RNS Number:2769J
Parkwood Holdings PLC
3 September 2001
PARKWOOD HOLDINGS PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2001
Parkwood Holdings plc, the support services group, announces interim results
for the 6 months ended 30 June 2001.
Highlights
* Turnover on continuing activities increased by 13% to #20.5 million
(2000; #18.1 million).
* Operating profit on continuing businesses before goodwill increased to
#0.61 million from #0.25 million.
* Earnings per share before goodwill of 1.82p for the first half (2000;
0.55p on continuing activities).
* Interim dividend per share increased by 14% to 0.8p per share (2000;
0.7p per share).
* All 4 businesses within the Group performed better than in the first
half of the year 2000.
* Strategically important 3 year contract won in Parkwood Healthcare to
provide non emergency patient transport services, building on this year's
acquisition of the National Ambulance Service.
Tony Hewitt, Chairman, commented:
"Results for the first half are much improved, with the core Glendale Local
Government business trading well. Parkwood Holdings now appears to be in a
position to benefit from a strategy that has always relied on a strong public
sector client base and a long term vision for the future."
Enquiries:
Parkwood Holdings plc
Tony Hewitt, Chairman 01772 627111
Andrew Holt, Chief Executive 01299 253400
Doug Eadie, Finance Director 01772 627111
CHAIRMAN'S STATEMENT
Results for the half year ended 30 June 2001 are much improved with the core
Glendale Local Government business trading well. Losses in our Healthcare
business continued, but the award of a major patient transport contract in
August following the acquisition of the National Ambulance Service business in
March 2001 leads me to expect that we have turned the corner and that this
business will be profitable by the year end.
Group Results
Group turnover increased by 13% to #20.5 million (2000; #18.1 million on
continuing activities), and generated operating profits before goodwill of
#0.61 million (2000; #0.25 million on continuing activities). Profits before
tax and exceptionals on continuing activities were #0.44 million (2000; #0.07
million), and this is in line with our expectations.
The Board is therefore declaring an increased dividend of 0.8p (2000; 0.7p),
payable on 19th October 2001 to all shareholders on the register on 28th
September 2001.
Board and Management
As announced Andrew Holt, an Executive Director since 1997 and previously the
Managing Director of Glendale Managed Services Division became the new Chief
Executive on 1st May 2001. He has settled comfortably in to the role and there
is stability in the Group's management with no other changes within the Group
Board or at a senior level elsewhere this year.
Glendale Managed Services Division
The Glendale businesses of Glendale Grounds Management, Glendale Leisure and
Glendale Countryside achieved sales of #19.12 million (2000; #17.33 million on
continuing activities), an increase of 10%, and produced profit before tax of
#0.87 million (2000; #0.48 million on continuing activities)
Glendale Grounds Management
Turnover in the Grounds Management business increased to #11.06 million (2000;
#9.64 million), and the profit before tax increased by 13% to #0.75 million
(2000; #0.66 million).
Two small contracts with Hinckley and Bosworth Borough Council and Harrogate
Borough Council came to an end during the period and new business was won with
an existing customer, Portsmouth City Council. With 22 clients, the average
annual value of contracts is now around #1 million.
Glendale Leisure
No new business has been won during the period and turnover was therefore
static at #6.2 million. Management have, as a result, concentrated on
increasing profitability, with profit before tax increasing to #0.76 million
from #0.56 million in the previous year, a commendable 36% increase.
Traditional opportunities for new business were limited in the period, but
more tenders are scheduled to become available in the second half when every
effort will be made to increase sales in this profitable business.
Glendale Countryside
A newly structured Glendale Countryside produced sales of #1.85 million (2000;
#1.47 million on continuing activities), whilst much attention was also
focussed on preparing for the contract at the Defence Animal Centre which
commences in November 2001. Despite disproportionately high overhead costs,
profit before tax of #0.07 million was secured against losses of #0.14 million
on continuing business in the same period last year. A new post, Director of
Estates has been filled by Tom Packham who joined the company from the Foreign
Office Estates Department.
Parkwood Healthcare
A loss of #34k (2000; #151k loss) was recorded in the period on sales of #1.66
million (2000; #1.13 million). Significant developments in the period were the
purchase of the National Ambulance Service for #0.3 million in March 2001; the
closure of the international nursing agency business in May 2001 and the
transfer of the Central London agency office in Archway to new offices in
Bloomsbury. Additionally, the award of a #1.1 million, three year contract to
provide patient transport services to St George's Healthcare NHS Trust in
Tooting, South London in August which is scheduled to commence in November
2001 should see the business in profit for the first time around the year end.
The Group's persistence in the Healthcare market will, I believe, be well
rewarded in due course.
Private Finance Initiative / Private Public Partnerships (PFI / PPP)
The signing of the Group's first Leisure PFI with Sefton Metropolitan Borough
Council is imminent at the time of writing and the Group's PFI unit has also
been selected as one of two bidders on a large Leisure PFI scheme with the
London Borough of Bexley with a decision on preferred bidder status expected
at the year end. Discussions have commenced with a private equity partner with
a view to forming a joint venture under the name, Leisureplan, to service all
the Group's future Leisure PFI projects.
The announcement of the Defence Training Review in April 2001 and the
certainty of a flow of PPP projects of a suitable size has persuaded the Group
to invest in trying to secure more projects in this sector building on the
success the Group has achieved with its first project for the Defence Animal
Centre (DAC) at Melton Mowbray which is now in the final stages of
construction. It is intended that the Realm brand used at the DAC be developed
for the future in this context.
Funding and Cashflow
The Group had net borrowings of #3.0 million at the period end, reduced from
#3.3 million at 30 June 2000, despite the expenditure of #0.36 million on the
purchase of 1.8 million of the company's own shares in January 2001. Banking
facilities have been negotiated to cover the period through to February 2002
and the Group's operating cashflows continue to be strong as a result of the
Group's consistent focus on strong cash management.
Change of Auditors
We are pleased to announce the appointment of Deloitte & Touche as the Group's
auditors with effect from 29 August 2001.
Outlook
After several difficult years, Parkwood Holdings appears to be in a position
to benefit from a strategy that has always relied on a strong public sector
client base and a long term vision for the future.
A W HEWITT
Executive Chairman
3rd September 2001
Financial Highlights
Continuing Activities Interim Interim %
2001 2000 Change
Turnover #20.5m #18.1m +13%
Operating Profit (before goodwill) #0.61m #0.25m +143%
Profit before Tax and exceptional items #0.44m #0.07m +528%
Earnings per share (EPS) 1.53p 0.30p +410%
EPS (before goodwill) 1.82p 0.55p +231%
All Activities
Dividends per share 0.8p 0.7p +14.3%
EPS (all activities) 1.53p (2.03p)
Order Book #132.0m #155.3m
Gearing 85.0% 89.3%
Financial Calendar
Interim Dividend Paid October 2001
Full Year Results Announced March 2002
Annual General Meeting April 2002
Final Dividend Paid May 2002
This statement is being sent to all shareholders and copies are available from
the Company's registered office:
Parkwood House, Cuerden Park, Berkeley Drive, Bamber Bridge, Preston PR5 6BY
Summary Group Profit and Loss Account
Notes 6 Months Ended Year ended
30 June 30 June 31 December
2001 2000 2000
(Unaudited) (unaudited) (audited)
#000 #000 #000 #000 #000
Total Continuing Discontinued Total Total
Operations Operations
Turnover 2 20,467 18,109 485 18,594 37,830
Net operating profit/ 3 551 197 (963) (766) (234)
(loss)
Profit on sale of 4 - 463 464
property
Interest payable (113) (131) (211)
Profit/(loss) on 2 438 (434) 19
ordinary activities
before taxation
Tax on profit/(loss) on
ordinary activities 5 (148) - (14)
Profit/(loss) on 290 (434) 5
ordinary activities
after taxation
Dividends 7 (142) (149) (307)
Retained profit/(loss) 148 (583) (302)
Earnings/(loss) per 6 1.53p (2.03p) 0.0p
share
Earnings/(loss) per 6 1.82p (1.79p) 0.5p
share (before goodwill)
Dividends per share 7 0.8p 0.7p 1.5p
Summary Group Balance Sheet
Notes At 30 June At 30 June At 31 December
2001 2000 2000
(unaudited) (unaudited) (audited)
#'000 #000 #000
Fixed assets
Intangible assets 679 692 661
Tangible assets 3,691 3,391 3,158
Investments 8 132 - 144
4,502 4,083 3,963
Current assets
Stocks 453 498 446
Debtors 8,004 8,410 6,286
8,457 8,908 6,732
Creditors: amounts falling due within (8,286) (8,500) (6,142)
one year
Net current assets 171 408 590
Total assets less current liabilities 4,673 4,491 4,553
Creditors: amounts falling due after (1,116) (835) (784)
more than one year
3,557 3,656 3,769
Capital and reserves
Called up share capital 11 196 214 214
Capital redemption reserve 11 401 383 383
Share premium account 11 2,227 2,227 2,227
Profit and loss account 11 733 832 945
Equity Shareholders' funds 3,557 3,656 3,769
Summary Group Cash Flow
Notes 6 Months Ended Year Ended
30 June 30 June 31 December
2001 2000 2000
(unaudited) (unaudited) (audited)
#000 #000 #000
Net cash inflow from 9 730 86 2,349
operating activities
Returns on investments and
servicing of finance
Net interest (54) (68) (94)
Interest element of (59) (63) (117)
finance lease payments
(113) (131) (211)
Taxation
UK corporation tax paid - (50) (158)
Capital expenditure and
financial investment
Purchase of fixed assets (464) (297) (704)
Sale of fixed assets 81 798 894
(383) 501 190
Acquisitions and disposals
Purchase of business (71) - -
Cash acquired with business 70 - -
Purchase of own shares by Employee - - (144)
Benefit Trust
(1) - (144)
Equity dividends paid (149) (171) (321)
Net cash inflow /(outflow) before
use of liquid resources and 84 (235) 1,705
financing
Financing
Capital element of finance lease (383) (456) (884)
rental payments
Debt due within one year:
Loan from director (repaid)/received (143) - 143
Purchase of own shares (360) - -
Bank loan 360 - -
(526) (456) (741)
(Decrease)/increase (442) (221) 964
in cash in the period
Notes to the Interim Accounts
1. Accounting Policies
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 2000. The interim financial statements have been
approved by the Board and have neither been reviewed nor audited.
The figures for the year to 31 December 2000 have been extracted, without
material adjustments, from the statutory accounts for the year. These
accounts received an unqualified audit report and have been filed with the
Registrar of Companies.
2. Turnover and profit/(loss) on ordinary activities before taxation
6 Months Ended Year Ended
30 June 30 June 31 December
2001 2000 2000
(unaudited) (unaudited) (audited)
#000 #000 #000
Contin- Discon- Total Contin- Discon- Total
uing tinued uing tinued
Activ- Activ- Activ- Activ-
ities ities ities ities
Turnover
Grounds 11,059 9,640 9,640 20,420 20,420
Management
Leisure 6,204 6,215 6,215 11,980 11,980
Countryside 1,853 1,474 485 1,959 3.083 628 3,711
Managed 19,116 17,329 485 17,814 35,483 628 36,111
Services
Healthcare 1,657 1,125 1,125 2,425 2,425
Internal (306) (345) (345) (706) (706)
Sales
20,467 18,109 485 18,594 37,202 628 37,830
All Group turnover originated in the United Kingdom. Figures for June 2000
have been restated to reflect the inclusion of the Countryside Division within
the Managed Services Division.
6 Months Ended Year Ended
30 June 30 June 31 December
2001 2000 2000
(unaudited) (unaudited) (audited)
#000 #000 #000
Contin- Discon- Total Contin- Discon- Total
uing tinued uing tinued
Activ- Activ- Activ- Activ-
ities ities ities ities
Grounds 753 664 - 664 1,630 - 1,630
Management
Leisure 763 561 - 561 944 - 944
Countryside 74 (141) (963) (1,104) 101 (1,193) (1,092)
1,590 1,084 (963) 121 2,675 (1,193) 1,482
Divisional (718) (606) - (606) (1,293) - (1,293)
overhead
Managed 872 478 - (485) 1,382 (1,193) 189
Services
Healthcare (34) (151) - (151) (211) - (211)
Central (346) (209) - (209) (320) - (320)
costs
Profit before 492 118 (963) (845) 851 (1,193) (342)
exceptional
items and goodwill
Exceptional - 463 - 463 464 - 464
items
Goodwill (54) (52) - (52) (103) - (103)
438 529 (963) (434) 1,212 (1,193) 19
3. Analysis of Operating Profit/(Loss)
30 June 2001 30 June 2000 Year Ended 31
(unaudited) (unaudited) December 2000
#000 #000 #000 #000 #000
Total Continuing Discontinued Total Total
Operations Operations
Operating profit/(loss)
before
goodwill 605 249 (963) (714) (131)
Goodwill amortisation (54) (52) - (52) (103)
Net operating profit/ 551 197 (963) (766) (234)
(loss)
4. Profit on Sale of Property
The exceptional gain in 2000 relates to the sale and leaseback of
Parkwood House, the Group's Head Office.
5. Taxation
Corporation Tax for the current year is charged at 33.8%, which is the
current expected rate for the year ending 31 December 2001.
6. Earnings Per Share
Earnings per share have been calculated on earnings for the period divided
by the weighted average number of Ordinary shares in issue of 18,962,973
(2000: 21,358,080). Diluted earnings per share is equivalent to basic
earnings per share.
7. Dividends
The Board has declared an interim dividend of 0.8p per Ordinary share
(2000 - 0.7p). The dividend will be paid on 19 October 2001 to all
shareholders registered on 28 September 2001. The final dividend for 2000
was paid in May 2001.
8. Investments
Investments at 30 June 2001 comprise the holding of 920,000 shares in
Parkwood Holdings Plc by Parkwood Group Trustees Ltd, the corporate
trustee of the Parkwood Group Employee Benefit Trust. At 30 June 2001, the
market value of these shares was 38.5p per share, or #354k.
9. Reconciliation of operating profit/(loss) to net cash inflow from operating
activities
6 Months Ended Year Ended
30 June 30 June 31 December
2001 2000 2000
(unaudited) (unaudited) (audited)
#000 #000 #000
Net operating profit/(loss) 551 (766) (234)
Depreciation of tangible fixed assets 690 644 1,309
(Profit)/loss on sale of tangible fixed (25) 16 (37)
assets
Amortisation of intangible assets 54 52 103
Amounts written off investments in own 11 - -
shares
Increase in stocks (7) (94) (42)
(Increase)/decrease in debtors (1,720) (904) 1,170
Increase in creditors 1,176 1,138 80
Net cash inflow from
operating activities 730 86 2,349
10. Analysis of net debt
At 1 January Cashflow Other non-cash At 30 June 2001
2001 changes
#000 #000 #000 #000
Bank overdraft (557) (442) - (999)
Bank loan - (360) - (360)
Director's loan (143) 143 - -
Finance leases (1,232) 383 (815) (1,664)
(1,932) (276) (815) (3,023)
11. Share Capital and Reserves
Share Capital Redemption Share Premium Profit & Loss
Capital Reserve Account Account
#000 #000 #000 #000
As at 1 January 214 383 2,227 945
2001
Retained profit - - - 148
Purchase of own (18) 18 - (360)
shares
At 30 June 2001 196 401 2,227 733
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