PARKWOOD HOLDINGS PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2005
Parkwood Holdings plc, the public sector support services specialist, announces
its preliminary results for the year ended 31 December 2005. These results have
been prepared under International Financial Reporting Standards ("IFRS").
Financial Highlights:
* Revenue increased by 18% to �79.8 million (2004: �67.7 million)
* Operating profit increased by 77% to �1.97 million (2004: �1.11 million)
* Profit before tax increased by 94% to �2.06 million (2004: �1.06 million)
* Earnings per share more than doubled to 6.9 pence (2004: 3.0 pence)
* Proposed final dividend up 15% to 1.5 pence per share (2004: 1.3 pence).
Total amount paid and charged in the year 2.3 pence (2004: 2.2 pence)
* Group order book increased by 14% to �318 million as at 31 December 2005
(2004: �278 million)
Key Events:
* Excellent results from the Group's Leisure division
* Acquisition of Green Waste Recycling and Horticulture businesses by
Glendale, the "green" services division, to diversify service offering.
* Financial close on a leisure PFI with Breckland Council in November 2005
Tony Hewitt, Executive Chairman, commented:
"Parkwood has made strong progress this year, leaving us optimistic for 2006
and beyond. With our focus now on the expansion of the Leisure business and
with additional management resources in place within Glendale, we are
implementing a long-term programme of initiatives which we expect to improve
returns for shareholders."
For further information, please contact:
Parkwood Holdings plc
Tony Hewitt, Executive Chairman 01772 627111
Charles Bithell, Finance Director 01772 627111 / 07717 630531
Neil Baldwin , Brewin Dolphin Securities Limited 0113 241 0126
Neil Boom, Gresham PR 0207 404 9000
Notes for Editors:
Parkwood Holdings plc specialises in providing outsourced and support services,
predominantly to the public sector across England and Wales under long term
contracts. Its four main areas of operation are as follows:
Glendale. Provides amenity horticulture, grass cutting, arboriculture and care
of sports pitches, parks and open spaces. The division also includes golf
course management, green waste recycling, environmental consultancy and
horticulture.
Parkwood Leisure. Manages a diverse range of leisure facilities, including
swimming pools, sports halls, gyms, health suites and catering operations.
PFI Projects. Undertakes PFI, PPP and similar bids on behalf of joint ventures
and the Group. Parkwood PFI is also responsible for project management of
contracts and the management of other funds such as the lifecycle funds
associated with the project agreement.
Healthcare. A nursing agency and an ambulance and patient transport business,
Parkwood Healthcare operates in London and the South East, dealing both with
the NHS and the private sector.
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2005
CHAIRMAN'S STATEMENT
2005 was a better year for Parkwood with profit before tax of �2.06 million
(2004: �1.06 million). The Leisure division is now the driving force in the
Group and was responsible for two thirds of the operating results (before
central costs of �908,000 (2004: �975,000)). Glendale, the `green services'
division which has successfully diversified its business in the last two to
three years, has still to meet its profit ambitions.
Results
The Group is reporting its full year results under International Financial
Reporting Standards (IFRS). Revenue increased to �79.8 million in 2005, an 18%
increase over the previous year. Profit before tax increased by 94% to �2.06
million from �1.06 million in 2004. Earnings per share more than doubled to 6.9
pence (2004: 3.0 pence).
At the operating level, profits totalled �1.97 million against �1.11 million in
the prior year with an excellent result in the Group's Leisure division of �
2.02 million (2004: �1.24 million) but only �1.01 million (2004: �1.18million)
in Glendale. Parkwood Healthcare finally became profitable at the individual
contract contribution level and the Group's PFI project management business
made a small profit.
The Group remained cash positive (excluding PFI ventures) throughout most of
the year despite the cost of funding two acquisitions which totalled �1.79
million (including debt acquired) and having invested �0.8 million in equity
and subordinated debt in special purpose PFI companies, we ended the year with
recourse cash balances of �1.04 million (2004: �1.66 million). The Group's PFI
investments are return in excess of 12.0% to their investors, and provided
interest income of �133,000 (2004: �63,000) in 2005. In total the Group has now
been responsible for �50 million of capital investment in the special purpose
companies financed through senior debt in each project. Gearing at the end of
the year excluding non-recourse debt relating to PFI was 52%, up from 27% in
the previous year. Interest cover remains high at 11 times (2004: 8 times).
Dividends
Dividends paid and charged in the year totalled 2.3 pence (2004: 2.2 pence) and
were covered by earnings of 6.9 pence (2004: 3.0 pence). The Board is pleased
to be able to report a proposed dividend of 1.5 pence (2004: 1.3 pence), an
increase of 15% over the previous year, which will be paid on 19 May 2006 to
all shareholders on the register on 21 April 2006.
Order Book and Prospects
The order book target of �500 million set in 2003 has every prospect of being
achieved in 2006. A new target of �1 billion has now been set. With the
diversification of Glendale complete, the Group's attention now turns to the
Leisure division where we seek to double our size in the next two to three
years, by entering the private health and fitness market and seeking another
major acquisition. In the meantime, our PFI project management company
continues to provide a flow of investment opportunities and long term operating
contracts. The fledgling green waste recycling, golf management and
horticultural activities within Glendale also offer some exciting prospects for
the future.
New business within Glendale with Liverpool City Council, and within Leisure
with Staffordshire Moorlands and North Somerset is expected to provide
additional revenue for 2006, with revenue for the Group as a whole expected to
reach �100 million.
Management and Board
The Board welcomed Brian May on his appointment as a non executive director in
April 2005. Brian has extensive experience within the construction and PFI
sectors and, following formal performance evaluation we are pleased to propose
his re-appointment by the shareholders at the forthcoming Annual General
Meeting in May 2006.
Parkwood has been seeking to appoint a new Chief Executive, but the thorough
recruitment selection process has not found a suitable candidate to date. The
search will be resumed in the second half of 2006. Chris Marsh who has been a
non-executive director since 1999 will retire at the Annual General Meeting in
May this year. Chris has given both me and other colleagues all the support
that could be wished for and we extend our sincere thanks to him. We are in the
process of appointing a new non-executive director.
Within the Group a new Managing Director of Parkwood Healthcare was appointed
in September 2005 and a number of other senior staff have been promoted or
recruited to strengthen management in the various divisions.
Staff
Average staff numbers including agency, seasonal, part-time and casual
employees totalled over 3,600 during the year making Parkwood one of the larger
employers based in the North West. Significant investment has been made in
ensuring that the Human Resources department within the Group is able to deal
with all the legislation affecting the employment of people and to ensure that
our high standards of staff care are maintained.
As a community based organisation, Parkwood's employees deal with the day to
day issues that concern everyone: running cr�ches, looking after children,
teaching people to swim, maintaining parks and gardens, providing
entertainment, taking people to hospital and caring for some of those who are
ill. We would like to congratulate all of our staff on the part they play in
providing so many important services to the communities in which they live.
Outlook
Parkwood makes year on year progress and prospects for 2006 and beyond are
good. With our focus on the expansion of the Leisure business and additional
management resource in Glendale, we are looking to continue the long term
programme of initiatives which we expect to improve returns for shareholders.
A W Hewitt
Executive Chairman
13 March 2006
CONSOLIDATED INCOME STATEMENT
Year Ended 31 December 2005
Existing Acquisitions 2005 2004
Operations Total Total
�000 �000 �000 �000
Continuing operations
Revenue 79,116 2,321 81,437 69,042
Less: share of joint ventures (1,654) - (1,654) (1,385)
revenue
Group revenue - continuing 77,462 2,321 79,783 67,657
operations
Cost of sales (58,249) (1,545) (59,794) (51,234)
Gross profit 19,213 776 19,989 16,423
Administrative expenses (17,064) (761) (17,825) (15,051)
Group operating profit before 2,149 62 2,211 1,621
reorganisation costs
Reorganisation costs - (47) (47) (249)
2,149 15 2,164 1,372
Share of results of associate 51 - 51 40
Share of results of joint ventures (245) - (245) (306)
Total operating profit 1,955 15 1,970 1,106
Investment income 197 - 197 113
Other gains and losses 93 - 93 -
Finance costs (128) (74) (202) (159)
Profit before tax 2,117 (59) 2,058 1,060
Tax (752) (493)
Profit for the year from continuing operations 1,306 567
Attributable to:
Equity holders of the parent 1,306 567
Earnings per share from continuing operations
Basic earnings per share 6.9p 3.0 p
Diluted earnings per share 6.8p 3.0 p
CONSOLIDATED BALANCE SHEET
As at 31 December 2005
2005 2004
�000 �000
Non-current assets
Goodwill 1,039 406
Property, plant and equipment 9,571 11,395
Interests in joint ventures 414 (155)
Interest in associate 221 243
Deferred tax asset 2,354 2,407
13,599 14,296
Current assets
Inventories 2,332 863
Trade and other receivables 9,760 8,814
Cash and cash equivalents 1,356 2,110
13,448 11,787
Total assets 27,047 26,083
Current liabilities
Trade and other payables 13,721 11,902
Current tax liabilities 945 323
Obligations under finance leases 860 934
Bank loans 99 -
15,625 13,159
Net current liabilities (2,177) (1,372)
Non-current liabilities
Bank loans 2,605 4,458
Retirement benefit obligations 3,307 2,418
Long-term provisions 1,444 2,371
Obligations under finance leases 1,709 1,447
Total non-current liabilities 9,065 10,694
Net assets 2,357 2,230
Equity
Share capital 196 196
Share premium account 2,227 2,227
Investment in own shares (154) (164)
Capital redemption reserve 401 401
Retained deficit (313) (430)
Equity attributable to equity holders of the parent 2,357 2,230
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 December 2005
2005 2004
�000 �000
Net cash from operating activities 4,559 3,444
Investing activities
Interest received 197 113
Dividends received from associate 73 -
Proceeds on disposal of property, plant and 141 283
equipment
Purchases of property, plant and equipment (4,744) (5,608)
Subordinated debt (invested in)/ repaid by (784) 3
joint ventures
Equity investments in joint ventures (113) -
Subordinated debt invested in other (95) -
investments
Sales of own shares by employee benefit trust 10 24
Acquisition of subsidiary (net of cash (1,787) 1,750
acquired)
Disposal of investment to joint venture 95 -
Disposal of subsidiary to joint venture (net (643) -
of cash disposed)
Net cash used in investing activities (7,650) (3,435)
Cash flows from financing activities
Interest paid (202) (159)
Dividends paid (427) (401)
Repayments of obligations under finance leases (1,014) (1,107)
New recourse bank loans raised 301 -
New non-recourse bank loans raised 3,679 4,458
Net cash from financing activities 2,337 2,791
Net (decrease)/increase in cash and cash (754) 2,800
equivalents
Cash and cash equivalents at beginning of the 2,110 (690)
year
Cash and cash equivalents at end of the year 1,356 2,110
Comprising:
Cash 1,356 2,110
RECONCILIATION OF NET CASHFLOW MOVEMENT TO NET DEBT
Year ended 31 December 2005
2005 2004
�000 �000
(Decrease)/increase in cash in the year (754) 2,800
Cash outflow from reduction in debt and lease financing 1,014 1,107
Movement on bank loan 2,055 (4,458)
Finance leases and bank loan acquired with subsidiary (343) -
Change in net debt resulting from cashflows 1,972 (551)
New finance leases (1,160) (1,301)
Decrease /(increase) in net debt 812 (1,852)
Net debt at 1 January (4,729) (2,877)
Net debt at 31 December (3,917) (4,729)
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Year ended 31 December 2005
2005 2004
�000 �000
Actuarial losses on defined benefit pension schemes (762) (125)
Net loss recognised directly in equity (762) (125)
Profit for the year 1,306 567
Total recognised income and expense for the year 544 442
Notes
1. RESULTS AND ACCOUNTING POLICIES
While the financial information included in this preliminary announcement has
been computed in accordance with International Financial Reporting Standards
("IFRS"), this announcement does not itself contain sufficient information to
comply with IFRS. The Group expects to publish full financial statements which
comply with IFRS on or before 4th April 2006. The accounting policies used in
preparation of this preliminary announcement are consistent with those in the
full financial statements which have yet to be published. The preliminary
results for the year ended 31 December 2005 were approved by the board of
directors on 13 March 2006.
The financial information set out above does not constitute the Group's
statutory accounts for the year ended 31 December 2005 or 2004 as detailed in
section 240 of the Companies Act 1985, but is derived from those accounts.
Statutory accounts for 2004 under UK GAAP have been delivered to the Registrar
of Companies and those for the year ended 31 December 2005, under IFRS, will be
delivered to the Registrar of Companies following the Company's annual general
meeting. The auditors have reported on these accounts; their report was
unqualified and did not contain a statement under s237(2) or (3) of the
Companies Act 1985.
2. BUSINESS SEGMENTS
Revenue, profit before tax and net assets all arose in the United Kingdom.
An analysis of the Group's revenue is as follows:
2005 2004
Continuing operations �000 �000
Provisions of services to Local authorities - Grounds 36,231 32,821
management and parks
Horticultural sales 1,113 -
Golf Course management, including retail sales 4,063 2,037
Provisions of services to Local authorities - Leisure 30,911 26,463
facility management
Provision of patient transport services 4,520 3,911
Nursing Agency Sales 1,861 1,980
PFI bid management and project management 1,032 384
Other 52 61
Total revenue 79,783 67,657
2. BUSINESS SEGMENTS (continued)
An analysis of results by division for 2005 and 2004 is as follows:
Year ended Glendale Leisure Healthcare PFI Other Total
Projects
31 December 2005 �000 �000 �000 �000 �000 �000
Revenue 41,407 30,911 6,381 1,032 52 79,783
Results
Profit before 1,056 2,018 (151) 2 (714) 2,211
reorganisation costs
Reorganisation costs (47) - - - - (47)
1,009 2,018 (151) 2 (714) 2,164
Share of results of - - - - 51 51
associate
Share of results of - - - - (245) (245)
joint ventures
Total operating 1,009 2,018 (151) 2 (908) 1,970
profit / (loss)
Net finance costs (253) 122 (91) - 310 88
and other income
Profit / (loss) 756 2,140 (242) 2 (598) 2,058
before tax
Total assets 16,620 15,747 1,169 1,987 (8,476) 27,047
Total liabilities (14,613) (13,480) (3,455) (2,402) 9,260 (24,690)
Net assets/ 2,007 2,267 (2,286) (415) 784 2,357
(liabilities)
2. BUSINESS SEGMENTS (continued)
Year ended Glendale Leisure Healthcare PFI Other Total
Projects
31 December 2004 �000 �000 �000 �000 �000 �000
Revenue 34,858 26,463 5,891 384 61 67,657
Results
Profit before 1,183 1,487 (334) (6) (709) 1,621
reorganisation costs
Reorganisation costs - (249) - - - (249)
1,183 1,238 (334) (6) (709) 1,372
Share of results of - - - - 40 40
associate
Share of results of - - - - (306) (306)
joint ventures
Total operating 1,183 1,238 (334) (6) (975) 1,106
profit / (loss)
Net finance costs (202) 106 (83) - 133 (46)
and other income
Profit / (loss) 981 1,344 (417) (6) (842) 1,060
before tax
Total assets 12,864 8,633 718 1,214 2,654 26,083
Total liabilities (10,479) (7,161) (2,779) (1,560) (1,874) (23,853)
Net assets/ 2,385 1,472 (2,061) (346) 780 2,230
(liabilities)
The negative effect on total assets within "other" in 2005 is due to the
elimination of intercompany balances, with the corresponding entry impacting on
liabilities.
3. TAXATION
The effective tax rate for the year was reduced to 36.5% (2004: 47%). The
current year charge was higher than the basic UK rate due to the impact of the
losses from joint ventures and associate and due to expenses not allowable for
taxation. The prior year corporation tax charge was high due to disallowable
expenses net of an adjustment to prior year corporation tax provisions.
4. STATEMENT OF CHANGES IN EQUITY
Share Share Investment Capital Retained Total
capital premium in own redemption earnings
shares reserve
�000 �000 �000 �000 �000 �000
Balance at 1 January 196 2,227 (188) 401 (455) 2,181
2004 under IFRS
Actuarial losses on - - - - (125) (125)
defined benefit pension
schemes (net of tax)
Profit for the year - - - - 567 567
Total recognised income - - - - 442 442
for the year
Share based payments - - 24 - - 24
Dividends - - - - (417) (417)
Balance at 31 December 196 2,227 (164) 401 (430) 2,230
2004
Balance at 1 January 196 2,227 (164) 401 (430) 2,230
2005
Actuarial losses on - - - - (762) (762)
defined benefit pension
schemes (net of tax)
Profit for the year - - - - 1,306 1,306
Total recognised income - - - - 544 544
for the year
Share based payments - - 10 - - 10
Dividends - - - - (427) (427)
Balance at 31 December 196 2,227 (154) 401 (313) 2,357
2005
5. The final dividend is payable on 19 May 2006 to shareholders on the register
as at 21 April 2006.
6. Earnings per share for the year to 31 December 2005 have been calculated on
the profit attributable to ordinary shareholders of �1,306,000 (2004: �567,000)
using the weighted average number of shares in issue during the period.
7. The Annual Report will be posted to shareholders on or around 4 April 2006.
Copies will also be available from the companies website (
www.parkwood-holdings.co.uk) and from:
The Company Secretary, Parkwood Holdings plc, Parkwood House, Cuerden Park,
Berkeley Drive, Bamber Bridge, Preston PR5 6BY
The results will not be advertised in any newspaper
ENDS
FOR RELEASE 13 MARCH 2006
PARKWOOD HOLDINGS PLC
END
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