PIRI.L Regulatory News (PIRI)

28 Apr 2006 07:00

Oak Holdings plc (`Oak' or `the Company) Preliminary Results Oak Holdings plc, the AIM listed property development and consultancy group,announces its results for the year ended 31 October 2005.Overview * In line with the Board's expectations operating loss before exceptional items of ‚£1,055,194 (2004: ‚£725,642), on a turnover of ‚£144,448 (2004: ‚£ 102,611) * Net assets of ‚£10.88 million (2004: ‚£10.79 million) and cash of ‚£449,802 (2004: ‚£194,247) * Good progress at major leisure development, the YES! project, in South Yorkshire * Anticipate obtaining a Resolution to Grant from Rotherham Metropolitan Borough Council before AGM on 25 May * Well placed to achieve outline planning consent in the near future which should enable construction to commence in 2007 and the development to be completed in 2009 * Potential anchor tenants in place and further expected following receipt of the Resolution to Grant * Good prospects for consultancy division with a considerable number of opportunities being progressed * Exploring a number of development opportunities to expand area of operations and provide attractive returns Further enquiries:Oak Holdings plc Mike Hill, Finance Director Tel: 020 7493 5522St Brides Media & Finance Ltd Isabel Crossley Tel: 020 7242 4477Chairman's StatementThe year has been particularly busy for the Company in respect of our majorleisure development, the YES! Project, in South Yorkshire, where we have madesignificant progress. Following a frustrating period of delay beyond ourcontrol, we now believe that the project is well placed to achieve outlineplanning consent in the near future and anticipate obtaining a Resolution toGrant from Rotherham Metropolitan Borough Council prior to the Company's AnnualGeneral Meeting on 25 May 2006. We are also encouraged by the consultancydivision's prospects and we anticipate a growth in income from this division inthe years ahead.ResultsI am pleased to report the results for the 12 months to 31 October 2005. Inline with the Board's expectations we made an operating loss before exceptionalitems of ‚£1,055,194 (2004: ‚£725,642), on a turnover of ‚£144,448 (2004: ‚£102,611). The major part of this loss is a consequence of the expenditure inrelation to the YES! Project, which, as in past years, has not beencapitalised. Despite delays suffered as we move the project towards consent,expenditure has been tightly controlled and contained within planned forecastlevels and significant progress has been made. The Company continues toexercise prudent cost control over all areas of its business. In view of theCompany's loss for the year, no dividend is recommended (2004: nil).As at 31 October 2005, the Group had net assets of ‚£10.88 million, the majorcomponents being intangible assets, as disclosed in the Group's Balance Sheet,(2004: ‚£10.78 million) and cash of ‚£449,802 (2004: ‚£194,247).StrategyThe foundation of the Company's strategy is the development of the YES!Project, the ‚£270 million covered, mixed-use leisure scheme located on a 327acre ex-coalfield site adjoining the Rother Valley Country Park in SouthYorkshire. We believe that this project represents an exceptional opportunityto provide our shareholders with value and as such, when required, weprioritise our resources to this end.The development of the consultancy division, established to utilise theextensive skills, expertise and contacts of the Directors to offer projectconsultancy on every aspect of property development and investment is also akey strategic goal. The Directors believe it is capable of providingsignificant growth and shareholder return. Additionally with an internationalreputation in the leisure, retail and hotel sectors, Oak's Directors arefrequently offered a number of property opportunities where the application oftheir skills could generate substantial rewards. The Board will in the comingyear seek to develop the ability to participate in these opportunities and tobroaden the commercial base of the Oak brand.Current TradingThe YES! ProjectFollowing the appointment of internationally acclaimed architect, Piers Goughof CZWG, together with Holder Mathias, as designers to the project, an OutlinePlanning Application was submitted in January 2005. The Company then undertookan exhaustive consultative process resulting in amendments to the applicationto ensure harmony with the Renaissance South Yorkshire programme. The redefinedscheme draws upon the increasing appeal of extreme sports participation andoffers a truly world class facility. Importantly, the changes have improvedboth political and local support for the project including endorsement fromSheffield City Council. The revised planning application was submitted on 1September 2005. The scheme has been well received by the architectural pressand will be a landmark for the region.During the consultative process considerable effort has been expended insecuring support from the relevant Government Agencies. Whilst this has beenfrustrating, it has been crucial to ensure that there were no outstandingissues that could potentially have a negative impact on the planning process.We now have a scheme which we are increasingly confident will achieve anoutline planning consent.The Board has been advised that the YES! Project will be presented to RotherhamMetropolitan Borough Council's Planning Committee in the very near future and Iexpect to be able to announce at our Annual General Meeting on 25 May 2006 thereceipt of the Borough Council's Resolution to Grant. Whilst the scheme hasstatutorily to be referred to the Regional Office of the Deputy Prime Minister,we believe that achievement of the Resolution to Grant represents the mostsignificant milestone to date and an ensuing planning permission should enableconstruction to commence in 2007 and the development to be completed in 2009.Dialogue with potential anchor tenants including Baydrive Group, which owns theTopGolf courses, Sony UK Ltd and Venture Xtreme UK Ltd, the specialist extremesports activity company, continues. Following receipt of the Resolution toGrant we will follow-up the considerable interest expressed by othersignificant potential tenants in this exciting scheme.On completion the YES! Project will comprise the first multi-use, year round,covered leisure and entertainment centre in the UK. With a critical mass ofdiffering facilities, the scheme will produce a new genre of propertyinvestment, allowing it to command an investment value on a par with otherprime investment categories rather than that historically associated with theleisure sector.Consultancy DivisionA considerable number of consultancy opportunities are being progressed, whichwe hope will come to fruition imminently and boost revenue in the short-term.As previously announced, we signed consultancy agreements to advise on twomajor themed leisure parks in the UK - Shakespeare's World near Banbury andOutlaw's Kingdom near Mansfield. Also, on 28 November 2005, Oak announced thatit had been retained by the SupperClub London Limited to advise on thedevelopment, investment and management process involved in establishing thisinternational lifestyle concept in the UK. In addition to consultancy fees andin part exchange for a proportion of its fees, Oak has acquired a 10%shareholding in SupperClub London Limited. The `fees for a combination of cashand equity' model is our preferred consultancy offering, which we expect willin time bring substantial capital gain for the Company.During the year, the land at Great Haywood was sold at around book value.Whilst the site had planning consent for a development, it was of a limited andspecialist nature. This, together with a difficult planning history and siteconditions, led the Board to conclude that shareholder funds should not berisked in pursuit of an uncertain outcome.FundingIn April 2005 at the time last year's preliminary results announcement, theCompany raised ‚£1.1 million, net of expenses, through a share placing, toprovide sufficient working capital, to take the YES! Project through toResolution to Grant. Upon receipt of a Resolution to Grant, your Company willseek further funding to develop the YES! Project. The precise nature of anyfunding is to be determined and several avenues are being explored by yourBoard. The Directors are mindful of the need to provide further working capitalfor the consultancy division and the business in general.The Company continues to be presented with development opportunities, whichupon initial assessment, appear to provide the potential to expand theCompany's area of operations and to provide attractive returns. The Companywill therefore seek, as appropriate, additional lines of funding to develop andparticipate in such opportunities to create shareholder value.ConclusionOnce again I would like to take the opportunity to express the Board'sappreciation of shareholders unwavering interest and support during the year, ayear in which, despite the delay suffered by the YES! Project, tangibleprogress has been achieved. I would also like to extend my thanks to mycolleagues on the Board who, through their support and unstinting efforts, haveput us in a position to look forward to the future positively.Finally, I wish to record the deep sense of loss, which my fellow Directors andI feel at the death on 19 December 2005 after a short illness of our greatfriend and charming colleague, St.John Hartnell. St.John was always a strongadvocate of the YES! Project and was a founder shareholder of Oak HoldingsLimited prior to its reversal into AWG Services plc. His contribution to theCompany will be sadly missed.Malcolm Savage27 April 2006OAK HOLDINGS PLCCONSOLIDATED PROFIT AND LOSS ACCOUNTfor the year ended 31 October 2005 2005 2004 Note ‚£ ‚£ TURNOVER - continuing 144,448 - - discontinued - 102,611 Cost of sales (126,708) (98,269) GROSS PROFIT 17,740 4,342 Operating expenses (1,072,934) (729,984) OPERATING LOSS - continuing (1,055,194) (729,984) - discontinued - 4,342 (1,055,194) (725,642) Net interest receivable 14,444 23,882 LOSS ON ORDINARY ACTIVITIES BEFORE (1,040,750) (701,760)TAXATION Taxation - - RETAINED LOSS FOR THE FINANCIAL YEAR (1,040,750) (701,760) BASIC LOSS PER SHARE (IN PENCE) 1 (0.1) (0.1) There were no recognised gains or losses other than the result for the year asshown above.OAK HOLDINGS PLCBALANCE SHEETS31 October 2005 Note Group Group Company Company 2005 2004 2005 2004 ‚£ ‚£ ‚£ ‚£ FIXED ASSETS Intangible assets 10,828,446 10,828,446 - - Tangible assets 889 4,150 889 4,150 Investments - - 10,435,959 10,435,959 10,829,335 10,832,596 10,436,848 10,440,109 CURRENT ASSETS Stock - 126,708 - 126,708 Debtors 20,385 21,011 1,217,420 568,759 Cash at bank and 449,802 194,247 449,802 194,247in hand 470,187 341,966 1,667,222 889,714 CREDITORS - (238,305) (207,960) (190,121) (154,776)amounts falling due within one year NET CURRENT ASSETS 231,882 134,006 1,477,101 734,938 TOTAL ASSETS LESS 11,061,217 10,966,602 11,913,949 11,175,047CURRENT LIABILITIES CREDITORS - (180,695) (180,695) - -amounts falling due after more one year 10,880,522 10,785,907 11,913,949 11,175,047 CAPITAL AND RESERVES Called up share 2 7,480,783 6,539,483 7,480,783 6,539,483capital Share premium 2,987,004 2,792,939 2,987,004 2,792,939 Capital redemption 164,667 164,667 164667 164,667reserve Profit and loss (4,949,251) (3,908,501) (3,915,824) (3,519,361)account Merger reserve 5,197,319 5,197,319 5,197,319 5,197,319 SHAREHOLDERS' 10,880,522 10,785,907 11,913,949 11,175,047FUNDS OAK HOLDINGS PLCCONSOLIDATED CASH FLOW STATEMENTfor the year ended 31 October 2005 2005 2004 ‚£ ‚£ ‚£ ‚£ NET CASH OUTFLOW FROM (894,254) (706,371)OPERATING ACTIVITIES RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Net interest received 14,444 23,882 CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Payments to acquire - (4,620)tangible fixed assets ACQUISITIONS Bank overdraft acquired - (20,478) with subsidiary Costs of acquisition - (310,509) - (330,987) CASH OUTFLOW BEFORE (879,810) (1,018,096)FINANCING FINANCING Repayment of loans - (25,624) Proceeds from issue of 1,135,365 3,566 shares 1,135,365 (22,058) INCREASE/(DECREASE) IN 255,555 (1,040,154)CASH OAK HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 October 20051 LOSS PER SHAREBasic loss per ordinary share of 0.1 pence (2004: 0.1 pence) is calculatedusing the net basis on the Group loss for the year after tax of ‚£1,040,750(2004: ‚£701,760) and on the weighted average number of shares in issue of708,887,207 (2004:612,837,889). 2005 2004 pence pence Basic loss per share (0.1) (0.1) 2 CALLED UP SHARE CAPITAL 2005 2004 Authorised: ‚£ ‚£ 1,100,000,000 (2004: 1,100,000,000) Ordinary shares of 1 pence each 11,000,000 11,000,000 Allotted issued and fully paid: 748,078,236 (2004: 653,948,279) Ordinary shares of 1 pence each 7,480,783 6,539,483 On 7 December 2004 119,147 shares of 1p each were issued at price of 2.38p pershare as a result of the exercise of a warrant instrument dated 24 October2003.On 12 April 2005 the Company issued 94,010,810 ordinary shares of 1p each at1.25p in order to raise funds to continue with the development of the YES!Project.Share optionsAt 31 October 2005 the following current and former directors held thefollowing options to acquire Company shares:-Approved share option scheme:-Director Number of First date of Last date of Exercise price Shares exercise exercise per share S G Thomson 622,860 28 July 2003 28 July 2010 ‚£0.0465 M T A Hill 622,860 28 July 2003 28 July 2010 ‚£0.0465 Unapproved share option scheme:-Director Number of First date of Last date of Exercise price Shares exercise exercise per share S G Thomson 833,220 28 July 2003 28 July 2007 ‚£0.0465 S G Thomson 2,500,000 17 January 2004 17 January 2008 ‚£0.0212 M T A Hill 2,500,000 17 January 2004 17 January 2008 ‚£0.0212 No options have been exercised during the year.WarrantsThe Company issued warrants on 24 October 2003 entitling warrant holders tosubscribe in cash at a price of 2.38p per Ordinary share for up to 101,419,687Ordinary shares. At 31 October 2005 warrants had been exercised on 268,979shares leaving 101,150,708 unexercised. The warrants can be exercised on 1December in any year up to and including 2013.On 19 December 2005, the Company issued warrants to David Taylor PartnershipsLimited (DTP), consultants acting for The Company on the YES! Project,entitling them to subscribe for up to 4,500,000 Ordinary shares at a price of2p each. The warrants are exercisable at any time between receiving a planningconsent that can be implemented in respect of the YES! Project and 31 December2007.The warrants were issued in recognition of DTP invoicing only a smallproportion of its normal level of fees and as such the Company agreed that DTPcould invoice a success fee when an implementable planning consent wasreceived. Such success fee will be wholly satisfied by the issue of ordinaryshares against the exercised warrants.3 PUBLICATION OF NON-STATUTORY ACCOUNTSThe financial information set out in this preliminary announcement does notconstitute statutory accounts as defined in section 240 of the Companies Act1985.The consolidated balance sheet as at 31 October 2005 and the consolidatedprofit and loss account, consolidated cash flow statement and associated notesfor the year have been extracted from the group's financial statements.4 AVAILABILITY OF ACCOUNTSCopies of the accounts will be sent to shareholders shortly and will also beavailable at the Company's registered office, 15 Half Moon Street, London W1J7AT.ENDOAK HOLDINGS PLC