PIRI.L Regulatory News (PIRI)

30 Apr 2007 11:03

Oak Holdings PLC30 April 2007 FOR IMMEDIATE RELEASE30 APRIL 2007 OAK HOLDINGS PLC PRELIMINARY RESULTS FOR 12 MONTHS TO 31 OCTOBER 2006 Oak Holdings plc, the AIM-listed property development and consultancy group,that is developing the £350m YES! Project, a 1.2m sq ft covered fully integrated mixed-use leisure and conference scheme on a 327-acre site in South Yorkshire, announces its preliminary results for the year ended 31 October 2006. HIGHLIGHTS • In line with the Board's expectations operating loss reduced significantly to £0.58m compared to £1.055m last year • Net assets remain largely unchanged at £10.31m • Considerable progress achieved at YES! Project o Outline Planning Consent granted January 2007 o Strategic acquisition of 27 acre freehold site adjoining YES! Project o Collaboration Agreement signed with Skanska UK Plc o Memoranda of Understanding signed with E.ON and BT o Discussions with leading global brands as potential anchor tenants at advanced stage Contact: Oak Holdings Plc Tel: 020 7493 5522Steve Lewis, Chief ExecutiveMike Hill, Finance Director Baron Phillips Associates Tel: 020 7920 3161Baron Phillips Arbuthnot Securities Tel: 020 7012 2000Richard WoodTom Griffiths CHAIRMAN'S STATEMENT I am pleased to be able to report that your Company continues to makesignificant progress in respect of the YES! Project in South Yorkshire. As Ihave previously reported, in the early part of the financial year we suffered afrustrating period of delay beyond our control, but on 31 January 2007 we wereable to announce that Outline Planning Consent had been granted and theassociated Section 106 Agreement signed. Without doubt this is a major hurdlewhich has now been successfully overcome and we are progressing the next phasesof the development process with renewed vigour. We are also encouraged by the prospects for our consultancy division and whilstgrowth in this area has been limited by the need to prioritise YES! Projectactivity, we now expect significant progress from this division in the yearsahead. Results I am pleased to report the results for the 12 months to 31 October 2006. Due tothe current nature of the Company's business and in line with the Board'sexpectations we made an operating loss of £582,338 (2005: £1,055,194), on aturnover of £58,674 (2005: £144,448). It will be noted that the loss is greatlyreduced from the previous year due to lower levels of expenditure in relation to the YES! Project and tight control of expenditure. During the period in which we awaited planning clearance from the GovernmentOffice and the final consent from Rotherham Metropolitan Borough Council (RMBC),costs, other than the Directors' time and effort, were held to negligiblelevels. I would emphasise that, at this stage, YES! Project costs are notcapitalised. As in previous years, the Company continues to exercise prudent cost controlover all areas of its business, and controls and processes are monitored througha system of regular Management Meetings. In view of the loss for the year, theCompany is unable to declare a dividend. As at 31 October 2006, the Group had net assets of £10.31 million (2005: £10.88million), the major component being intangible assets, as disclosed in theGroup's Balance Sheet, of £10.83 million. This sum represents primarily thevalue attributed to the YES! Project Preferred Developer Agreement held by OakVentures Limited following its acquisition by the Group in 2003. The Directorsbelieve that, given the grant of Outline Planning Consent post the year end, the value attributed to this scheme would, if a formal valuation were to beundertaken, be greater than the current balance sheet amount. Strategy At the core of the Company's strategy is the development of the YES! Project,the £350 million covered, mixed-use leisure scheme located on a 327 acreex-coalfield site adjoining the Rother Valley Country Park in South Yorkshire.Our view remains that the YES! Project represents an exceptional opportunity toprovide shareholders with value and as such we make no apologies forconcentrating our resources in this area. The Company also intends to develop its consultancy division, established toutilise the extensive skills, expertise and contacts of the Directors, to offerproject consultancy on property development and investment, but will not do soto the detriment of the YES! Project. We also wish to grow the Company by taking advantage of the significant numberof development opportunities presented to it during the course of a year. Theappointment of Arbuthnot Securities Limited as Nomad and broker to the Companyon 4 April 2007 will help develop the Company's long term strategy. Funding and Capital Re-organisation During the year the Company has been extremely prudent with its cash resourcesand has utilised these to shareholders' best advantage. The Company had nobanking facilities or indebtedness at the year end, but has recently raised£250,000 from its bankers Adam & Company in relation to the purchase of the 27acres of freehold access land referred to in the Chief Executive's review. Given the nature of the YES! Project, the flow of opportunities, and the need to expand its commercial base, the Directors have explored during the year, andcontinue to explore, a number of funding avenues. The Board will be seeking permission by way of Special Resolution at the AnnualGeneral Meeting to consolidate the Company's shares to a more appropriate andmanageable level. Outlook In summarising the Company's exceptional progress on the YES! Project, whilstfrom time-to-time we have suffered delays beyond our control, we should notunderestimate our achievements in the year; the receipt of Outline PlanningConsent for the YES! Project and the avoidance of a Government Office 'call-in'are significant milestones for your Company. Once again I would like to take the opportunity to express the Board'sappreciation of shareholder interest and support during the year. Finally, I extend my thanks to my colleagues on the Board who, through theirsupport and unstinting efforts, have put your Company in an excellent positionto enter the next phase with every confidence. Malcolm SavageChairman30 April 2007 CHIEF EXECUTIVE'S REVIEW The YES! Project Shareholders are familiar with the lengthy and exhaustive consultation processwe conducted following our original submission for planning consent in January2005. We submitted a revised scheme nine months later and secured overwhelmingpolitical and community support for our plans as the potential positive impactof a scheme like YES! could have within the South Yorkshire region. Patient application to the consultative process led to a Resolution to Grantplanning consent by the RMBC Planning Committee at their meeting on 11 May 2006and Oak was able to announce this prior to last year's Annual General Meeting.As expected the scheme was then referred under statute to the Government Officefor further consideration. Our expectation was that this consideration couldtake several months before an outcome was determined, with the real possibilitythat the application would be referred to a Public Inquiry. We were thereforedelighted to announce on 14 July 2006 that the Secretary of State had decidednot to intervene in the process and to refer the project back to RMBC for theirdetermination. Diligent, preparatory work in ensuring that environmental,highway and planning issues were all properly addressed and taking time toexplain the scheme to national and local politicians and other stakeholders nodoubt contributed to this satisfactory outcome. Since the year end a number of key milestones have been achieved that take theYES! Project a long way down the development road. Formal Outline PlanningConsent was granted at the end of January 2007 and the numerous technical issuessurrounding this major project were incorporated into a Section 106 Agreement.This completed documentation forms the launch pad for the development andreflects the close working relationship which has been established between RMBCand your Company. Last month we acquired the freehold of 27 acres of land between the developmentsite and the A57 which will be necessary to accommodate the new access road andentry plaza to the development. The total consideration for this acquisition is£1million with £250,000 paid on acquisition and the balance payable in March2008. This key acquisition means that we now have freehold ownership and controlover the approved access land which greatly enhances our negotiation positionwith third parties. The YES! Project team is now finalising the terms of the Development Agreementwith RMBC which will supercede the current Preferred Developer Agreement. Led by architect Piers Gough of CZWG, and supported by Holder Mathias, the team isproceeding with detailed designs to provide a truly exciting and innovativeentertainment centre. All members of the Project Team are 'best in class' as it is the Company'sphilosophy that on a scheme of this importance an exceptional design teamenhances the appeal of the Project to the public and therefore improves theultimate investment value. On completion, the YES! Project will be the UK'sfirst multi-use, year round, covered leisure, entertainment, sports andconvention centre. It will have a critical mass of diverse facilities that webelieve will be anchored by a number of leading global brands underpinning thescheme's long term investment value. In July 2006 the Company announced it had signed a Memorandum of Understanding(MoU) with E.ON, the world's largest investor-owned power and gas company, tocollaborate on the YES! Project. Under the MoU, both companies are initiallyworking together with a view to designing sustainable solutions to the scheme'spower, cooling and heating needs. The new buildings will be designed to behighly environmentally friendly and at the same time will entertain and educatethe public about sustainable energy production. On 1 September 2006, the Company also signed a MoU with BT, one of the world'sleading providers of communications solutions and services, to collaborate onthe scheme's development. Under the MoU, BT have committed to work with Oak toexplore ways in which their extensive array of networked IT services andresearch and development capabilities can be integrated into, and showcasedwithin, the YES! Project. BT will also provide technical support to the designteam and will play a leading role in developing services and facilities whichenhance visitor experience. At the end of January, we signed a Collaboration Agreement with SkanskaConstruction UK Plc, one of the UK's leading construction servicesorganisations, for it to become Construction Partner on the YES! Project. Theimportance of this partnership cannot be underestimated as it enables Oak todraw upon Skanska's wealth of worldwide design and construction experience.Skanska has already committed resources and personnel to the design team and weare confident that its ongoing involvement will be of tremendous benefit to theefficiency of both the design and the construction process. Shareholders should draw comfort from the fact that multi-national companies ofthe calibre of E.ON, BT and Skanska have become integral members of the YES!development team thereby endorsing your Board's faith in the concept and in theability of your Company to deliver. The Board are therefore confident that YES!will become a world class, fully integrated, leisure, sports and conventioncentre which will prove highly attractive to the property investment market. We are currently in discussions with a number of leading international brands to become anchor tenants and we hope to be able to make further announcementswhen these discussions are finalised. Ongoing discussions with leading bank lenders indicate that subject to normallending criteria, the Company will be able to secure a Development Loan toprogress the project to completion. Consultancy Division Given the limited resources currently available, the Company's consultancydivision has made steady progress during the year. Oak has established anongoing consultancy with a major Russian developer to advise on the integrationof leisure and entertainment uses in a major development project adjacent to the Moscow ring road. This agreement has the potential to produce an attractiveongoing cash flow in future months. In addition preliminary work has been undertaken on consultancy advice to apotential Europe-wide leisure property investment fund. Following the significant progress in securing Outline Planning Consent, it isthe Company's intention to take steps to increase its resource base to takeadvantage of new opportunities when they arise. Accordingly, since the year endwe have recruited a Development Surveyor, Michael Wiseman MA MRICS, who joins us from Knight Frank, to provide further professional expertise. Stephen LewisChief Executive30 April 2007 OAK HOLDINGS PLC CONSOLIDATED PROFIT AND LOSS ACCOUNTfor the year ended 31 October 2006 Note 2006 2005 £ £ TURNOVER 58,674 144,448 Cost of sales - (126,708) --------- --------- GROSS PROFIT 58,674 17,740 Operating expenses (641,012) (1,072,934) --------- ---------OPERATING LOSS - continuing (582,338) (1,055,194) Net interest receivable 6,674 14,444 Profit on sale of investment 3,317 - --------- ---------LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (572,347) (1,040,750) Taxation - - --------- ---------RETAINED LOSS FOR THE FINANCIAL YEAR (572,347) (1,040,750) ========= =========BASIC LOSS PER SHARE (IN PENCE) 1 (0.1) (0.1) ========= ========= The Profit and Loss Account has been prepared on the basis that all operationsare continuing. There were no recognised gains or losses other than the resultfor the year as shown above. OAK HOLDINGS PLC BALANCE SHEETS31 October 2006 Group Group Company Company 2006 2005 2006 2005 £ £ £ £FIXED ASSETS Intangible 10,828,446 10,828,446 - -assetsTangible assets - 889 - 889Investments - - 10,435,959 10,435,959 ---------- ---------- ---------- ---------- 10,828,446 10,829,335 10,435,959 10,436,848 ---------- ---------- ---------- ---------- CURRENT ASSETS Debtors 27,149 20,385 1,453,302 1,217,420Cash at bank and 45,069 449,802 45,069 449,802in hand ---------- ---------- --------- --------- 72,218 470,187 1,498,371 1,667,222CREDITORS -amounts fallingdue within one year (411,549) (238,305) (363,366) (190,121) ---------- ---------- --------- ----------NET CURRENT ASSETS (339,331) 231,882 1,135,005 1,477,101 TOTAL ASSETS LESS CURRENT LIABILITIES 10,489,115 11,061,217 11,570,964 11,913,949 CREDITORS - amounts falling due after more one year (180,695) (180,695) - - ---------- ---------- ---------- ---------- 10,308,420 10,880,522 11,570,964 11,913,949 ---------- ---------- ---------- ----------CAPITAL AND RESERVES Called up share capital 7,480,886 7,480,783 7,480,886 7,480,783Share premium 2,987,146 2,987,004 2,987,146 2,987,004Capital redemptionreserve 164,667 164,667 164,667 164,667Profit and loss account (5,521,598) (4,949,251) (4,259,054) (3,915,824)Merger reserve 5,197,319 5,197,319 5,197,319 5,197,319 ---------- ---------- ---------- ---------- SHAREHOLDERS' FUNDS 10,308,420 10,880,522 11,570,964 11,913,949 ---------- ---------- ---------- ---------- OAK HOLDINGS PLC CONSOLIDATED CASH FLOW STATEMENTfor the year ended 31 October 2006 2006 2005 £ £NET CASH OUTFLOW FROM OPERATINGACTIVITIES (414,969) (894,254) RETURNS ON INVESTMENTS AND SERVICING OF FINANCENet interest received 6,674 14,444 CAPITAL EXPENDITURE AND FINANCIALINVESTMENTPayments to acquire shares inlimited companies (2,758) -Sale proceeds of shares in listedcompanies 6,075 - -------- --------- CASH OUTFLOW BEFORE FINANCING (404,978) (879,810) FINANCINGProceeds from issue of shares 245 1,135,365 -------- --------- INCREASE/(DECREASE) IN CASH (404,733) 255,555 ======== ========= OAK HOLDINGS PLC NOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 October 2006 1 LOSS PER SHAREBasic loss per ordinary share of 0.1 pence (2005: 0.1 pence) is calculated usingthe net basis on the Group loss for the year after tax of £572,347 (2005:£1,040,750) and on the weighted average number of shares in issue of 748,086,829 (2005: 708,887,207). 2006 2005 pence penceBasic loss per share (0.1) (0.1) ---- ---- 2 BASIS OF PREPARATION The financial information above for the year ended 31 October 2006 has been extracted from the financial statements which will be delivered later today tothe Registrar of Companies and on which the auditor will give an unqualified report, without any statement under Section 237(2) or (3) of the Companies Act1985. The comparative figures for the financial year ended 31 October 2005 are extracted from the statutory financial statements for that year which have already been filed with the Registrar of Companies and which were alsounqualified by the auditor. 3 AVAILABILITY OF ACCOUNTS Copies of the accounts will be sent to shareholders later today and will also be available at the Company's registered office, 15 Half Moon Street, London W1J 7AT. This information is provided by RNS The company news service from the London Stock Exchange