RNS Number : 1423A
Oak Holdings PLC
30 July 2008
Oak Holdings plc ("Oak" or the "Company"), the AIM listed property development and consultancy group that is developing the £390million
YES! Project, a 1.2million sq ft covered fully integrated mixed-use leisure and entertainment based resort, activity and conference
destination on a 327-acre site in South Yorkshire, announces its unaudited interim results for the six months ended 30 April 2008.
Chairman's Statement
I am once again pleased to be able to report that the Company continues to make progress in respect of its YES! Project in South
Yorkshire. The £390 million project in South Yorkshire will be an entertainment-based resort, activity and convention destination that we
believe will set new standards for leisure activity in the UK and, as such, remains at the core of the Company's business strategy.
In February of this year, we announced that Heads of Terms for a Development Agreement and a 250 year lease had been agreed with
Rotherham Metropolitan Borough Council, the owners of the land. We are now, after detailed drafting of terms, able to anticipate the signing
of the Development Agreement within a matter of days. This significant achievement will allow us to progress the next phases of the
development process.
Results
The Company's results for the 6 months ended 30 April 2008 were a loss on ordinary activities before taxation of £360,191 (2007:
£117,495), on a decreased turnover of £25,073 (2007: £350,500). The results are in line with the Board's expectations. Consultancy turnover
was limited by the concentration of resources on the YES! Project.
The Company continues to exercise tight control over expenditures. YES! costs are not capitalised and the result includes a charge of
£94,300 (2007: £33,000) in respect of 'Share Based Payments as determined by IFRS 2.
Net assets at 30 April 2008 were £9.8M (2007: £10.2M).
Current Strategy and Activity
We are sure that the YES! Project represents an exceptional opportunity to provide shareholder value and we will continue to concentrate
the majority of our resources in this area.
The Development Agreement, including the terms of the 250 year lease, is scheduled to be considered by the Cabinet of Rotherham Borough
Council on 30 July 2008, following extensive negotiations between the parties and their advisers.
Within the Group's net assets, a value of £10.5M is attributed to the YES! Project Preferred Developer Agreement held by Oak Ventures
Limited following its acquisition by the Group in 2003. The Board have previously stated that upon securing of a Development Agreement, the
value attributed to the project would be higher than £10.5M. As such, in anticipation of the completion of the Development Agreement, the
Board have commissioned a formal valuation of the Group's interest, both in the YES! Project and the 27 acres of freehold access land
purchased in March 2007, and expect to confirm a substantially higher valuation than that currently carried in the Group's accounts. This
valuation is expected shortly.
Funding
As reported at the Annual General Meeting in May of this year, the Directors continue to consider sources of funding for the Company;
such funding will encompass the immediate requirements of the YES! Project and take the project through to a development loan, but will also
include the Company's day-to-day working capital needs.
Following discussions with lending bankers, the Directors continue to consider that, subject to normal lending criteria, a development
loan to progress the YES! Project to completion will be available.
Outlook
Despite the current economic climate, the Board remains confident that the Company can approach the future with confidence. We believe
that the fundamental concept of the YES! Project will be attractive to property investors and, as such, the Board will primarily devote its
energies and resources to ensuring the successful completion of the project.
Finally, as always, I would like to thank my colleagues and our shareholders for their continued support.
Malcolm Savage
Chairman
30 July 2008
Unaudited consolidated income statement
For the Six Months Ended 30 April 2008
Unaudited Unaudited
6 months 6 months Audited
ended ended Year
30 April 30 April ended
2008 2007 31
£ £ October
2007
£
Notes
REVENUE 25,073 350,500 350,713
Cost of Sales - - -
GROSS PROFIT 25,073 350,500 350,713
Administrative expenses (372,010) (466,836) (800,767)
OPERATING LOSS (346,937) (116,336) (450,054)
Finance costs (13,254) (1,159) (13,588)
LOSS BEFORE TAX (360,191) (117,495) (463,642)
Tax - - -
LOSS FOR THE PERIOD ATTRIBUTABLE (360,191) (117,495) (463,642)
TO EQUITY HOLDERS OF THE PARENT
LOSS PER SHARE
Basic loss per share 4 (2.4)p (0.8)p (3.1)p
There are no items of recognised income and expense other than those reflected in the consolidated income statement.
Unaudited Consolidated Balance Sheet
AS AT 30 APRIL 2008
Unaudited Unaudited Audited
As at As at As at
30 April 30 April 31 October
2008 2007 2007
£ £ £
Notes
NON-CURRENT ASSETS
Goodwill 10,828,446 10,828,446 10,828,446
Property 1,074,825 250,000 1,074,825
11,903,271 11,078,446 11,903,271
CURRENT ASSETS
Trade and other receivables 4,175 112,797 4,175
Cash and cash equivalents 35,934 15,613 63,347
40,109 128,410 67,522
TOTAL ASSETS 11,943,380 11,206,856 11,970,793
CURRENT LIABILITIES
Trade and other payables 1,596,415 419,463 1,356,488
Current tax liabilities 95,354 131,918 96,803
Bank loan 250,000 250,000 250,000
1,941,769 801,381 1,703,291
NON-CURRENT LIABILITIES
Trade and other payables 180,695 180,695 180,695
TOTAL LIABILITIES 2,122,464 982,076 1,883,986
NET ASSETS 9,820,916 10,224,780 10,086,807
EQUITY
Called up share capital 7,565,067 7,481,245 7,565,067
Share premium account 3,017,818 2,987,642 3,017,818
Merger reserve 5,197,319 5,197,319 5,197,319
Other reserves 164,667 164,667 164,667
Retained earnings 5 (6,123,955) (5,606,093) (5,858,064)
TOTAL EQUITY 9,820,916 10,224,780 10,086,807
Unaudited Consolidated Cash Flow Statement
For the Six Months Ended 30 April 2008
Notes 6 months 6 months
ended ended
30 April 30 April
2008 2007 Year ended
£ £ 31 October
2007
£
(unaudited) (unaudited) (audited)
Net cash flow from operating (27,722) (30,709) (30,886)
activities 6
aact9i activitiesactivities
Investing activities
Interest received 309 398 536
Capital expenditure on - (250,000) (316,225)
property
Net cash from/(used in) 309 (249,602) (315,689)
investing activities
Financing activities
Proceeds on issue of shares - 855 114,853
Net proceeds from loans - 250,000 250,000
advanced
Net cash from financing 250,855 364,853
activities -
Net (decrease)/increase in
cash and cash equivalents (27,413) (29,456) 18,278
Cash and cash equivalents at 63,347 45,069 45,069
beginning of period
Cash and cash equivalents at 35,934 15,613 63,347
end of period
Notes to the Unaudited Interim Report
1. GENERAL INFORMATION
OAK HOLDINGS PLC (the "Company") is a company domiciled in England whose registered office address is 35 Vine Street, London, EC3N 2AA.
The condensed consolidated interim financial statements of the Company for the six months ended 30 April 2008 comprise the Company and its
subsidiaries (together referred to as "the Group").
The condensed consolidated interim financial statements do not constitute statutory accounts as defined in Section 240 of the Companies
Act 1985.
The financial information for the year ended 31 October 2007 has been extracted from the statutory accounts (which were prepared under
UK GAAP) for that period and adjusted as shown in note 7 below to restate in accordance with International Financial Reporting Standards
("IFRS"). This note includes reconciliations of equity and the loss for comparative periods reported under UK GAAP to those reported for
those periods under IFRS. The auditors' report on the statutory accounts was unqualified and did not contain a statement under Section 237
of the Companies Act 1985. A copy of those financial statements has been filed with the Registrar of Companies.
The Group's date of transition to IFRS was 1 November 2006 and condensed consolidated interim financial statements have been prepared in
accordance with the first time adoption provisions set out in IFRS 1 First-time Adoption of International Financial Reporting Standards. The
condensed consolidated interim financial statements do not include all of the information required for full annual financial statements.
The condensed consolidated interim financial statements were authorised for issue on 30 July 2008.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting
The condensed consolidated financial statements are unaudited and have been prepared in accordance with IFRS adopted by the EU.
The condensed consolidated financial statements have been prepared on the historical cost basis. The principal accounting policies
adopted are set out below.
Basis of consolidation
The condensed consolidated financial statements incorporate the financial statements of the Company and entities controlled by the
Company (its subsidiaries) made up to 30 April 2008. Control is achieved where the Company has the power to govern the financial and
operating policies of an investee entity so as to obtain benefits from its activities.
The results of subsidiaries acquired during the period are included in the consolidated income statement from the effective date of
acquisition.
Where necessary, adjustments are made to the financial information of subsidiaries to bring the accounting policies used into line with
those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value of the
identifiable assets and liabilities of a subsidiary, at the date of acquisition.
The Group's goodwill is attributable primarily to the fact that, on acquisition, Oak Ventures Limited had been granted preferred
developer status by Rotherham Metropolitan Borough Council ("RMBC") to develop a major entertainment and leisure complex (the "YES!
Project"). Furthermore, the Company was, and continues to be, managed by an experienced board with considerable expertise in delivering
major commercial property development projects.
Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.
Goodwill which is recognised as an asset is reviewed for impairment at least annually. In order to determine the extent of the impairment
loss (if any), the recoverable amount of the goodwill is estimated. Any impairment is recognised immediately in profit or loss.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
An impairment loss recognised for goodwill is not reversed in a subsequent period.
Goodwill arising on acquisitions before 1 November 2006 has been retained at the previous UK GAAP amounts subject to being tested for
impairment at that date.
Property
Depreciation is provided on tangible fixed assets at rates calculated to write off the cost less estimated residual value of tangible
fixed assets over their expected useful lives at the following rates:-
Plant and equipment 33% of cost per annum
Computer equipment 50% of cost per annum
Freehold land is included at its historical cost and is not depreciated.
Impairment of tangible assets
At each balance sheet date, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication
that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to
its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately, unless
the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Income recognition
Turnover represents the fair value of services provided during the period.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial assets to that assets net
carrying amount.
Deferred taxation
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. However, the deferred tax is not accounted for if it arises
from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates (and laws) that have been enacted or
substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred
tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against with the
temporary differences can be utilised.
Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the
reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not reverse in the
foreseeable future.
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to
the lessee. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the
minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance
sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income, unless
they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group's general policy on
borrowing costs (see below).
Rentals payable under operating leases are charged to income on a straight line basis over the term of the relevant lease.
Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight line basis over the
lease term.
Financial instruments
Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual
provisions of the instrument.
Trade and other receivables
Trade and other receivables are measured at initial recognition at fair value. Appropriate allowances for estimated irrecoverable
amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured
as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the effective
interest rate computed at initial recognition.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term, highly liquid investments that are readily
convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An
equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
Trade and other payables
Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective
interest rate method.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Share based awards
The Group has applied the requirements of IFRS 2 Share-based Payment. In accordance with the transitional provisions, IFRS 2 has been
applied to all grants of equity instruments after 7 November 2002 that were unvested at 1 November 2006.
The Group issues equity settled share based payments to certain employees. Equity settled share based payments are measured at fair
value (excluding the effect of non-market based vesting conditions) at the date of grant. The fair value determined at the grant date of the
equity settled share based payments is expensed on a straight line basis over the vesting period, based on the Group's estimate of shares
that will eventually vest and adjusted for the effect of non-market based vesting conditions.
Upon exercise of share options, the proceeds received net of attributable transaction costs are credited to share capital and, where
appropriate, share premium. No adjustment is made to any expense recognised in prior periods if share options that have vested are not
exercised.
Fair value is measured by use of the Black-Scholes model. The expected life used in the model has been adjusted, based on management's
best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
3. Segmental Analysis
Segment information is presented in respect of the Group's business segments. The primary format, business segments, is based on the
Group's management and internal reporting structures. The Group has two principal activities (segments) :
i) the development of a property known as the YES! Project in South Yorkshire and associated properties; and
ii) property consultancy services
Unallocated items comprise mainly corporate overheads and financing related items.
Six months ended
31 March 2008
Consultancy YES! Project Unallocated Total
£ £ £ £
Revenue 25,073 - - 25,073
Operating profit/(loss) 12,259 (83,892) (275,304) (346,937)
Finance costs (13,254)
Loss before taxation (360,191)
Taxation -
Loss for the period (360,191)
4. Loss per share
The calculation of the basic earnings per share is based on the following data:
6 months ended 6 months ended Year ended
30 April 30 April 31 October
2008 2007 2007
(unaudited) (unaudited) (audited)
£ £ £
Loss on ordinary activities after 360,191 117,495 463,642
tax
Number of shares
Weighted average number of 15,130,133 14,962,336 14,976,400
ordinary shares for the period
At the Company's Annual General Meeting on 24 May 2007, it was resolved that the ordinary shares of 1p each be consolidated into 50p
shares on the basis of 50 ordinary shares of 1p becoming a 50p share. The weighted average number of ordinary shares at 30 April 2007 has
been restated to reflect this consolidation resolution
5. Changes in equity and debt
Changes in equity
The only movement in Equity during the period related to movements in retained earnings
Changes in debt
There were no changes in debt during the period.
6. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
Net cash flow from operating 6 months ended 6 months ended Year ended
activities
30 April 2008 30 April 2007 31 October 2007
(unaudited) (unaudited) (audited)
£ £ £
Operating loss (346,937) (116,336) (450,054)
Share-based payment 94,300 33,000 127,176
Operating cash flows before (252,637) (83,336) (322,878)
movements in working capital
(Increase) / decrease in - (85,648) 22,974
receivables
Increase in payables 233,979 139,832 278,451
Cash absorbed by operations (18,658) (29,152) (21,453)
Interest paid (9,064) (1,557) (9,433)
Net cash flow from operating (27,722) (30,709) (30,886)
activities
7. EXPLANATION OF TRANSITION TO IFRS
As stated in note 1, these are the Group's first condensed consolidated interim financial statements for part of the period covered by
the first IFRS annual consolidated financial statements prepared in accordance with IFRS.
The accounting policies in note 2 have been applied in preparing the consolidated condensed interim financial statements for the six
months ended 30 April 2008, the financial information for the six months ended 30 April 2007 and the year ended 31 October 2007.
In preparing its opening IFRS balance sheet, comparative information for the six months ended 30 April 2007, and financial statements
for the year ended 31 October 2007, the Group has considered the impact of IFRS and whether any adjustments are required on transition and
concluded that none are required.
8. AIM COMPLIANCE COMMITTEE
In accordance with AIM Rule 31 the Company is required to have in place sufficient procedures, resources and controls to enable its
compliance with the AIM Rules; seek advice from its nominated adviser ("Nomad") regarding its compliance with the AIM Rules whenever
appropriate and take that advice into account; provide the Company's Nomad with any information it requests in order for the Nomad to carry
out its responsibilities under the AIM Rules for Companies and AIM Rules for Nominated Advisers; ensure that each of the Company's directors
accepts full responsibility, collectively and individually, for compliance with the AIM Rules; and ensure that each director discloses
without delay all information which the Company needs in order to comply with AIM Rule 17 (Disclosure of Miscellaneous Information) insofar
as that information is known to the director or could with reasonable diligence be ascertained by the director.
In order to ensure that these obligations are being discharged, the Board has established a committee of the Board (the "AIM
Committee"), chaired by Graham Axford, a non-executive director of the Company.
Having reviewed relevant Board papers, and discussed with the Company's Executive Board and the Nomad to ensure that such is the case,
the AIM Committee is satisfied that the Company's obligations under AIM Rule 31 have been satisfied during the period under review.
9 DISTRIBUTION OF INTERIM REPORT
Copies of the Interim Report for the six months ended 30 April 2008 can be obtained from the Registered Office during normal business
hours and are available on the Company's website, www.oakholdings.co.uk.
Contact details:
Oak Holdings plc Tel: 020 7493 5522
Stephen Lewis, Chief Executive Officer
Michael Hill, Finance Director
Arbuthnot Securities Limited Tel: 020 7012 2000
Tom Griffiths
This information is provided by RNS
The company news service from the London Stock Exchange
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