27 Jul 2007 07:00
INTERIM RESULTS 2007 Oak Holdings plc ("Oak" or the "Company"), the AIM listed property developmentand consultancy group that is developing the ‚£350million YES! Project, a1.2million sq ft covered fully integrated mixed-use leisure and conferencescheme on a 327-acre site in South Yorkshire, announces its unaudited interimresults 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 2000Tom Griffiths CHAIRMAN'S STATEMENT As I reported at the Annual General Meeting in May of this year, the Companycontinues to make significant progress in respect of the YES! Project in SouthYorkshire. In January, we were able to announce that Outline Planning Consenthad been granted and the associated Section 106 Agreement signed; a majorhurdle 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 andthe more general running costs of the Company. As previously stated, YES! costsare not capitalised. The reduced loss is even more creditable as it includes afirst time charge in respect of FRS20, Accounting for Share Options, of ‚£33,000(2006: nil).Current TradingThe YES! Project
Following on from the Outline Planning permission and Section 106 Agreementachieved in January of this year, the Company acquired the strategicallyimportant freehold of 27 acres of land between the development site and the A57which secured access to the development site. The total consideration for thisacquisition was ‚£1 million with ‚£250,000 paid on acquisition and the balancepayable in March 2008. This acquisition demonstrates our determination toensure that this important regional project goes ahead for the benefit of OakHoldings plc and its shareholders and gives the Company ownership of criticalacreage.
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 AnnualGeneral Meeting earlier in the year will improve the market's overallperception of the Company and make it more attractive to long term investors.The directors are also confident that the current inherent value in theCompany, and particularly its YES! Project, is not reflected in its marketcapitalisation. Accordingly, the Board has recently commissioned independentproperty 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 willonly conclude such review when satisfied that a particular source is in thebest interests of the Company and its shareholders as a whole. The Directorsenvisage that such funding will encompass the immediate requirements of theYES! Project as well as the Company's day-to-day working capital needs. TheDirectors are confident of being in a position to be able to make anannouncement on this matter in the near future.I also wish to demonstrate the Directors' confidence in the Company's future byreferring to two matters. First, two directors, namely Stephen Lewis and GrahamAxford, have provided guarantees in respect of the bank loan of ‚£250,000utilised by the Company to purchase the YES! Project access land, referred toabove. Secondly, each of the Directors has contributed towards the short termworking capital needs of the Company, by providing loans to the Company,pending resolution of the exploration of funding opportunities referred to inthe preceding paragraph. These loans, totalling ‚£25,000, have been provided onreasonable commercial terms and will be repayable out of the proceeds of anyequity 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 shareholdersfor their continued support.Malcolm SavageChairman 27 July 2007Profit and loss accountFor 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 beforetaxation (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 SheetAs 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 10,828,446Tangible assets - land 250,000 - -Investments - 2,759 - ---------- ---------- ---------- 11,078,446 10,831,205 10,828,446 ---------- ---------- ----------Current Assets Debtors 112,797 19,432 27,149Cash 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 7,480,886Share premium account 2,987,642 2,987,146 2,987,146Capital redemption reserve 164,667 164,667 164,667Profit and loss account (5,639,093) (5,205,523) (5,521,598)Merger reserve 5,197,319 5,197,319 5,197,319Other reserve 33,000 - - ---------- ---------- ---------- Equity: shareholders' funds 10,224,780 10,624,495 10,308,420 ========== ========== ==========Cash Flow StatementFor 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 financeNet 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
OAK HOLDINGS PLC