Parkwood Holdings plc
RNS Release
11 September 2006
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2006
Parkwood Holdings plc, the support services group, is pleased to announce its
interim results for the 6 months ended 30 June 2006.
Financial and business highlights:
Revenue rose by 17% to �45.7m (2005: �39.1m)
Operating profit increased by 37% to �1.14m (2005: �0.83m)
Profits before tax rose by 29% to �1.03m (2005: �0.80m)
Earnings per share increased to 3.3p, up 27% from last year (2005: 2.6p)
Proposed dividend of 1.1p (2005: 1.0p) payable to shareholders on 13 October
2006
Group order book increased by 30% to �424m (2005: �326m), with significant
orders in the Leisure division
Acquisition of Civic Trees, a well established tree moving and planting
business in January 2006 by Glendale, the "green" services division
Financial close on a Public Private Partnership with Solihull Metropolitan
Borough Council for two Leisure centres and with the London Borough of Bexley
for a new Leisure centre in Sidcup
Entered private sector leisure market by acquiring two health and fitness clubs
in Hertfordshire and started the fit out of a centre in Salisbury which will
open at the end of the year
Tony Hewitt, Executive Chairman of Parkwood Holdings, commented:
"Parkwood has experienced growth in both sales and profits in the six months to
30 June 2006 and Group turnover is moving towards �100 million per annum. We
are also pleased to report improved profit margins. Parkwood's results for the
first half are slightly ahead of expectation and I therefore expect the Group,
once again, to achieve a satisfactory outcome for the year."
For further information, please contact:
Tony Hewitt Executive Chairman 01772 627111
Charles Bithell Financial Director 01772 627 111
Neil Boom Gresham PR Ltd. 020 7404 9000
Information on Parkwood Holdings plc can be accessed via the company's website
at
www.parkwood-holdings.co.uk
Notes to editors:
About Parkwood Holdings plc:
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, waste recycling, environmental
consultancy, tree moving and horticulture.
Parkwood Leisure Manages a diverse range of public and private leisure
facilities, including swimming pools, sports halls, gyms, health suites and
catering operations.
Project Management Undertakes PFI, PPP and similar bids on behalf of joint
ventures and the Group. Parkwood Project Management is also responsible for
project management of contracts and the management of other funds such as the
lifecycle funds associated with the project agreements.
Healthcare A nursing agency and an ambulance and patient
transport business, Parkwood Healthcare is expanding its operations from London
and the South East into other parts of England and Wales, dealing both with the
NHS and the private sector.
Chairman's Statement
Parkwood has experienced growth in both sales and profits in the six months to
30 June 2006. During this period, a tree moving business, Civic Trees, was
acquired by Glendale, the Group's green services division, and its leisure
division entered the private sector leisure market by acquiring two clubs in
Hertfordshire. Two PFI/PPP leisure projects were brought to financial close
and leisure centres with construction costs of �42 million were in various
stages of completion by the end of the period.
Group Results
Revenue increased by 17% to �45.7 million (2005: �39.1 million) and profits
before tax of �1.03 million were achieved (2005: �0.80 million). Operating
profits increased to �1.14 million (2005: �0.83 million). Parkwood's forward
order book at the period end was �424 million compared to �326 million a year
earlier.
The Board is pleased to increase the dividend for the period to 1.1p per share
(2005: 1.0p per share) payable on 13 October 2006 to all shareholders on the
register on 22 September 2006.
Board and Management
Chris Marsh, who had been a non-executive director of Parkwood since 1998,
retired from the Board at the end of April 2006. Chris, who acted as the
senior independent non-executive director and also chaired the Audit Committee,
had given the Group valuable service and I personally thank him for his astute
observations over many years. Richard Tolkien was appointed to the Board on 1
May 2006. Richard has considerable experience having started his career at H M
Treasury, then moving to the City with Morgan Grenfell before becoming joint
Head of the Corporate and Advisory division at HSBC. He is also a
non-executive director of Share plc. Sarah Kling now becomes the senior
independent non-executive director and Chair of the Audit Committee. Brian May
continues as a non-executive director. Charles Bithell, the Group's Finance
Director has recently announced his resignation and his replacement is being
sought. He has agreed to remain in post for the duration of his contract which
ends in March 2007. Andrew Holt continues as an executive director on the
Board. The search for a new Chief Executive will be resumed at the end of the
year.
Glendale
Glendale's sales for the period at �23.7 million (2005: �19.8 million) were
less than expected as a result of lower sales in Coblands, the horticultural
nursery business acquired in September 2005; and because a major new contract
with the City of Liverpool did not become operational during the period.
Nevertheless, the increase in sales over the same period in the previous year
was almost 20%. Profits were also much improved, amounting to �0.49 million
(2005: �0.27 million) as a result of effective management control being
exercised by an expanded senior management team led by Nick Temple-Heald, the
Division's Managing Director.
The acquisition of Civic Trees in January 2006 added a well established tree
moving and planting business to the portfolio of Glendale's green activities.
Based near Watford in Hertfordshire, this company has been integrated into
Glendale's Countryside activity, complementing both the arboricultural and the
nursery business. A new tree nursery is planned in Kent with the intention of
servicing the building programme for the Olympic Games in 2012.
Glendale Golf was delighted to take possession of Duxbury Park Golf Centre at
Chorley in Lancashire in April; and in July was informed that it had been made
preferred bidder for a twenty year contract for the Royal Parks Golf courses in
Richmond Park, which is due to commence in October 2006. Glendale Golf is
designing new golf clubhouses for both courses. As a result of the Duxbury
win, the Group was able in May to relocate the Glendale division out of its
Head Office to offices at Duxbury Park where it will develop with greater
autonomy.
Parkwood Leisure
The leisure division had a successful first half achieving profits of �0.91
million (2005: �1.02 million) on sales of �17.9 million (2005: �15.8 million)
despite significant increases in utility costs. In March, a contract was
signed to complete the fit out of a private sector Health and Fitness Centre in
Salisbury which will open at the end of the year and in April, Parkwood Health
and Fitness, the new brand for the private club market, became a reality when
the leases and on-going memberships of two clubs in Hitchen and Potters Bar
were acquired.
In the public sector market, two centres were taken into management with the
signing of PFI/PPP deals and a significant contract with North Somerset
District Council added another 3 centres. In total, the leisure division at
the end of the period operated 51 centres. Also in April, the development of
the new Cardiff International Sports Village by the City Council led to
Parkwood Leisure being chosen as the management operator for a ten year period
which is due to commence after construction is completed in December 2007.
Project Management
In July 2006 the Group's PFI/PPP business was renamed Parkwood Project
Management and during the period was responsible for taking two Leisure centre
projects to financial close, one with the London Borough of Bexley for a new
centre at Sidcup costing �14.7 million and being constructed by Gleeson
Construction Services Limited, and the other with the Metropolitan Borough of
Solihull for a new centre in Tudor Park in the town centre and the
refurbishment of an existing centre in the north of the Borough. The
construction partner at Solihull is Leadbetter Construction Limited and the
construction costs are �14 million. Both projects, together with
the previously signed construction programme for Breckland District Council in
Norfolk, are actively project managed by the Company.
In addition, a risk reduction repricing exercise for the Ministry of Defence in
respect of the Corsham Development Project was submitted at the end of April.
A decision on this, the largest PFI project the Company has undertaken to date,
is expected in early October 2006.
Sarah Hughes-Clarke, the Managing Director of the business for the last three
years, left the Company at the end of August to take a year off travelling, and
Jeremy Lightfoot, the Company's Project Management Director was appointed to
the role of Managing Director on 1 September 2006. I would like to thank Sarah
for her work in putting together what I consider to be a first rate project
management team, which is exploring new opportunities, including the
Government's Building Schools for the Future programme.
Parkwood Healthcare
Parkwood Healthcare continues to be loss making and, although unsuccessful in
retaining a significant patient transport contract with St George's Hospital
NHS Trust in Tooting, South London at the end of April, was awarded a similar
size contract by North Staffordshire NHS Trust, which commenced on 1
August 2006. This is the first major patient transport contract that Parkwood
Healthcare has won outside the London area. As a result, a new Operations
Director, Phil Graham has been recruited and joined the Company at the end of
June 2006. The recruitment agency business continues to transfer its activity
into the private sector as a result of changes to NHS nursing staff
procurement. A worthwhile contract with Turning Point, a substance abuse
charitable organisation, was awarded in July 2006.
Funding and Cashflow
During the period, the Group's total net debt has increased from �3.92 million
at 31 December 2005 to �7.68 million at 30 June 2006. This increase has been
mainly caused by the inclusion of two wholly owned Leisure PFI ventures which
are in their construction phases, involving the drawing down of long-term bank
loans, accounting for �5.65 million (31 December 2005: �2.39 million) of the
Group's net debt. Underlying net debt at 30 June 2006 of �2.03 million has
increased by �0.5 million at the period end as a result of additional working
capital demands. During the period the Group received interest income on its
subordinated debt investments and on cash deposits in the bank, which after
subtracting hire purchase interest of �64,000 resulted in a small net financing
income.
Outlook
Group turnover is moving towards �100 million per annum. A medium term margin
target of 4% has been set by the Board and profit margins are increasing.
Funds will be required over the next two to three years for sub-ordinated debt
in PFI/PPP projects, as capital for the construction of Golf Clubhouses, for
private sector leisure facilities and green waste recycling plants. At the
same time, the opportunity to refinance senior debt in existing special purpose
companies presents the prospect of some one-off gains. Parkwood's results for
the first half are slightly ahead of expectation and I therefore expect the
Group, once again, to achieve a satisfactory outcome for the year.
A W Hewitt
Executive Chairman
11 September 2006
Financial Review
During the half year to 30 June 2006 the Group's involvement in PFI and PPP
ventures has continued to increase and the impact on the accounts has become
more significant. The Group's interests are held through both wholly owned
subsidiaries which are fully consolidated within these accounts and through
Joint Venture and Associated Company investments.
The Group's income statement includes a share of the profits and losses of the
Special Purpose Companies ("SPCs") established to operate the Group's PFI and
PPP ventures. The availability of profits for distribution is subject to
contractual and banking restrictions designed to ensure the long term viability
of the ventures. Funding sufficient to enable the SPCs to meet their long term
obligations at the outset and the requirement to fund any planned losses is
built into the long term financing arrangements of the ventures. The assets
and liabilities, including long term debt, within these SPCs are non recourse
to the Group. The Group has certain performance cross guarantees to the SPCs
arising from the Group subsidiaries' service and operating contracts with the
SPCs. All such projects are currently performing close to their original
plans.
An analysis of the profit before tax of the Group between recourse and
non-recourse companies is set out in note 3 to these financial statements.
To explain further the impact of PFI and PPP ventures on the Group's balance
sheet, the following table shows a summary Group balance sheet as at 30 June
2006 analysed between the Group's main trading assets and recourse liabilities
and PFI/PPP ventures.
Summary Group Balance Sheet Group SPCs Total Total
(recourse) (non-recourse)
30 Jun 31 Dec 30 Jun 31 Dec 30 Jun 31 Dec
06 05 06 05 06 05
�000 �000 �000 �000 �000 �000
Non-current assets 11,700 10,929 8,036 2,035 19,736 12,964
Investments in Joint Ventures 1,366 1,366 (856) (731) 510 635
and Associate
Total non-current assets 13,066 12,295 7,180 1,304 20,246 13,599
Current assets
Inventories and debtors 17,403 11,688 1,180 404 18,583 12,092
Cash at bank and in hand 1,040 1,343 2,289 13 3,329 1,356
18,443 13,031 3,469 417 21,912 13,448
Current liabilities (20,509) (15,552) (3,601) (73) (24,110) (15,625)
Net current (liabilities)/ (2,066) (2,521) (132) 344 (2,198) (2,177)
assets
Non current liabilities
Bank loans (149) (202) (7,939) (2,403) (8,088) (2,605)
Other long term liabilities (7,256) (6,460) - - (7,256) (6,460)
Net assets 3,595 3,112 (891) (755) 2,704 2,357
Net debt 2,033 1,527 5,650 2,390 7,683 3,917
Gearing 57% 49% 284% 166%
The gearing of the Group at 30 June 2006 based on its total net debt was 284%
(December 2005: 166%). However, net debt includes �5.65 million of non
recourse debt as set out above. The underlying gearing of the Group based on
recourse debt (compared to recourse net assets) was 57% (December 2005: 49%).
Gearing is expected to increase in the second half of the year as further
investment is made in subordinated debt in Leisure PFIs and in Private Sector
Leisure facilities.
Parkwood Holdings Plc
Unaudited Consolidated Income Statement
Six months ended 30 June 2006
Six months ended 30 Year ended 31
June December
(unaudited) (unaudited) (audited)
2006 2005 2005
Note �000 �000 �000
Continuing operations
Revenue 46,846 39,733 81,437
Less: share of joint ventures
revenue (1,102) (616) (1,654)
Group revenue - continuing
operations 45,744 39,117 79,783
Cost of sales (32,747) (29,769) (59,794)
Gross profit 12,997 9,348 19,989
Administrative expenses (11,859) (8,518) (17,825)
Group operating profit 1,138 830 2,164
Share of results after tax of
associate 16 30 51
Share of results after tax of
joint ventures (189) (83) (245)
Total operating profit 965 777 1,970
Investment income 94 99 197
Other gains and losses - - 93
Finance costs (33) (81) (202)
Profit before tax 1,026 795 2,058
Tax 4 (393) (299) (752)
Profit for the period from
continuing operations 633 496 1,306
Attributable to:
Equity holders of the parent 633 496 1,306
Earnings per share
Basic earnings per share 6 3.3p 2.6p 6.9p
Diluted 6 3.3p 2.6p 6.8p
There were no discontinued operations in the period.
Consolidated balance sheet as at 30 June 2006
30 June 30 June 31 December
2006 2005 2005
(unaudited) (unaudited) (audited)
�000 �000 �000
Non-current assets
Goodwill 849 691 1,039
Intangible asset 76 - -
Property, plant and equipment 16,507 7,333 9,571
Investments in joint ventures and associate 510 752 635
Other investments - 140 -
Deferred tax asset 2,304 1,625 2,354
20,246 10,541 13,599
Current assets
Inventories 2,632 922 2,332
Trade and other receivables 15,951 12,204 9,760
Cash 3,329 24 1,356
21,912 13,150 13,448
Total assets 42,158 23,691 27,047
Current liabilities
Trade and other payables 21,881 13,422 13,721
Tax liabilities 1,159 691 945
Obligations under finance leases 971 902 860
Bank overdrafts and loans 99 361 99
24,110 15,376 15,625
Net current liabilities (2,198) (2,226) (2,177)
Non-current liabilities
Bank loans 8,088 - 2,605
Retirement benefit obligations 3,307 2,168 3,307
Long-term provisions and deferred income 2,095 1,848 1,444
Obligations under finance leases 1,854 1,811 1,709
Total non-current liabilities 15,344 5,827 9,065
Net assets 2,704 2,488 2,357
Equity
Share capital 196 196 196
Share premium account 2,227 2,227 2,227
Investment in own shares (146) (156) (154)
Capital redemption reserve 401 401 401
Retained earnings/(deficit) 26 (180) (313)
Equity attributable to equity holders of the
parent 2,704 2,488 2,357
Consolidated statement of changes in shareholders' equity
For the six months ended 30 June 2006
Investment Capital
Share Share in own redemption Retained Total
capital premium shares reserve earnings
�000 �000 �000 �000 �000 �000
Balance at 1 January 2005 196 2,227 (164) 401 (430) 2,230
Profit for the period - - - - 496 496
Total recognised income for
the period - - - - 496 496
Share based payments - - 8 - - 8
Dividends - - - - (246) (246)
Balance at 30 June 2005 196 2,227 (156) 401 (180) 2,488
Balance at 1 January 2005 196 2,227 (164) 401 (430) 2,230
Actuarial losses on defined
benefit pension schemes (net
of tax) - - - - (762) (762)
Profit for the period - - - - 1,306 1,306
Total recognised income for
the period - - - - 544 544
Share based payments - - 10 - - 10
Dividends - - - - (427) (427)
Balance at 31 December 2005 196 2,227 (154) 401 (313) 2,357
Balance at 1 January 2006 196 2,227 (154) 401 (313) 2,357
Profit for the period - - - - 633 633
Total recognised income for
the period - - - - 633 633
Share based payments - - 8 - - 8
Dividends - - - - (294) (294)
Balance at 30 June 2006 196 2,227 (146) 401 26 2,704
All recognised income and expense is attributable to the equity holders of the
parent.
Group cash flow statement
For the six months end 30 June 2006
Year
Six months ended 30 ended
June 31 December
2006 2005 2005
(unaudited) (unaudited) (audited)
Note �000 �000 �000
Net cash from operating activities 7 4,578 1,032 4,559
Investing activities
Interest received 85 39 197
Dividends received from associate - 44 73
Proceeds on disposal of property, plant and
equipment 17 - 141
Purchases of property, plant and equipment (7,146) (2,009) (4,744)
Subordinated debt (invested in)/ repaid by
joint ventures - (742) (784)
Equity investments in joint ventures - - (113)
Subordinated debt invested in other
investments - (140) (95)
Sales of own shares by employee benefit
trust 8 8 10
Acquisition of subsidiary (net of cash
acquired) 8 (174) (464) (1,787)
Disposal of investment in joint venture - - 95
Disposal of subsidiary to joint venture (net
of cash disposed) - (653) (643)
Net cash used in investing activities (7,210) (3,917) (7,650)
Cash flows from financing activities
Interest paid (36) (41) (202)
Dividends paid (285) (246) (427)
Repayments of obligations under finance
leases (611) (551) (1,014)
New bank loans raised 5,537 1,276 3,980
Net cash from financing activities 4,605 438 2,337
Net increase/(decrease) in cash and cash
equivalents 1,973 (2,447) (754)
Cash and cash equivalents at beginning of
period 1,356 2,110 2,110
Cash and cash equivalents at end of period 3,329 (337) 1,356
Comprising:
Cash 3,329 24 1,356
Bank overdraft and loans - (361) -
3,329 (337) 1,356
Notes to the interim financial report
Six months ended 30 June 2006
1. General information
The financial information for the six months ended 30 June 2006
does not constitute statutory accounts as defined in section 240 of the
Companies Act 1985 and has not been audited. No statutory accounts for the
period have been delivered to the Registrar of Companies.
The financial information in respect of the year ended 31 December
2005 has been produced using extracts from the statutory accounts prepared
under IFRS for this period. The statutory accounts for this period have been
filed with the Registrar of Companies. The auditors' report on these accounts
was unqualified and did not contain a statement under Sections 237 (2) or (3)
of the Companies Act 1985 which deal respectively with the maintaining of
proper accounting books and records and the availability of information to the
auditors.
The financial information presented on pages 7 to 15 has been prepared
in accordance with IFRS, including International Accounting Standards (IAS) and
interpretations issued by the International Accounting Standards Board (IASB)
and its committees, as interpreted by any regulatory bodies relevant to the
Group. These are subject to ongoing amendment by the IASB and subsequent
endorsement by the European Commission and are therefore subject to change. As
a result the accounting policies used to prepare the interim financial report
will need to be updated for any subsequent amendment to IFRS.
2. 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 2005.
The interim financial statements have been approved by the Board and have not
been audited by the auditors.
3. Business segments
For management purposes, the Group is currently organised into four operating
divisions - Glendale, Parkwood Leisure, Parkwood Healthcare and Project
Management. These divisions are the basis on which the Group reports its
primary segment information.
Principal activities are as follows
Glendale The majority of the business comes from long
term contracts with local authority clients, involving amenity horticulture,
grass cutting, arboriculture, care of sports pitches, parks and open spaces.
The division also includes golf course management, green waste recycling,
environmental consultancy, tree moving and horticulture.
Parkwood Leisure The majority of the business comes from long term
contracts with local authorities, managing a diverse range of leisure
facilities, including swimming pools, sports halls, gyms, health suites and
catering operations. The division also includes ownership and operation of
private health and fitness facilities.
Parkwood Healthcare Consisting of a nursing agency and an ambulance and
patient transport business, Parkwood Healthcare operates in the South East and
the Midlands, dealing both with the NHS and the private sector.
Project Management This division undertakes PFI, PPP and similar bids on
behalf of joint ventures and the Group. Project Management is also responsible
for project management of contracts and the management of other funds such as
the lifecycle funds associated with the project agreements.
All sales are made to external parties with the exception of management and
other fees to joint ventures and the Group's associate.
An analysis of the Group's revenue is as follows:
Six months to Six months to
June June
Continuing operations 2006 2006 2005 2005
% �000 % �000
Provision of local services to Local Authorities - 42.4% 19,396 45.8% 17,914
Grounds management
Horticultural sales 5.0% 2,293 - -
Golf Course management, including retail sales 4.5% 2,038 4.9% 1,929
Total Glendale 51.9% 23,727 50.7% 19,843
Provision of services to Local Authorities - Leisure 39.0% 17,854 40.4% 15,814
facility management ("Parkwood Leisure")
Provision of patient transport services 4.5% 2,046 5.7% 2,207
Nursing Agency Sales 1.6% 744 2.5% 982
Total Healthcare 6.1% 2,790 8.2% 3,189
Bid and project management ("Project Management") 1.8% 829 0.5% 191
Interim service charges made by PFI companies 1.2% 544 0.2% 80
Total revenue 100.0% 45,744 100.0% 39,117
Segmental information about these divisions is presented below.
Recourse Non-recourse Total
Project PFI/PPP
Glendale Leisure Healthcare Management Other Companies Consolidated
Six months ended 30 June 2006
�000 �000 �000 �000 �000 �000 �000
Revenue 23,727 17,854 2,790 829 - 544 45,744
Group
operating
profit /
(loss) 651 844 (122) (127) (88) (20) 1,138
Share of
results of
associate - - - - - 16 16
Share of
results of
joint
ventures - - - - - (189) (189)
Total
operating
profit /
(loss) 651 844 (122) (127) (88) (193) 965
Investment
income - - - - 94 - 94
Interest
expense (157) 65 (1) - 60 - (33)
Profit /
(loss)
before tax 494 909 (123) (127) 66 (193) 1,026
Recourse Non-recourse Total
Project PFI/PPP
Glendale Leisure Healthcare Management Other Companies Consolidated
Six months ended 30 June 2005
�000 �000 �000 �000 �000 �000 �000
Revenue 19,843 15,814 3,189 191 80 - 39,117
Group
operating
profit /
(loss) 363 962 (77) (267) (76) (75) 830
Share of
results of
associate - - - - - 30 30
Share of
results of
joint ventures - - - - - (83) (83)
Total
operating
profit/(loss) 363 962 (77) (267) (76) (128) 777
Investment
income - - - - 99 - 99
Interest
expense (91) 54 (45) - 1 - (81)
Profit /
(loss)
before tax 272 1,016 (122) (267) 24 (128) 795
Parkwood PFI Projects was renamed as Parkwood Project Management during the
first half of 2006. Non-recourse companies are those companies in the Group
where the assets and liabilities of the company are restricted by contractual
agreements and the associated long term debt is non recourse to the Group. The
Group has certain performance cross guarantees to those companies arising from
the Group subsidiaries' service and operating contracts.
4. Tax
Corporation tax for the interim period to 30 June 2006 is charged at 33% (2005:
35%) of profit excluding joint ventures and associates representing the best
estimate of the effective rate of annual corporation tax rate expected for the
full financial year.
5. Dividends
Six months
ended Year ended 31
30 June December
2006 2005 2005
�000 �000 �000
Final 2005 paid May 2006 1.5p per share 294 - -
Final 2004 paid May 2005 1.3p per share - 246 246
Interim 2005 paid Sept 2005 1.0p per share (2004:
interim of 0.9p per share) - - 181
294 246 427
Following the balance sheet date, the Board of Directors has approved a
dividend of 1.1p per share (2005: 1.0p) payable on 13 October 2006 to all
shareholders on the register on 22 September 2006.
6. Earnings per share
Earnings per share relate to continuing operations and have been calculated on
earnings for the period divided by the weighted average number of ordinary
shares in issue of 19.00 million (December 2005: 18.98 million; June 2005:
18.97 million).
7. Net cash from operating activities
Six months ended 30 Year ended
June 31 December
2006 2005 2005
�000 �000 �000
Group operating profit 1,138 830 2,164
Adjustments for:
Depreciation of property, plant and equipment 1,212 1,413 2,383
Loss/(gain) on disposal of property, plant and
equipment 7 15 (80)
Net impairment of goodwill 14 - -
Amortisation of intangible asset 29 - -
Decrease in provisions (207) (464) (659)
Operating cash flows before movements in working
capital 2,193 1,794 3,808
(Decrease)/increase in inventories (recourse) (315) (55) 87
(Increase)/decrease in receivables (recourse) (5,524) (3,483) 315
Increase in payables (recourse) 5,598 3,671 1,859
(Increase)/decrease in receivables (non-recourse) (665) 104 (300)
Increase/(decrease) in payables (non-recourse) 3,419 (1,069) (991)
Cash generated by operations 4,706 962 4,778
Income taxes (paid)/received (128) 70 (219)
Net cash from operating activities 4,578 1,032 4,559
The comparative figures for the year ended 31 December 2005 and the half year
ended 30 June 2005 have been re-analysed to disclose the cash flows from
recourse and non-recourse working capital movements.
8. Acquisition of Subsidiary
On 31 January 2006, the Group completed the acquisition of the entire issued
share capital of Civic Trees (Tree Movers) Limited and its subsidiaries, which
are companies involved in the planting, relocating and supply of trees and
hedging to private business and local councils. Total net assets acquired were
�248,150 and consideration paid (including costs of acquisition) was �177,925,
resulting in negative goodwill of �70,225 which has been recognised in the
income statement in the period to 30 June 2006 in accordance with IFRS. The
post acquisition results of Civic Trees (Tree Movers) Limited have not been
presented separately on the face of the income statement as they are not
considered to be material.
END
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