PIRI.L Regulatory News (PIRI)

14 Apr 2005 13:33

Oak Holdings PLC14 April 2005 The following amends the final results and placing announcement released todayunder RNS number 0334L at 7am. The figure in the balance sheet under Capital and Reserves, Profit and Loss,should be (3,908,501) and not (3,206,741) as previously stated. All other details remain unchanged and the full amended announcement appearsbelow. Oak Holdings plc / Epic: OAH / Index: AIM / Sector: Property Development 14 April 2005 Oak Holdings plc ('Oak' or 'the Company') Preliminary Results and Placing of 94,010,810 New Ordinary Shares of 1p each at 1.25p per Share to Raise £1.1 Million Oak Holdings plc, the AIM-listed property development company, announces itsresults for the year ended 31 October 2004. Overview • Operating loss before exceptional items of £725,642 (2003: £156,862) in line with the Board's expectations. • Net assets of £10.78 million and cash of £194,247. • Planning application submitted for the £270 million YES! Project, a major leisure and entertainment scheme in South Yorkshire with consent expected to be secured around the end of the calendar year. • Awarded an extension of its Preferred Developer Agreement status by Rotherham Metropolitan Council. • MOU's signed with three potential anchor tenants. • Internationally renowned CZWG Holder Mathias appointed as the project architects. • Increased political and local support for the project. • Successful share placing raising £1.1 million net of expenses, £283,010 of which is further investment by members of the current Oak Board, the Concert Party and related interests. • Preparatory work on the consultancy side of the business should deliver value and broaden opportunities. • Continues to explore other projects which have the potential to make good returns for shareholders. Commenting on the results and the share placing, CEO Steve Lewis said: "Thishas been a busy year for us with a significant amount of time being spent onadvancing our flagship YES! Project in South Yorkshire. With the foundationsnow in place, together with a healthy cash position following the £1.1 millionplacing announced today, we can now take this £270 million leisure andentertainment scheme into its next phase. Over the next six months we will bebusy building on the regional and national support already gained and will lookto secure further partners to help us maximize the value of the project.Furthermore, we have been exploring other property investment opportunities andadvancing our property advisory service which we are confidant will add to thefuture success of the Company. With an aggressive growth strategy in place weare excited about the future and are looking forward to fully maximising the OakHoldings brand." Further enquiries: Oak Holdings plc Malcolm Savage, ChairmanTel: 020 7493 5522 St Brides Media & Finance Ltd Isabel Crossley/Hugo de SalisTel: 020 7242 4477 Chairman's Statement This has been a good year for Oak Holdings during which the foundations havebeen laid towards the creation of a major development company focused on theleisure and entertainment sector and a successful property consultancy. Results I am pleased to report the results for the 12 months to 31 October 2004. Inline with your Board's expectations, the Company made an operating loss beforeexceptional items of £725,642 (2003: £156,862). The Company continues toexercise prudent cost control; the major proportion of costs in the 12 monthswas incurred in advancing the YES! Project, which the Board believes willgenerate substantial returns in the future. In view of this loss no dividend isrecommended (2003: nil). As at 31 October 2004 the Group had net assets of £10.78 million, the majorcomponent being intangible assets, as disclosed in the Group's Balance Sheet,(2003: £1.36 million) and cash of £194,247 (2003: £1,208,777). Strategy The year started with the Directors fulfilling their strategy of identifying asuitable reverse takeover acquisition, which was approved by shareholders at anExtraordinary General Meeting, held on 1 December 2003. Since that time, thestrategic focus has been to progress the development of the YES! Project, amajor covered mixed-use leisure scheme in South Yorkshire, and to begin buildinga property consultancy operation. The YES! ('Yorkshire Entertainment Sensation') Project is located on a 327 acreex-coalfield site adjoining the Rother Valley Country Park in Rotherham.Following the Company's success in the OJEC competition process and the award ofa Preferred Developer Agreement by Rotherham Metropolitan Borough Council, anoutline planning application was submitted on 31 January 2005 for astate-of-the-art leisure and entertainment centre. The scheme comprises two hotels, two theatres, an extreme sports facility, agolf driving range, entertainment centre, live TV studio, health and fitness spatogether with a wide range of restaurants, cafes and bars. The PreferredDeveloper Agreement envisages the grant of a 250 year lease of the developmentsite and a similar interest in the adjoining Country Park. Whilst we continue to negotiate with a number of companies which have expressedinterest in the project, including leading international hotel operators, theCompany has already entered into Memoranda of Understanding with the followingthree potential anchor tenants: • Clear Channel Entertainment, for a 2,500 seat 'West End' style theatre capable of staging major productions; • Baydrive Group Ltd, for a driving range using computer chip technology; and • Venture Xtreme (UK) Ltd, for an extreme sports centre including white water canoe slalom. It is encouraging to note that there is continuing local support for the scheme,due in part to the wide variety of new employment opportunities that the projectwill bring together with the inward investment which will be attracted to thearea. Whilst there is obviously some risk in the planning process considerabletime and effort has been put into researching the market, canvassing localopinion and taking political soundings. The feedback received has led theCompany to believe that consent will be secured around the end of the calendaryear for a major leisure and entertainment scheme on this site. It isanticipated that the development will be completed in early 2009. The Group is establishing a reputation in the leisure field and a number ofother potential projects have been assessed during the year. We will continueto evaluate opportunities in order to identify projects which have the potentialto make good returns for our shareholders. Using the professional skills and experience available within the Company, weare also able to offer a complete property advisory service to the owners ofcommercial real estate. Marketed as a 'bolt-on property company', it enablesowners to secure holistic guidance concerning their real estate investmentstrategy from a single source. The prospects for an increasing revenue streamand possible equity participation from this aspect of the business lookpromising. Current Trading The planning submission period for the YES! Project has been longer than theBoard originally envisaged due to the complexity of the scheme and need to puttime and effort into research and local lobbying to ensure the best possiblereception for the proposal. Following advice, new architects were appointed andfull traffic and environmental assessments undertaken. In addition, the analysisof other development opportunities and preparatory work on the consultancy sideof the business has required modest investment of time and money which shoulddeliver value and broaden your Company's opportunities. Placing of Shares Since the Company has concentrated on progressing the YES! Project, there has,as forecast by the Board, inevitably been net cash outflow in the 12 monthperiod. Since the year end the cash outflow has continued on a controlled basisand in line with our projections. As explained earlier in my statement, forgood reasons the date of the planning decision will be later than previouslyenvisaged and the Company requires additional funding to take it through to thatdate. Accordingly the Company has sought the necessary further funding and I ampleased to announce a successful share placing raising £1.1 million net ofexpenses through the issue of 94,010,810 new ordinary shares of 1p at 1.25p pershare. The investors who have subscribed to the New Shares include the Oak Directors,the Concert Party and related interests as to 22,640,810 New Shares, certainadvisers to the Company and other individuals as to 4,400,000 New Shares andinvestors arranged through Fiske plc as to 66,970,000 New Shares. The NewShares will rank pari passu in all respects with the existing issued ordinaryshares of the Company. Application has been made for the New Ordinary Shares tobe admitted to trading on AIM and dealings are expected to commence on 19 April2005. Corporate Governance The Board has carefully considered its responsibility for good corporategovernance. However at this point of the development of the Company it hasneither the resource nor the necessity to establish complex formal governanceprocedures. The Board meets on a formal basis at least once per month. At thosemeetings a detailed report from the Finance Director is presented and discussed.The Chief Executive also presents a formal monthly report on the advancement ofgroup operations and in particular the YES! Project. The Board considers riskand strategy at each meeting. An Audit Committee has been established which comprises Stephen Thomson (Chair),Graham Axford and Peter Collins. The Committee has met with the auditors andconsidered the results and the audit process, and has satisfied itself as to theauditor's independence. The Remuneration Committee, comprising St.John Hartnell, Peter Collins andmyself as Chair, has not sat in the period since the last annual report. TheBoard however continues to be remunerated at the rate set out in the AIMAdmission Document issued on 1 December 2003. The Board therefore sees no valueto the shareholders by the inclusion of a formal report of the RemunerationCommittee in this annual report. All directors have service contracts, none ofwhich have a duration of longer than 12 months. We appreciate the support our shareholders have given us and I would also liketo extend my thanks to my colleagues on the Board who, through their support andefforts, have put us in a position to look forward to the future positively. Malcolm Savage 14 April 2005 OAK HOLDINGS PLC CONSOLIDATED PROFIT AND LOSS ACCOUNTfor the year ended 31 October 2004 2004 2003 £ £ £ £ TURNOVER - discontinued activities 102,611 86,167 Cost of sales - normal (98,269) (44,716) - exceptional - 25,020 GROSS PROFIT 4,342 66,471 Operating expenses (729,984) (223,333) OPERATING LOSS (725,642) (156,862) Operating loss comprises:Continuing activities (729,984) -Discontinued 4,342 (156,862) (725,642) (156,862) Interest 23,882 38,154 LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (701,760) (118,708) Taxation RETAINED LOSS FOR THE (701,760) (118,708) FINANCIAL YEAR BASIC LOSS (0.1) (0.1) PER SHARE (IN PENCE) There were no recognised gains or losses other than the result for the year asshown above. The result attributable to continuing activities of the Group relate to theoperations of Oak Ventures Limited, which was acquired during the year, and theestablishment of a newly launched property consultancy business, together withthe Group's administrative expenses. CONSOLIDATED BALANCE SHEET 31 October 2004 2004 2003 £ £ FIXED ASSETS Intangible assets 10,828,446 -Tangible assets 4,150 127,323 10,832,596 127,323 CURRENT ASSETS Stocks 126,708 95,178 Debtors 21,011 7,639 Cash at bank and in hand 194,247 1,234,401 341,966 1,337,218 CREDITORS - amounts falling due within one year (207,960) (89,893) NET CURRENT ASSETS 134,006 1,247,325 TOTAL ASSETS LESS CURRENT LIABILITIES 10,966,602 1,374,648 CREDITORS - amounts falling due after more than one year (180,695) (15,997) 10,785,907 1,358,651CAPITAL AND RESERVES Called up share capital 6,539,483 1,622,718 Share premium 2,792,939 2,778,007 Capital redemption reserve 164,667 164,667 Profit and loss account (3,908,501) (3,206,741) Merger reserve 5,197,319 - SHAREHOLDERS' FUNDS 10,785,907 1,358,651 CONSOLIDATED CASH FLOW STATEMENTfor the year ended 31 October 2004 2004 2003 £ £ £ £ NET CASH OUTFLOW FROM OPERATING ACTIVITIES (706,371) (176,941) RETURNS ON INVESTMENTSAND SERVICING OF FINANCENet interest received (paid) 23,882 38,154 CAPITAL EXPENDITURE ANDFINANCIAL INVESTMENTPayments to acquire tangiblefixed assets (4,620) (1230) Receipts from the sale of tangible fixed assets - 800 Net cash outflow from capitalexpenditure (4,620) (430) ACQUISITIONS Bank overdraft acquired with subsidiary (20,478) - Costs of acquisition (310,509) - (330,987) - CASH OUTFLOW BEFORE FINANCING (1,018,096) (139,217) FINANCING Repayment of loans (25,624) (41,866) Proceeds from issue of shares 3,566 - (22,058) (41,866) DECREASE IN CASH (1,040,154) (181,083) NOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 October 2004 1 ACCOUNTING POLICIES Goodwill Goodwill arising in the year is upon the acquisition of Oak Ventures Limited andis explained further in note 3 below. No amortisation of goodwill is providedas the directors consider that the useful life of the acquired goodwill isclosely associated with the realisation of the major development projectoutlined in note 3. The policy of amortisation will therefore be matched to theuseful life of the project once completed. The directors have, however, carriedout an impairment review as at 31 October 2004 as described in note 3 Other accounting policies are consistent with those applied in the financialstatements for the previous year. Basis of consolidation The consolidated financial statements incorporate the financial statements ofOak Holdings plc and all its subsidiary undertakings made up to 31 October 2004using the acquisition method of consolidation. 2 LOSS ON DISPOSAL OF DISCONTINUED OPERATIONS The loss on disposal of discontinued operations related to the loss on thediscontinuance of the Group's former narrow boat and time-share operations. 3 INTANGIBLE FIXED ASSETS Goodwill £Cost and net book value Additions and as at 31 October 2004 10,828,446 The goodwill arose on the acquisition of Oak Ventures Limited on 1December 2003 by way of issue of 490,313,105 Ordinary shares at a value of 2.06pper share in exchange for the whole of the issued share capital of Oak VenturesLimited. The goodwill arising on the acquisition was attributable primarily tothe fact that Oak Ventures Limited has been granted preferred developer statusby Rotherham Metropolitan Borough Council to develop a major entertainment andleisure complex (the "YES! Project"). Furthermore, the Company is managed by anexperienced board with considerable expertise in delivering major commercialproperty development projects. Once planning permission has been obtained thenthe Preferred Developer Agreement entitles the Company to acquire a 250 yearslease on the development site and on the established Rother Valley Country Park. Since acquisition Oak Ventures Limited has been working on thepreparation of a planning application in co-operation with RotherhamMetropolitan Borough Council. This was submitted on 31 January 2005. Asexplained in the Chairman's Statement, the directors are confident that theyhave presented a strong case for planning consent to be granted. It should, however, be noted that as in any planning application therecan be no certainty that consent will be granted. Furthermore, the land onwhich the YES! Project is to be developed is currently zoned "green belt". Dueto the fact that the land is owned by the Local Authority, the directorsconsider that approval from the Office of the Deputy Prime Minister is required. The directors estimate that the cost of development of the YES!Project is in the region of £270 million. Delivery of the project andconfirmation of the economic value of the acquired goodwill is thereforedependent on the Group being able to raise sufficient development capital or, ifthis is not possible, being able to assign the rights to the project to a thirdparty for in excess of the carrying value of the goodwill. The directorsbelieve that once planning permission has been obtained, then they will be ableto raise the necessary development finance. The directors have carried out an impairment review in respect of thecarrying value of goodwill. On the assumption that planning permission isgranted and development funding will be available, in their opinion noimpairment in the carrying value of goodwill has arisen based on currentlyforecast costs and rental streams estimated from the completed project. Itshould, however, be noted that costs and completed financial value of the YES!Project are subject to variation and these will be kept under review for anyfuture indication of impairment in value. The value of the project is alsodependent upon being able to attract tenants. The Group has entered intoMemoranda of Understanding with three potential 'anchor tenants' but at thisstage there can be no guarantee that these will be converted into firmcommitments. Once the outline planning consent is granted a marketing campaign will beundertaken to secure commitments from major occupiers and until this is achievedthe Group will not proceed with the project. The Company today issued 94,010,810 new Ordinary shares of 1p each ata Placing price of 1.25p per share, giving rise to net proceeds after commissionof £1,132,528. The additional funds are required to provide further working capitalto deal with outstanding planning issues and meet day to day operating expenses.The directors have reviewed current expenditure commitments and consider thatthese funds will provide sufficient working capital to enable the Company tocontinue to pursue the YES! Project, provided no further unforeseen delays inthe planning process arise. As explained above, development finance will berequired to complete the proposed development project and further funds could berequired if there are unforeseen delays in the grant of planning consent. Ifsuch funds were not forthcoming or if the Group was unable to generate asufficient level of consultancy fees from its newly formed consultancy businessto cover its ongoing operating overheads then this could affect the ability ofthe Group to continue as a going concern and hence the appropriateness of thegoing concern basis of accounting. 4 TAXATION No taxation charge arises based on the loss for the year. 5 LOSS PER SHARE Basic loss per ordinary share of 0.1 pence (2002: 0.5 pence) is calculated usingthe net basis on the Group loss for the year after tax of £118,708 (2002:£739,115) and on the weighted average number of shares in issue of 162,271,750(2002: 162,271,750). 2004 2003 Pence PenceBasic Loss per share (0.1) (0.1) 6 PUBLICATION OF NON-STATUTORY ACCOUNTS The financial information set out in this preliminary announcementdoes not constitute statutory accounts as defined in section 240 of theCompanies Act 1985. The consolidated balance sheet as at 31 October 2004 and the consolidated profitand loss account, consolidated cash flow statement and associated notes for theyear have been extracted from the group's financial statements. Those financialstatements have not yet been delivered to the Registrar of Companies, nor havethe auditors reported on them. The 2003 accounts have been delivered to theRegistrar of Companies and the auditors reported on them, their report wasunqualified and did not contain a statement under section 237(2) or (3) of theCompanies Act 1985. 7 Copies of the accounts will be sent round to shareholders shortly andwill also be available at the Company's registered office, 15 Half Moon Street,London W1J 7AT. Appendix 1 DIRECTORS' INTEREST IN PLACING OF NEW ORDINARY SHARES New Shares subscribed Resultant holding % Malcolm Savage 4,258,244 72,590,915 10.27Stephen Lewis 4,258,244 46,113,985 6.73Michael Hill 946,652 3,446,652 0.46Graham Axford 2,695,050 17,257,362 2.31Peter Collins 4,258,244 72,590,915 10.27St John Hartnell 4,258,244 72,590,915 10.27Stephen Thomson 322,375 5,817,954 0.78 CONCERT PARTY HOLDINGS FOLLOWING PLACING OF NEW ORDINARY SHARES The Concert Party, as defined in the circular to Shareholders dated 7 November2003, following the placing described in this document, is interested in509,037,375 Ordinary Shares representing approximately 68.05% of the issuedshare capital of the Company. This information is provided by RNS The company news service from the London Stock Exchange