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PRESS RELEASE
[ CURRENT FLIGHT STATUS ]
FULL ANNUAL REPORT AND FINANCIAL STATEMENTS FOR YEAR ENDED 31st OCTOBER 2004
Chairman's Statement
This has been a good year for Oak Holdings during which the foundations have been laid towards the creation of a major development company focused on the leisure and entertainment sector and a successful property consultancy.
Results
I am pleased to report the results for the 12 months to 31 October 2004. In line with your Board's expectations, the Company made an operating loss before exceptional items of £725,642 (2003: £156,862). The Company continues to exercise prudent cost control; the major proportion of costs in the 12 months was incurred in advancing the YES! Project, which the Board believes will generate substantial returns in the future. In view of this loss no dividend is recommended (2003: nil).
As at 31 October 2004 the Group had net assets of £10.78 million, the major component 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 t he Directors fulfilling their strategy of identifying a suitable reverse takeover acquisition, which was approved by shareholders at an Extraordinary General Meeting, held on 1 December 2003. Since that time, t he strategic focus has been to progress the development of the YES! Project, a major covered mixed-use leisure scheme in South Yorkshire, and to begin building a property consultancy operation.
The YES! (‘Yorkshire Entertainment Sensation') Project is located on a 327 acre ex-coalfield site adjoining the Rother Valley Country Park in Rotherham. Following the Company's success in the OJEC competition process and the award of a Preferred Developer Agreement by Rotherham Metropolitan Borough Council, an outline planning application was submitted on 31 January 2005 for a state-of-the-art leisure and entertainment centre.
The scheme comprises two hotels, two theatres, an extreme sports facility, a golf driving range, entertainment centre, live TV studio, health and fitness spa together with a wide range of restaurants, cafés and bars. The Preferred Developer Agreement envisages the grant of a 250 year lease of the development site and a similar interest in the adjoining Country Park.
Whilst we continue to negotiate with a number of companies which have expressed interest in the project, including leading international hotel operators, the Company has already entered into Memoranda of Understanding with the following three 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 project will bring together with the inward investment which will be attracted to the area. Whilst there is obviously some risk in the planning process considerable time and effort has been put into researching the market, canvassing local opinion and taking political soundings. The feedback received has led the Company to believe that consent will be secured around the end of the calendar year for a major leisure and entertainment scheme on this site. It is anticipated that the development will be completed in early 2009.
The Group is establishing a reputation in the leisure field and a number of other potential projects have been assessed during the year. We will continue to evaluate opportunities in order to identify projects which have the potential to make good returns for our shareholders.
Using the professional skills and experience available within the Company, we are also able to offer a complete property advisory service to the owners of commercial real estate. Marketed as a ‘bolt-on property company', it enables owners to secure holistic guidance concerning their real estate investment strategy from a single source. The prospects for an increasing revenue stream and possible equity participation from this aspect of the business look promising. Current Trading
The planning submission period for the YES! Project has been longer than the Board originally envisaged due to the complexity of the scheme and need to put time and effort into research and local lobbying to ensure the best possible reception for the proposal. Following advice, new architects were appointed and full traffic and environmental assessments undertaken. In addition, the analysis of other development opportunities and preparatory work on the consultancy side of the business has required modest investment of time and money which should deliver 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 month period. Since the year end the cash outflow has continued on a controlled basis and in line with our projections. As explained earlier in my statement, for good reasons the date of the planning decision will be later than previously envisaged and the Company requires additional funding to take it through to that date. Accordingly the Company has sought the necessary further funding and I am pleased to announce a successful share placing raising £1.1 million net of expenses through the issue of 94,010,810 new ordinary shares of 1p at 1.25p per share.
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, certain advisers to the Company and other individuals as to 4,400,000 New Shares and investors arranged through Fiske plc as to 66,970,000 New Shares. The New Shares will rank pari passu in all respects with the existing issued ordinary shares of the Company. Application has been made for the New Ordinary Shares to be admitted to trading on AIM and dealings are expected to commence on 19 April 2005.
Corporate Governance
The Board has carefully considered its responsibility for good corporate governance. However at this point of the development of the Company it has neither the resource nor the necessity to establish complex formal governance procedures. The Board meets on a formal basis at least once per month. At those meetings a detailed report from the Finance Director is presented and discussed. The Chief Executive also presents a formal monthly report on the advancement of group operations and in particular the YES! Project. The Board considers risk and 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 and considered the results and the audit process, and has satisfied itself as to the auditor's independence.
The Remuneration Committee, comprising St.John Hartnell, Peter Collins and myself as Chair, has not sat in the period since the last annual report. The Board however continues to be remunerated at the rate set out in the AIM Admission Document issued on 1 December 2003. The Board therefore sees no value to the shareholders by the inclusion of a formal report of the Remuneration Committee in this annual report. All directors have service contracts, none of which have a duration of longer than 12 months.
We appreciate the support our shareholders have given us and I would also like to extend my thanks to my colleagues on the Board who, through their support and efforts, have put us in a position to look forward to the future positively.
Malcolm Savage
14 April 2005
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Annual Report and Financial Statements for year ended October 2004 here |
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