TIDMOAH
RNS Number : 6635F
Oak Holdings PLC
28 April 2011
28 April 2011
Oak Holdings plc
Preliminary announcement of results for the year ended 31
October 2010
Oak Holdings plc announces its results for the year ended 31
October 2010.
The key features of the year were:
-- Turnover GBP1.26m (2009: GBP0.76m)
-- Loss before tax GBP11.48m (2009: profit GBP0.33m)
-- GBP10.83m goodwill impairment provision charged following the
termination of the development agreement for the YES! Project in
January 2011 as well as significant other costs associated with the
YES! Project
-- Substantial overhead reductions achieved since year end
-- Discussions for funding with third party continue
positively
-- This funding is necessary to the business and its growth
-- Prospects for developing profitable leisure operations in the
future
The Company's annual report and financial statements are being
posted to shareholders and will be available on the Company's
website shortly
Commenting on the results, Mike Woodcock, Chairman of the
Company, said:
"This is not the report I imagined writing when I became
chairman in the middle of 2010. The Yes! Project seems over
although we continue to strive to achieve value from it and the
adjacent freehold land we own. We are now focusing on developing a
successful leisure business and are determined to achieve value for
shareholders".
Enquiries
Oak Holdings plc
Mike Woodcock
Chairman
Tel: 020 7493 5522
Nominated Adviser to Oak Holdings plc
Cairn Financial Advisers LLP
Tony Rawlinson
Tel: 020 7148 7900
Chairman's statement
This is my first annual report as Chairman and covers a year in
which there was, particularly regarding the YES! Project, much
optimism followed by a period during which much of that optimism
has dissipated. Your board is now working hard at re-establishing
value for shareholders from the Group's assets and leisure
businesses.
Termination of the development agreement
I will therefore, first deal with the significant event since
the end of the period - the termination by Rotherham Metropolitan
Borough Council ("RMBC") of the development agreement with your
Company as this is the main influence on the results for the year.
During 2010, the Company applied for, and was granted, a new
planning permission for the YES! Project which would enable the
project to be built on a phased basis. Planning approval was
finally received in September 2010. It was in the autumn when we
were in a position to start to formalise funding or involve a joint
venture partner to implement the development. We also entered into
constructive discussions with RMBC to extend the development
agreement for a term to match the new consent.
With the delays, it had been impossible to formalise funding or
to secure binding pre-lets with key tenants and, we understand,
RMBC took this delay in securing formal agreements as a material
lack of progress and, despite a joint presentation to RMBC with a
credible joint venture partner, RMBC decided to exercise their
right to give notice of termination of the development agreement
with effect from 31 January 2011.
Your board sought and has since sought to revive value from the
many years of hard work and expenditure which your Company has put
into the YES! Project but to no avail. We continue to seek to
revive value but have formed the view that for the time being it
would not be prudent to ascribe any value to the consent or our
involvement.
Results for the year
The results for Group for the year show a loss before taxation
of GBP11,482,060 compared with a profit for the previous year of
GBP325,818. GBP10,828,446 of this loss is attributable to an
impairment provision against the goodwill previously carried in the
balance sheet which related to the original acquisition of the
project by the Group. A further sum of over GBP250,000 was spent on
the Project during the year and this again has been written
off.
The leisure division comprising the Rother Valley Country Park,
Ringwood Town & Country Experience and Oak Heritage generated a
small loss before a management charge from Oak Holdings compared
with a profit in the previous year which included trading only
during the busier summer months. The major contributor to this was
Ringwood Town & Country Experience caused principally by the
delay in Oak's investment in this business.
The balance of the trading loss was a central overhead which was
designed to accommodate both a developing leisure business and a
major property development which was about to start. The Company's
property consultancy business was essentially a breakeven operation
during the year but did defray some of the central overheads which
would otherwise have been charged. Since the year end, there has
been a substantial reduction in the overhead to eliminate costs
supporting the Group's property development activity.
At the year end the Company had negligible cash and nearly GBP2
million of creditors. Active discussions are underway with
creditors with a view to securing the Group's position in
association with the potential new investment referred to
below.
Strategy and business review
The Group now has four revenue generating activities - the
Country Park, the Ringwood memorabilia business, the historic motor
vehicle refurbishment business and the property consultancy. It
also has a number of valuable assets including the A57 freehold
land which was to provide access to the YES! Project and the
memorabilia at Ringwood.
The board has decided to focus on the leisure based activities
and is therefore going to wind down its property consultancy
activities.
We have some exciting potential developments to implement on the
Country Park to add to the watersports, miniature railway, play
areas, cafe activities which already exist. We will seek to begin
to implement these as funding is available. In the meantime, we
have maintained a tight grip on overheads at the Country Park and
trading through the traditionally quiet months of November to March
has produced a very small trading loss which we anticipate will be
reversed by April's trading with the much more active summer months
to come.
At Ringwood's memorabilia museum and restaurant/banqueting
facilities on the edge of the New Forest, we are making some
progress at reinvigorating the operation which has been neglected
and underfunded in the last year. Trading so far this year (again
in the quiet season) has been disappointing, but we are optimistic
that a regular source of visitors is being established which should
enable this operation to become profitable. We continue to examine
opportunities to realise value from the memorabilia where the
market is suitable.
The historic motor vehicle refurbishment business is making
great headway in creating original Hispano Suiza vehicles for sale
into a market which is small but seems to be attractive. Two
vehicles are currently being restored and it is anticipated that
one will be ready for sale later this year and the other ready
around the end of 2011. This business has further spare parts and
anticipates being able to restore further original vehicles
thereafter.
In terms of the Group's valuable assets, the future of the A57
land's value is linked to the progress that RMBC make in achieving
development on the YES! Project site and the board are seeking to
capitalise on its value at the appropriate time. The Group's
memorabilia at Ringwood can either be used for the museum (which
can only display a part of the collection at any time) or can be
realised and the board continue to have regard to opportunities to
realise some of the stock if and when advantageous opportunities
arise.
Funding
Oak is in active discussions with a third party for a
significant equity or equity related investment and hopes to be
able to announce further details of this in the coming weeks. This
funding and the bank funding (which can only be obtained once that
is in place) are critical to the board's plans for the development
of the business.
Outlook
During the first months of 2011, the Group's cost base has been
substantially reduced and the overheads have been cut to match the
scale of the Group's operations more closely. The board is also
focusing on achieving higher revenues from its leisure activities
on a cost effective basis. With the further investment the Group is
seeking, the board believes that a profitable future for the Group
can be achieved.
M C Woodcock
Chairman
Note 2010 2009
GBP GBP
Revenue 1,260,851 761,784
Administrative expenses (1,958,539) (845,334)
Impairment of goodwill (10,828,446) -
Release of liabilities 49,933 410,086
------------- ----------
Operating (loss)/profit (11,476,201) 326,536
Finance income 10 14
Finance costs (5,869) (732)
Finance costs - net (5,859) (718)
------------- ----------
(Loss)/profit before taxation (11,482,060) 325,818
Tax expense - -
(Loss)/profit for the period
attributable to equity holders
of the Company (11,482,060) 325,818
============= ==========
(Loss)/earnings per share
Equity holders 5 (27.2)p 2.2p
All activities are continuing.
Capital
Share Share Retained redemption Merger
capital premium earnings reserve reserve Total
GBP GBP GBP GBP GBP GBP
Group
Balance at
1 November
2008 7,565,067 3,017,818 (6,462,857) 164,667 5,197,319 9,482,014
Profit for
the year
ended 31
October
2009 - - 325,818 - - 325,818
Cost of
share
based
awards - - 35,063 - - 35,063
--------- --------- ------------ ---------- ----------- ------------
At 31
October
2009 7,565,067 3,017,818 (6,101,976) 164,667 5,197,319 9,842,895
Loss for
the year
ended 31
October
2010 - - (11,482,060) - - (11,482,060)
Issue of
shares 2,022,036 2,022,036
Cost of
share
based
awards - - 43,106 - - 43,106
Transfer of
merger
reserve on
write down
of
associated
goodwill - - 5,197,319 - (5,197,319) -
At 31
October
2010 9,587,103 3,017,818 (12,343,611) 164,667 - 425,977
========= ========= ============ ========== =========== ============
Capital
Share Share Retained redemption Merger
capital premium earnings reserve reserve Total
GBP GBP GBP GBP GBP GBP
Company
Balance at
1 November
2008 7,565,067 3,017,818 (4,659,728) 164,667 5,197,319 11,285,143
Profit for
the year
ended 31
October
2009 - - 235,368 - - 235,368
Cost of
share
based
awards - - 35,063 - - 35,063
--------- --------- ------------ ---------- ----------- ------------
At 31
October
2009 7,565,067 3,017,818 (4,389,297) 164,667 5,197,319 11,555,574
Loss for
the year
ended 31
October
2010 - - (12,971,657) - - (12,971,657)
Issue of
shares 2,022,036 2,022,036
Cost of
share
based
awards - - 43,106 - - 43,106
Transfer of
merger
reserve on
write down
of
associated
investment - - 5,197,319 - (5,197,319) -
------------
At 31
October
2010 9,587,103 3,017,818 (12,120,529) 164,667 - 649,059
========= ========= ============ ========== =========== ============
Group Company
Note 2010 2009 2010 2009
GBP GBP
Non-current assets
Goodwill 6 - 10,828,446 - -
Property, plant and
equipment 1,687,608 1,409,417 1,321,040 1,279,071
Investments in
subsidiaries 7 - - 203 10,436,059
Total non-current
assets 1,687,608 12,237,863 1,321,243 11,715,130
------------ ------------- ------------ -------------
Current assets
Inventories 8 579,783 56,230 15,000 -
Trade and other
receivables 81,498 131,305 835,847 2,254,265
Cash at bank 1,645 32,050 52 -
Total current assets 662,926 219,585 850,899 2,254,265
------------ ------------- ------------ -------------
Total assets 2,350,534 12,457,448 2,172,142 13,969,395
============ ============= ============ =============
Equity
Issued share capital 9,587,103 7,565,067 9,587,103 7,565,067
Share premium 3,017,818 3,017,818 3,017,818 3,017,818
Retained earnings (12,343,611) (6,101,976) (12,120,529) (4,389,297)
Capital Redemption
Reserve 164,667 164,667 164,667 164,667
Merger Reserve - 5,197,319 - 5,197,319
Total equity 425,977 9,842,895 649,059 11,555,574
------------ ------------- ------------ -------------
Liabilities
Non-current
liabilities
Borrowings 9 18,237 534,267 - 503,212
Total non-current
liabilities 18,237 534,267 - 503,212
------------ ------------- ------------ -------------
Current liabilities
Borrowings 9 1,038,871 1,011,103 1,003,667 1,001,935
Trade and other
payables 867,449 1,069,183 519,416 908,674
Total current
liabilities 1,906,320 2,080,286 1,523,083 1,910,609
------------ ------------- ------------ -------------
Total liabilities 1,924,557 2,614,553 1,523,083 2,413,821
------------ ------------- ------------ -------------
Total equity and
liabilities 2,350,534 12,457,448 2,172,142 13,969,395
============ ============= ============ =============
These financial statements were approved and authorised for issue
by the board of directors on 28 April 2011 and were signed on its
behalf by:
C J Yates
Director
Group Company
Note 2010 2009 2010 2009
GBP GBP GBP GBP
Cash flows from operating
activities
Net cash absorbed by
operations 10 (439,417) (312,221) (608,728) (437,126)
Net interest paid (5,859) (718) (718) (731)
Net cash absorbed by operating
activities (445,276) (312,939) (609,446) (437,857)
--------- --------- --------- ---------
Cash flows from investing
activities
Payments to acquire tangible
fixed assets (45,157) (105,618) (41,969) -
Cash consideration for
acquisitions (85,000) - (200) -
Net cash used in investing
activities (130,157) (105,618) (42,169) -
--------- --------- --------- ---------
Cash flows from financing
activities
Net advances on directors'
and other loans 98,600 446,712 98,600 433,212
Cash from subscriptions for
new shares 650,000 - 650,000
Net proceeds from advance
of bank loan - 251,935 251,935
Repayment of bank loans (105,935) - -
Repayment of vendor mortgage
loan (100,000) - (100,000) -
Repayments of obligations
under hire purchase contracts (14,054) (750) - -
Net cash from financing
activities 528,610 697,897 648,600 685,147
--------- --------- --------- ---------
Net increase/(decrease) in cash
and bank balances (46,823) 279,340 (3,015) 247,290
Cash and bank and bank overdrafts
at beginning of year 32,050 (247,290) - (247,290)
Cash and bank and bank overdrafts
at end of year (14,773) 32,050 (3,015) -
--------- --------- --------- ---------
1 GENERAL INFORMATION
Oak Holdings plc ("the Company") and its subsidiaries
(together "the Group") were during the year property
developers and consultants and the operators of leisure
activities.
This preliminary announcement is authorised for issue
by the Board on 28 April 2011. The financial information
has been prepared in accordance with International
Financial Reporting Standards adopted by the European
Union and applying the same accounting policies and
bases of calculation and estimation as applied in
previous annual financial statements.
2 SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting
The consolidated financial statements have been prepared
under the historical cost convention and in accordance
with applicable International Financial Reporting
Standards (IFRS) as adopted by the European Union.
As permitted by section 408 of the Companies Act 2006,
the Company has elected not to present its own profit
and loss account for the year. Oak Holdings Plc reported
a loss for the financial year of GBP12,971,657 (2009:
profit of GBP235,368).
Basis of consolidation
The consolidated financial statements incorporate
the financial statements of the Company and entities
controlled by the Company (its subsidiaries) made
up to 31 October 2010. 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 year
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.
Business combinations
The acquisition of subsidiaries is accounted for using
the purchase method. The cost of the acquisition is
measured at the aggregate of the fair values, at the
date of exchange, of assets given, liabilities incurred
or assumed, and equity instruments issued by the Group
in exchange for control of the acquiree. The acquiree's
identifiable assets, liabilities and contingent liabilities
that meet the conditions for recognition under IFRS
are recognised at their fair value at the acquisition
date.
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. 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.
Any impairment is recognised immediately in profit
or loss.
For the purpose of impairment testing, goodwill is
allocated to each of the Group's cash generating units
expected to benefit from the synergies of the combination.
Cash generating units to which goodwill has been allocated
are tested for impairment annually, or more frequently
when there is an indication that the unit maybe impaired.
If the recoverable amount of the cash generating unit
is less than the carrying amount of the unit, the
impairment loss is allocated first to reduce the carrying
amount of any goodwill allocated to the unit and then
to the other assets of the unit pro rata on the basis
of the carrying amount of each asset in the unit.
Any impairment loss recognised for goodwill is not
reversed in a subsequent period.
Depreciation
Freehold land is not depreciated and is included at
its historical cost, which includes capitalised borrowing
costs.
Plant and computer equipment and leasehold improvements
are measured at cost less provision for depreciation.
Depreciation is provided on these assets at rates
calculated to write off the cost less estimated residual
value of the assets over their expected useful lives
at the following rates:-
Plant and equipment 25% to 50% of cost per annum
Leasehold improvements Remaining life of the lease
Income recognition
Turnover represents the fair value of services provided
during the year on business service assignments. Turnover
is recognised as the assignment activity progresses
and the right to consideration is earned. Fair value
reflects the amounts expected to be recoverable from
customers and is based on time spent and costs incurred
to date as a percentage of total anticipated contract
costs. Unbilled turnover is included within receivables.
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 asset to that asset's
net carrying amount.
Deferred taxation
Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying amounts
of assets and liabilities in the financial statements
and the corresponding tax bases used in the computation
of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities
are generally recognised for all taxable temporary
differences and deferred tax assets are recognised
to the extent that it is probable that taxable profits
will be available against which deductible temporary
differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises
from the initial recognition of goodwill or from the
initial recognition (other than in a business combination)
of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting
profit.
Deferred tax liabilities are recognised for taxable
temporary differences arising on investments in subsidiaries,
except where the Group is able to control the reversal
of the temporary difference and it is probable that
the temporary difference will not reverse in the foreseeable
future. The carrying amount of deferred tax assets
is reviewed at each balance sheet date and reduced
to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or
part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are
expected to apply in the period when the liability
is settled or the asset is realised. Deferred tax
is charged or credited in the income statement, except
when it relates to items charged or credited directly
to equity, in which case the deferred tax is also
dealt with in equity. Deferred tax assets and liabilities
are offset when there is a legally enforceable right
to set off current tax assets against current tax
liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends
to settle its current tax assets and liabilities on
a net basis.
Share based awards
The Group has applied the requirements of IFRS 2 Share
based payment.
The Group issues equity settled 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.
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.
Inventories
Inventories are stated at the lower of cost and net realisable
value. Cost comprises direct materials and, where applicable,
direct labour costs and those overheads that have been incurred
in bringing the inventories to their present location and
condition. Cost is calculated using the weighted average method.
Net realisable value represents the estimated selling price
less all estimated costs of completion and costs to be incurred
in marketing, selling and distribution.
Investments in subsidiaries
Investments in subsidiaries are stated in the Company's balance
sheet at cost less any attributable impairment losses.
Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time
to get ready for their intended use or sale, are added to
the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss
in the period in which they are incurred.
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 Company and the Group
after deducting all of its liabilities.
Trade and other payables
Trade 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.
3 LIQUIDITY RISK
At the balance sheet date, the Group had limited funds available.
The directors have prepared forecasts for the coming 12 months
and beyond in order to assess future funding requirements.
These forecasts show that the Group is in need of further
funding within the next 12 months, having particular regard
to the seasonality of the Group's trading. The directors are
currently negotiating with a potential investor regarding
a placing of shares in order to provide the necessary funding.
In addition, the Group has a number of creditors, including
H M Revenue & Customs and the vendor of the A57 land, who
are currently in arrears. Negotiations are currently ongoing
with such creditors to agree settlement terms, some of which
may involve a potential conversion into equity.
The directors are reasonably confident that funding will be
secured and liabilities will be successfully negotiated in
order to enable cash flow seasonality to be managed. On this
basis, they have prepared the financial statements on the
going concern basis.
4 SEGMENTAL ANALYSIS
Segmental information with regards to activity of each segment is
presented below. All turnover and profits are generated in, and assets
are located in, the UK.
RESULT 2010 2009
Consulting Yes Project Leisure Consolidated Consulting Yes Project Leisure Consolidated
GBP GBP GBP GBP GBP GBP GBP GBP
Revenue 30,690 - 1,230,161 1,260,851 5,000 - 756,784 761,784
Segment
operating
(loss)/profit - (11,101,411) (133,873) (11,235,284) - 70,150 142,494 212,644
---------- -------------- ----------- ------------ ------------- -----------
Unallocated corporate
costs (290,850) (296,194)
Release of liabilities 49,933 410,086
-------------- --------------
Operating (loss)/profit (11,476,201) 326,536
Net finance
costs (5,859) (718)
-------------- --------------
(Loss)/profit before
tax (11,482,060) 325,818
Tax expense - -
-------------- --------------
(Loss)/profit for
the year (11,482,060) 325,818
============== ==============
BALANCE SHEET
Goodwill - - - - - 10,828,446 - 10,828,446
Other segment
assets 34,002 1,321,092 995,440 2,350,535 5,000 1,298,271 325,731 1,629,002
---------- -------------- ----------- ------------ ------------- -----------
Segment assets 34,002 1,321,092 995,440 2,350,535 5,000 12,126,717 325,731 12,457,448
---------- -------------- ----------- ------------ ------------- -----------
Unallocated corporate
assets - -
-------------- --------------
Consolidated assets 2,350,535 12,457,448
============== ==============
Segment
liabilities (20,124) (960,000) (352,080) (1,332,203) - (1,504,002) (188,032) (1,692,034)
---------- -------------- ----------- ------------ ------------- -----------
Unallocated corporate
liabilities (592,354) (935,489)
-------------- --------------
Consolidated liabilities (1,924,557) (2,627,523)
============== ==============
Unallocated assets include Group cash and VAT balances. Goodwill
and other assets are allocated to the appropriate segment.
Unallocated liabilities include tax balances and trade and other
payables attributable to corporate overhead costs.
5 (LOSS)/EARNINGS PER SHARE
The (loss)/earnings per share is based on a loss for the year
of GBP11,482,060 (2009: profit of GBP325,818) and the weighted
average number of ordinary shares in issue for the year of
42,164,479 (2009: 15,130,133).
The exercise of the outstanding options and warrants at 31
October 2010 would result in the Company issuing shares at
a value in excess of the average market price, and are therefore
not dilutive.
There are potentially 582,856 shares that could be issued
under the terms of options and are also 2,021,791 pursuant
to the exercise of warrants that will potentially reduce future
earnings per share.
6 GOODWILL
Group
GBP
Cost
At 1 November 2008, 1 November
2009 & 31 October 2010 10,828,446
---------------
Provision for impairment
At 1 November 2008 & 1 November
2009 -
Impairment charge (see below) 10,828,446
---------------
At 31 October 2010 10,828,446
===============
Net book value
At 31 October 2010 -
===============
At 31 October 2009 10,828,446
===============
At 31 October 2008 10,828,446
===============
Goodwill arose on the acquisition of Oak Ventures Limited
on 1 December 2003 and the issue by the Group of 490,313,015
Ordinary shares of the then nominal value of 1p each at a
value of 2.06p per share in exchange for the whole of the
issued share capital of Oak Ventures Limited.
The goodwill arising on the acquisition was attributable primarily
to the fact that 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").
In January 2011, RMBC gave notice that it was terminating
the Development Agreement with effect from the end of January
2011. The directors have therefore concluded that the goodwill
previously recognised has been fully impaired. The directors
have consequently made an impairment provision against the
whole of the carrying value of the goodwill with an appropriate
charge being made in the statement of comprehensive income.
7 INVESTMENTS IN SUBSIDIARIES
Company Total
GBP
Cost
At 1 November 2008 10,435,961
Additions during the
year 100
------------------
At 31 October 2009 10,436,061
Additions during the
year 103
------------------
At 31 October 2010 10,436,164
==================
Provision for diminution
in value
At 1 November 2008 2
Provision in the year -
------------------
At 31 October 2009 2
Provision in the year 10,435,959
------------------
At 31 October 2010 10,435,961
------------------
Net book value
At 31 October 2010 203
==================
At 31 October 2009 10,436,059
==================
At 1 November 2008 10,435,959
==================
Subsidiary undertakings
The Company holds 100% of the ordinary share capital of Oak
Ventures Limited . Oak Ventures Limited has been engaged in
the pursuit of the development of a major investment property.
Oak Ventures Limited holds 100% of the ordinary share capital
in Yorkshire Entertainment Sensation Limited, a dormant company.
The carrying value of the investment in Oak Ventures Limited
is subject to the same impairment review considerations as
the value of goodwill, as described in Note 6 above and accordingly
has been impaired to nil value at the balance sheet date.
During the year ended 31 October 2010, the acquired the whole
of the issued share capital of Ringwood Town & Country Experience
Limited ("RTCE"), a then recently incorporated company which
had acquired the business and assets of a trade previously
carried on as a partnership. RTCE is the operator of a museum
and restaurant.
During the year ended 31 October 2010, the Group also acquired
the whole of the issued share capital of Oak Heritage Limited,
a newly formed company which had not traded. Shortly after
its acquisition, Oak Heritage Limited acquired certain historic
motor vehicle assets of RTCE and commenced operations in the
restoration and maintenance of historic motor vehicles.
8 INVENTORIES
Group Company
2010 2009 2010 2009
GBP GBP GBP GBP
Consumables 70,500 56,230 - -
Work in progress 15,000 - 15,000 -
Memorabilia and vehicles 494,283 - - -
579,783 56,230 15,000 -
========== ======== ======== =====
The Group acquired various items of memorabilia and vehicles
as part of the acquisition of RTCE. The Group is holding these
assets with the intention of trading them in the future as
opportunities arise. Certain of these assets are used in the
interim period as display items in its museum activities.
The items are currently held within inventories as shown above,
although it is not anticipated that the entire amount will
be disposed of at any time in the near future.
9 BORROWINGS
Group Company
2010 2009 2010 2009
GBP GBP GBP GBP
Current liabilities
Bank loan 250,000 251,935 250,000 251,935
Bank overdraft 16,418 - 3,067 -
Hire purchase
liabilities 21,854 9,168 - -
Vendor mortgage
loan 650,000 750,000 650,000 750,000
Other loans 100,600 - 100,600 -
---------- ---------- ---------- ----------
1,038,871 1,011,103 1,003,667 1,001,935
========== ========== ========== ==========
Non-current liabilities
Directors'
loans - 451,858 - 438,358
Loans from related
parties - 64,854 - 64,854
Hire purchase
liabilities 18,237 17,555 - -
---------- ---------- ---------- ----------
18,237 534,267 - 503,212
========== ========== ========== ==========
The vendor mortgage loan represents the amount payable to
the vendor of freehold land purchased by the Group in the
year ended 31 October 2007 and is secured on that land. During
the year, the terms of this loan have been renegotiated requiring
repayment in accordance with a schedule by 31 December 2012.
As part of the renegotiation, shares were issued to the vendor
in settlement of accrued interest and the loan became interest
free so long as it was being repaid in accordance with the
schedule. Upon any default, interest became payable at 4%
over the NatWest Bank base rate from the date of such default.
The Company has not made the repayments of principal due on
this loan of GBP150,000 on 31 August 2010 and of GBP100,000
on 31 December 2010 and accordingly the loan is in default
and is immediately repayable. Active negotiations are taking
place with the lender to further amend the terms of this loan.
Of the other loans, GBP70,000 is secured on an historic motor
vehicle owned by the Group, bears interest at 12% per annum
and is repayable on 17 August 2011 and a further loan of GBP22,500
is secured on the spare parts associated with that motor vehicle,
bears interest at 7% per annum and is repayable in instalments
by 31 March 2012. The remaining loans have no formal terms
and do not bear interest.
During the year the directors' loans were used to subscribe
for new ordinary shares in the Company or waived or, in the
case of accruals relating to a former director, reclassified
as an accrual.
GBP21,854 of the hire purchase loans are repayable within
12 months, GBP14,077 in between one and two years from the
balance sheet date and the balance of GBP4,160 is repayable
in more than two years but less than five years from the balance
sheet date.
10 CASH ABSORBED BY OPERATIONS
Group Company
2010 2009 2010 2009
GBP GBP GBP GBP
Operating (loss)/profit (11,476,201) 326,536 (12,970,939) 236,099
Depreciation 36,682 2,745 - -
Impairment of goodwill
and investment 10,828,446 - 12,763,889 -
Share based awards 43,106 35,063 43,106 35,063
Increase in inventories (33,207) (56,230) (15,000) -
Decrease/(increase)
in receivables (68,339) (91,652) (390,914) (217,692)
(Decrease)/increase
in payables 230,096 (347,988) (38,870) (490,596)
Adjustment for
waiver of loans - (180,695) - -
Cash absorbed by
operations (439,417) (312,221) (608,728) (437,126)
============ ========= ============ =========
11 ACQUISITIONS
On 1 December 2009 the Company acquired the whole of the issued
share capitals of Ringwood Town and Country Experience Limited
and of Oak Heritage Limited ("RTCE") for an aggregate consideration
of GBP200 paid in cash. Oak Heritage Limited had cash of GBP100
and no other assets or liabilities. RTCE had, immediately
prior to its acquisition by the Company, acquired the business
and assets of an unincorporated business operating a museum
and restaurant facility at their book value.
The following table summarises the amounts of the assets and
liabilities of RTCE at the date of acquisition and represents
the acquisition costs for RTCE and the directors' estimate
of fair value at the date of acquisition:
Leasehold improvements 209,654
Inventories of memorabilia 487,274
Inventories of consumables 3,072
Cash 100
Trade and other payables (6,000)
Bank loan (104,000)
Vendor loan (505,000)
Cash provided by the Group
prior to acquisition (85,000)
Consideration paid
in cash 100
=========
No acquisition-related costs have been allocated to this acquisition
and no goodwill has been recognised.
The vendor loan was exchanged for 10,100,000 new ordinary
shares in March 2010.
The revenue included in the consolidated statement of comprehensive
income since 1 December 2009 contributed by RTCE was GBP58,152.
RTCE contributed a loss of GBP84,878 over the same period.
As the business owned by RTCE was operated as an unincorporated
business for the period prior to its acquisition, it is not
practicable to provide comparable figures for the amounts
which would have been contributed had RTCE been consolidated
from 1 November 2009, but the directors do not believe that
the additional revenues or profit or loss would have been
material.
12 POST BALANCE SHEET EVENTS
In January 2011, Rotherham Metropolitan Borough Council gave
notice that it was terminating the Development Agreement between
itself and the Company's subsidiary, Oak Ventures Limited,
with effect from the end of January 2011. As a result of this
termination, the Group's investment in the YES! Project has
ceased to have any future or value and the directors have
therefore concluded that the goodwill previously recognised
has been fully impaired. The directors have therefore made
an impairment provision against the whole of the carrying
value of the goodwill with an appropriate charge being made
in the statement of comprehensive income. This property development
activity has therefore ceased since the balance sheet date.
13 STATUS OF FINANCIAL INFORMATION
The financial information set out in this preliminary announcement
does not constitute statutory accounts as defined in section
434 of the Companies Act 2006. The Consolidated Statement
of Financial Position at 31 October 2010 and the Consolidated
Statement of Comprehensive Income, the Statement of Changes
in Equity and the Consolidated Cash Flow Statement and associated
notes for the year then ended have been extracted from the
Group's 2010 statutory financial statements on which the auditors
will give an unqualified report, but with a statement drawing
attention to the use of the going concern basis for the accounts.
14 ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be held at
11.30 am on 25 May 2011 at the offices of Starr & Partners,
5th Floor, 21 Garlick Hill, London EC4V 2AU
15 MAILING OF ACCOUNTS
The Annual Report and Accounts is being mailed to registered
shareholders at their registered address and copies of the
Annual Report will be made available to the public free of
charge for one month at the Company's registered office, 38
South Molton Street, London W1K 5RL and from the Company's
website: www.oakholdings.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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