure
complex. No amortisation of goodwill has arisen as the directors consider
that the useful life of the acquired goodwill relates to the realisation of
the YES! Project.
4) The Company's interest in the YES! Project was independently assessed on 22
July 2003 by Lambert Smith Hampton in their "Opinion of Value" as being
some £10.5 million.
5) The calculation of loss per share is based upon the weighted average number
of shares in issue during the period of 748,116,775 (Year ended 31 October
2006 - 748,086,829 and 6 months ended 30 April 2006 - 748,085,110).
6) The results for the periods to 30 April 2007 and 30 April 2006 are
unaudited and do not constitute statutory accounts in accordance with
section 240 of the Companies Act 1985. The comparative figures for the year
ended 31 October 2006 are an abbreviated version of the full accounts which
have been reported on without qualification by the auditors. The auditors
however drew attention, in their report on the financial statements for the
year ended 31 October 2006, to the value of Goodwill in the Group Balance
Sheet being dependent upon Oak finalising a Development Agreement with RMBC
in respect of the YES! Project, obtaining planning permission, being able
to raise development capital to realise the project and being able to
secure commitments from tenants for the scheme. The auditors also drew
attention to the Group's need to secure further funds to provide working
capital to enable it to continue to purse the project and continue as a
going concern. The financial statements for the year ended 31 October 2006
have been filed with the Registrar of Companies.
7) No dividend is proposed for the period ended 30 April 2007.
8) Copies of the interim results will be available to members of the public
from the Company's registered office, at 15 Half Moon Street, London W1J
7AT and on the Company's website, www.oakholdings.co.uk