RNS Number:5555Q
Parkwood Holdings PLC
7 September 2000
PARKWOOD HOLDINGS plc
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2000
Parkwood Holdings plc, the support services group, announces
Interim Results for the six months ended 30 June 2000.
Highlights
* Turnover on continuing activities was #18.1 million (1999:
#15.0 million)
* Group profit before tax on continuing activities, excluding
exceptional gain, was #0.07 million (1999: #0.31 million)
* Group loss before tax, including #0.96 million loss from
Landscape Construction activities discontinued during the period,
was #0.43 million (1999 profit before tax: #0.34 million)
* Interim dividend per share maintained at 0.7p per share
* Strong performance by Grounds Management business, with
turnover up 8% and operating profit up 37%
* Strong performance also by Leisure business with turnover up
48% and operating profit up 56%
* Recent award of Group's first PFI contract, to manage
facilities at the MOD's Defence Animal Centre; a Parkwood led
consortium has also recently been appointed as Preferred Bidder
for a new leisure centre for Sefton Metropolitan Borough Council
* The Group's order book is strong
Tony Hewitt, Chairman and Chief Executive, commented:
"As we outlined in our statement of 17 July 2000, overall results
for the period were poor. However, the performance disguises a
significantly improved result in the core Glendale Managed
Services businesses, which confirms where we must now concentrate
our efforts, and we are very pleased with the progress made in
winning PFI contracts.
"With our order book now standing at #155 million, I remain
confident of the long term value of the Group's business and in
the ability of the management team to deliver."
Enquires:
Parkwood Holdings plc
Tony Hewitt, Chairman and Chief Executive 01772 627 111
Doug Eadie, Finance Director
Square Mile Communications 020 7601 1000
Nick Oborne/ Stephanie Smart
7 September 2000
PARKWOOD HOLDINGS plc
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2000
Chairman's Statement
I am pleased to report results for the half year ended 30 June
2000, a period which saw the continued success of the Group's core
business, unfortunately overshadowed by heavy losses in the
Landscape Construction business of Glendale Countryside.
As we have already announced, the Landscape Construction business
was closed on 31 August 2000; the full effect of this decision is
shown as discontinued operations in these accounts.
Group Results
Overall results for the period were poor. Turnover on continuing
activities was ahead by 21% at #18.1 million but operating profits
before goodwill were lower at #0.25 million (1999: #0.49 million).
The discontinued Landscape Construction business incurred losses,
including closure provisions, of #0.96 million (1999: #0.03
million profit). After interest, and excluding the exceptional
gain on the sale of Parkwood House, Group profits before tax on
continuing activities were #0.07 million (1999: #0.31 million).
This performance disguises a significantly improved result in the
core local authority businesses of Glendale Managed Services where
profit before tax of #0.62 million was achieved (1999: #0.35
million). As a result of the solid performance in the core
business the Board has declared that a maintained interim dividend
of 0.7p per share will be paid on 20 October 2000 to all
shareholders on the register on 6 October 2000.
Board and Management
I announced in July my intention to step down as Chief Executive
next year, but to remain as Chairman of the Group. The Non-
Executive Directors and I are considering how best to approach the
appointment of a successor.
Glendale Managed Services Division
This division, which includes the business of Glendale Grounds
Management and Glendale Leisure, achieved sales of #15.86 million
(1999: #13.04 million), representing 85% of the Group's turnover
in the period. Operating profits, as stated above, rose to #0.62
million (1999: #0.35 million) an increase of 77%. This
commendable performance confirms where we must concentrate our
efforts.
Glendale Grounds Management
The Grounds Management business operated 28 contracts (1999: 29)
with a turnover of #9.6 million (1999: #8.9 million). Operating
contribution was #0.66 million (1999: #0.48 million), an increase
of 37% over the same period last year.
Two small contracts came to an end in the period, including the
very first contract the company won, with Rugby Borough Council.
These contracts, worth #0.45 million on an annual basis, were
replaced by two large contracts, with the City of Birmingham and
the London Borough of Lewisham, representing #5 million of
annualised turnover.
Traditionally the first half of the year is the most difficult for
the Grounds Management business, with peak rates of grass growth
in May. Weather is always a factor to be taken into account;
initially we were helped by a dry spring, but early summer turned
very wet and caused some difficulties. Management coped well with
the varying conditions and results were not affected.
Glendale Leisure
With 29 facilities (1999: 25) to manage throughout the period,
turnover increased to #6.2 million (1999: #4.2 million).
Operating profits rose significantly to #0.56 million (1999: #0.36
million), an increase of 56%.
A new management structure was fully in place by February. The
additional overhead, which may currently be a little on the high
side, will allow the continued rapid growth of the leisure
business in line with the Group's strategy. In this light we are
pleased to announce the recent award of a three year contract with
the DSS in Leeds to manage a large staff facility on their behalf.
The small private health club, with which we started the business
in 1995, was sold in the period to realise a small profit on
disposal.
Glendale Countryside
Following the closure of the Landscape Construction business,
Glendale Countryside was incorporated into the Managed Services
Division from 1st September 2000. The arboricultural activity is
now the largest activity in this business, although the company
continues to run the landscape management contract for British
Airways and the equestrian grooms contract for the Royal Parks
Police. Turnover on continuing activity for the period was #1.47
million (1999: #0.96 million) providing an operating contribution
of #0.1 million (1999: #0.12 million).
Parkwood Healthcare
The results for the period were affected by losses resulting from
the abandonment of the home based nursing agency business model,
and the closure of the New Zealand office, but the business as a
whole, although still loss making because of the level of
overheads it carries, is trading steadily. Sales for the period
were #1.13 million (1999: #1.2 million) but losses increased to
#0.15 million (1999: #0.04 million). However, sales in the month
of July and August are now showing a healthy growth on last year.
Private Finance Initiative
We were recently pleased to announce at last the signing of a 25
year contract to manage the facilities at the MoD's Defence Animal
Centre in Melton Mowbray. This is the Group's first PFI contract.
Parkwood will receive revenue of about #1.8 million per year
commencing in late 2001 as a result of this award.
A Parkwood led consortium has also recently been appointed as
Preferred Bidders to build and operate a new leisure centre for
Sefton Metropolitan Borough Council at Crosby. This is one of the
first leisure PFI projects in the local authority market and
emphasises the Group's strong position in this market.
Funding and Cashflow
The Group's net borrowings reached #3.26 million at the end of
June (1999: #2.76 million), giving gearing of 89% (1999: 67%).
The increase of #0.42 million since 1 January 2000 is due to
seasonal working capital requirements, the working capital and
fixed asset requirements in the new Lewisham and Birmingham
contracts, and the losses in Landscape Construction. It is
expected that net debt will reduce from these levels by the year
end; indeed, net borrowings as at 31 August 2000 had already
reduced to #2.71 million.
Outlook
With our order book now standing at #155 million, I remain
confident of the long term value of the Group's business and in
the ability of the management team to deliver.
A W HEWITT
Chairman & Chief Executive
7 September 2000
Parkwood Holdings plc
Summary Group Profit and Loss Account
6 months ended Year ended
30 June 30 June 31 December
2000 1999 1999
(unaudited) (unaudited) (audited)
#000 #000 #000 #000 #000
Cont. Discont.
Notes operations operations Total Total Total
---------------------------------------------------------
Turnover 3 18,109 485 18,594 17,436 34,537
Operating
profit/(loss)
before goodwill 249 (963) (714) 517 1,137
Goodwill amortisation (52) - (52) (52) (100)
---------------------------------------------------------
Net operating
profit/(loss) 197 (963) (766) 465 1,037
Profit on sale of
property 463 - 463 - -
---------------------------------------------------------
Profit/(loss) on
ordinary activities
before interest 660 (963) (303) 465 1,037
--------------------------------
Interest payable (131) (122) (204)
(Loss)/profit on
ordinary activities
before taxation 3 (434) 343 833
Tax on (loss)/profit
on ordinary activities 5 - (118) (317)
--------------------------------
(Loss)/profit on ordinary
activities after taxation (434) 225 516
Dividends (149) (149) (320)
--------------------------------
Retained (loss)/profit (583) 76 196
================================
Earnings per share 6 2.48p (4.51p) (2.03p) 1.05p 2.4p
Earnings per share
(before goodwill) 6 2.72p (4.51p) (1.79p) 1.30p 2.9p
Dividends per share 0.7p 0.7p 1.5p
==================================================
Parkwood Holdings plc
Summary Group Balance Sheet
At 30 June At 30 June At 31 December
2000 1999 1999
(unaudited) (unaudited) (audited)
Notes #000 #000 #000
Fixed assets
Intangible assets 692 814 765
Tangible assets 3,391 3,526 3,366
-------------------------------------------
4,083 4,340 4,131
Current assets
Stocks 498 370 404
Debtors 8,410 8,251 7,456
-------------------------------------------
8,908 8,621 7,860
Creditors: amounts falling due
within one year (8,500) (8,113) (7,167)
-------------------------------------------
Net current assets 408 508 693
Total assets less current liabilities 4,491 4,848 4,824
Creditors: amounts falling due
after more than one year (835) (740) (596)
-------------------------------------------
3,656 4,108 4,228
===========================================
Capital and reserves
Called up share capital 10 214 213 213
Capital redemption reserve 10 383 383 383
Share premium account 10 2,227 2,217 2,217
Profit and loss account 10 832 1,295 1,415
-------------------------------------------
Shareholders' funds 3,656 4,108 4,228
===========================================
Parkwood Holdings plc
Summary Group Cash Flow
6 months ended Year ended
30 June 30 June 31 December
2000 1999 1999
(unaudited) (unaudited) (audited)
Notes #000 #000 #000
Cash inflow from operating
activities 8 86 484 1,414
----------------------------------------
Returns on investment and
servicing of finance
Net interest (68) (53) (74)
Interest element of finance
lease payments (63) (69) (130)
----------------------------------------
(131) (122) (204)
Taxation
UK corporation tax paid (50) (28) (300)
Capital expenditure and
financial investment
Purchase of fixed assets (297) (305) (666)
Sale of fixed assets 798 88 255
----------------------------------------
501 (217) (411)
Acquisitions and disposals
Purchase of subsidiary - - (115)
Equity dividends paid (171) (128) (277)
----------------------------------------
Net cash inflow/(outflow) before
use of liquid resources and financing 235 (11) 107
Financing
Capital element of finance lease
rental payments (456) (546) (1,042)
----------------------------------------
Decrease in cash in the period (221) (557) (935)
========================================
Parkwood Holdings plc
Notes to the accounts
1.The interim financial statements have been prepared on the basis of
the accounting policies set out in the Group's statutory accounts for the
year ended 31 December 1999. The interim financial statements have been
approved by the Board and have neither been reviewed nor audited.
2.The figures for the year to 31 December 1999 have been extracted
from the statutory accounts for the year. These accounts received an
unqualified audit report and have been filed with the Registrar of
Companies.
3.Turnover and profit/(loss) on ordinary activities before taxation
6 months ended Year ended
30 June 30 June 31 December
2000 1999 1999
(unaudited) (unaudited) (audited)
#000 #000 #000
Conti- Discont- Conti- Discont-
nuing inued Total nuing inued Total
Activ- Activ- Activ- Activit-
ities ities ities ies
Turnover
Grounds 9,640 9,640 8,871 8,871 18,156
management
Leisure 6,215 6,215 4,171 4,171 8,789
----------------------------------------------------------------
Managed
services 15,855 15,855 13,042 13,042 26,945
Countryside 1,474 485 1,959 959 2,468 3,427 5,985
Healthcare 1,125 1,125 1,203 1,203 2,299
Internal sales (345) (345) (236) (236) (692)
-----------------------------------------------------------------
18,109 485 18,594 14,968 2,468 17,436 34,537
=================================================================
All group turnover originated in the United Kingdom. Figures for 1999
have been restated to reflect the separation of the Managed Services and
Countryside Divisions.
Profit before tax by class of business
6 months ended Year ended
30 June 30 June 31 December
2000 1999 1999
(unaudited) (unaudited) (audited)
#000 #000 #000
Conti- Discont- Conti- Discont-
nuing inued Total nuing inued Total
Activ- Activ- Activ- Activ-
ities ities ities ities
Grounds
management 664 - 664 483 - 483 1,650
Leisure 561 - 561 362 - 362 866
----------------------------------------------------------------
1,225 - 1,225 845 - 845 2,516
Divisional
overhead (606) - (606) (497) - (497) (1,013)
----------------------------------------------------------------
Managed
services 619 - 619 348 - 348 1,503
Countryside (141) (963)(1,104) 123 30 153 (424)
Healthcare (151) - (151) (37) - (37) (89)
Central costs (210) - (210) (69) - (69) (18)
Exceptional
items 463 - 463 - - - (39)
Goodwill (52) (52) (52) (52) (100)
-----------------------------------------------------------------
528 (963) (435) 313 30 343 833
=================================================================
4.The exceptional gain relates to the sale and leaseback of Parkwood
House, the Group's Head Office.
5.No taxation has been provided, resulting from the operating loss in
the period and the expectation that no tax will be payable on the
exceptional gain due to rollover relief.
6.Earnings per share have been calculated on earnings for the period
divided by the weighted average number of Ordinary shares in issue of
21,358,080 (1999: 21,346,200). Diluted earnings per share is equivalent
to basic earnings per share.
7.The Board has declared an interim dividend of 0.7p per Ordinary
share (1999 - 0.7p). The dividend will be paid on 20 October 2000 to all
shareholders registered on 6 October 2000. The final dividend for 1999
was paid in May 2000.
8.Reconciliation of operating profit to net cash outflow from
operating activities
6 months ended Year ended
30 June 30 June 31 December
2000 1999 1999
(unaudited) (unaudited) (audited)
#000 #000 #000
Net operating (loss)/profit (766) 465 1,037
Depreciation of tangible
fixed assets 644 589 1,181
Loss/(profit) on sale of
tangible fixed assets 16 (1) (31)
Amortisation of intangible
fixed assets 52 52 100
(Increase) in stocks (94) (45) (79)
(Increase) in debtors (904) (2,245) (1,450)
Increase in creditors 1,138 1,669 656
----------------------------------------------
Net cash inflow from
operating activities 86 484 1,414
==============================================
9. Analysis of net debt
At 1 January Other non-cash At 30 June
2000 Cashflow changes 2000
#000 #000 #000 #000
Bank overdraft (1,521) (221) - (1,742)
Finance leases (1,326) 456 (652) (1,522)
--------------------------------------------------------------
(2,847) 235 (652) (3,264)
==============================================================
10. Share capital and reserves
Share Capital redemption Share premium Profit and loss
capital reserve account account
#000 #000 #000 #000
As at 1 January 2000 213 383 2,217 1,415
Retained loss - - - (583)
Issue of Ordinary shares 1 - 10 -
----------------------------------------------------------
At 30 June 2000 214 383 2,227 832
==========================================================
11.This statement is being sent to shareholders and copies are
available from the Company's registered office, Parkwood House, Cuerden
Park, Berkeley Drive, Bamber Bridge, Preston PR5 6BY.
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