RNS Number:7034S
Parkwood Holdings PLC
11 March 2002
Parkwood Holdings plc
PRELIMINARY RESULTS FOR THE YEAR TO 31 DECEMBER 2001
Parkwood Holdings plc, the grounds management, leisure and healthcare support
services group announces its preliminary results for the year ended 31 December
2001.
Financial Highlights
• Turnover increased by 8% to £40.9m
• Operating profit on continuing activities increased by 59% to £1.52m
• Profit before tax of £1.34m represents a strong recovery from the
disappointing performance in the year 2000
• Earnings per share before goodwill and exceptional items of 5.3p
• Net debt reduced by 30% to £1.36m at the year end
• Dividend for the year increased by 33% to 2p per share - final
dividend for the year 1.2p
• Group order book increased to £154m from £132m at the half year.
Key Events
• The Group signed its second PFI contract in September 2001, which is
the first PFI in the local authority leisure market
• In January 2001, the Group completed the purchase of 1.8m of its own
shares at a price of 20p per share, providing a significant earnings
enhancement to remaining shareholders
• In March 2001, the Group purchased the National Ambulance Service,
which helped the Healthcare Division achieve a net profit for the first
time
• The Group is a member of the Boxwood consortium which was appointed
as preferred bidder in December 2001 to redevelop and operate leisure
facilities in Bexley, which should produce a contract with annual revenues
rising to c£5m and a 33 year life.
Tony Hewitt, Executive Chairman, commented;
"We are pleased with the results for the year ended 31 December 2001. The Group
started 2002 with sales in hand of over £43m. It should therefore be possible
to build on these results with another year of solid progress in 2002."
Enquiries;
Parkwood Holdings plc
Tony Hewitt, Executive Chairman 01772 627111
Doug Eadie, Finance Director 07710 652572
Parkwood Holdings plc
PRELIMINARY RESULTS FOR THE YEAR TO 31 DECEMBER 2001
CHAIRMAN'S STATEMENT
We are pleased with the results for the year ended 31 December 2001. Profits
before tax of £1.34 million have started to restore confidence in the Group and
the price of the Group's shares has risen to levels not seen since the end of
1997.
Results
The results for 2001 were ahead of the market's expectations. Profit before
goodwill and tax of £1.45 million was achieved on turnover of £40.9 million.
Group strategy has been to increase operating profit margins and this strategy
has resulted in operating margins before goodwill on continuing activities of 4%
in 2001, against 2.9% in 2000.
Group cashflow has been positive throughout the year producing a net cash inflow
before dividends of £1.24 million. A reduction in net debt of £0.57 million has
resulted in gearing of a modest 35% at the year end.
The local authority division of Glendale Managed Services has had a successful
year, achieving a year-end profit before tax of £1.98 million (2000: £0.19
million) on an increased turnover of £37.2 million (2000: £35.4 million). The
pre tax margin of 5.6% is a significant improvement on the pre tax margin of
3.4% on continuing business in 2000. The grounds management business had another
steady year with strong profits on an increased turnover. Whilst the Leisure
business failed to grow in size, its concentration on margins paid off with PBT
growth of 38.3%. Following a very disappointing year in 2000 when its landscape
business was shut down, Glendale Countryside has now recovered to a profitable
position, making a small profit in the year.
On increased sales of £3.7 million (2000: £2.4 million), Parkwood Healthcare
recorded a profit before tax of £1,000 (2000: loss of £211,000). I am pleased
that our perseverance in the Healthcare market is at last being rewarded and
that this business is now trading profitably.
Dividend
As a result of the Group's improved performance I am delighted to report that
the Board has considered it appropriate to raise the final dividend to 1.2p
(2000: 0.8p) payable on 10 May 2002 to shareholders on the register on 5 April
2002. The full year dividend of 2.0p per share represents an increase of 33%
over the two previous years, and is 2.6 times covered by profits before goodwill
in line with the Group's policy.
Markets and Order Book
The Group's forward order book remains stable at £154 million although our
target is to increase this to £250 million by 2004/5. Securing new long term
contracts in all businesses is a priority. In this respect our investment over
the years in our Private Finance Initiative / Public Private Partnership unit is
now paying off. This will add considerably to the forward order book in the
next two to three years.
The Group Board has decided to add to its recent success in the defence sector
by forming a new Defence Division to trade under the name Realm Defence
Services. The Parkwood Group will then be focused on the local government,
healthcare and defence sectors in the medium to longer term.
Management and Board
Andrew Holt took up his appointment as Chief Executive on 1 May 2001 and is
gradually taking on more responsibility.
A new Managing Director, has been appointed to lead the Board of Parkwood
Healthcare and we are grateful that Stuart Colligon who has led the company
through the last three formative years remains with the Healthcare business as
Business Development Director.
Staff
There has been an inevitable turnover in staff during the year as contracts
around the Group were either newly awarded or completed. I would like to thank
everyone for their efforts; once again shares have been awarded from the
Employee Benefit Trust to employees with more than five years service.
Outlook
As a result of the contracts won at the end of 2001, the Group started 2002 with
sales in hand of over £43 million. It should therefore be possible to build on
these results with another year of solid progress in 2002.
A W HEWITT
Executive Chairman
8 March 2002
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year Ended 31 December
2001 2000
Continuing Continuing Discontinued
Note Operations Acquisitions Total Operations Operations Total
£000 £000 £000 £000 £000 £000
Turnover 2 39,764 1,108 40,872 37,202 628 37,830
Cost of sales (29,531) (876) (30,407) (28,051) (868) (28,919)
Gross profit / (loss) 10,233 232 10,465 9,151 (240) 8,911
Administrative expenses (8,804) (139) (8,943) (8,192) (953) (9,145)
Operating profit / (loss) 2 1,429 93 1,522 959 (1,193) (234)
Share of operating loss in joint (9) -
ventures
Profit on sale of property - 464
Interest payable and similar charges (172) (211)
Profit on ordinary activities before 1,341 19
taxation
Tax on profit on ordinary activities 3 (464) (14)
Profit on ordinary activities after 877 5
taxation
Dividends 5 (377) (307)
Retained profit / (loss) for the 500 (302)
year
Earnings per share - basic 4 4.7p 0.0p
Earnings per share before goodwill - 4 5.3p 0.5p
basic
Earnings / (loss) per share before 4 5.3p (1.7p)
goodwill
and exceptional items - basic
Earnings per share - diluted 4 4.6p 0.0p
There were no recognised gains or losses other than the result for the year.
CONSOLIDATED BALANCE SHEET
At 31 December
Group Company
2001 2000 2001 2000
£000 £000 £000 £000
Fixed assets
Intangible assets 620 661 - -
Tangible assets 3,760 3,158 86 81
Investments 316 144 298 318
4,696 3,963 384 399
Investments in joint ventures
Share of gross assets 939 - - -
Share of gross liabilities
(923) - - -
16 - - -
Current assets
Stocks 419 446 - -
Debtors due within one year 5,584 5,841 902 631
Debtors due after more than one year 490 445 3,045 2,968
Cash at bank and in hand 386 - - -
6,879 6,732 3,947 3,599
Creditors: amounts falling due within one year (6,669) (6,142) (1,362) (553)
Net current assets 210 590 2,585 3,046
Total assets less current liabilities 4,922 4,553 2,969 3,445
Creditors: amounts falling due after more than
one year (1,013) (784) - (72)
3,909 3,769 2,969 3,373
Capital and reserves
Called up share capital 196 214 196 214
Capital redemption reserve 401 383 401 383
Share premium account 2,227 2,227 2,227 2,227
Profit and loss account
1,085 945 145 549
Equity shareholders' funds 3,909 3,769 2,969 3,373
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December
Notes 2001 2000
£000 £000 £000 £000
Net cash inflow from operating activities 6 3,693 2,349
Returns on investments and servicing
of finance
Interest paid (62) (94)
Interest element of finance lease contracts (110) (117)
Net cash outflow for returns on
investments and servicing of finance (172) (211)
Taxation
UK corporation tax received / (paid) 7 (158)
Capital expenditure and financial investment
Purchase of tangible fixed assets (1,037) (704)
Purchase of fixed asset investment (170) -
Proceeds from sale of tangible fixed assets 192 894
Net cash (outflow) / inflow for capital
expenditure and financial investment (1,015) 190
Acquisitions and disposals
Purchase of business 8 (294) -
Cash acquired with business 70 -
Purchase of shares in joint venture undertaking (25)
Sale / (purchase) of own shares by
Employee Benefit Trust 18 (144)
Net cash outflow for acquisitions and disposals (231) (144)
Equity dividends paid (299) (321)
Cash inflow before use of liquid 1,983 1,705
resources and financing
Financing
Capital element of finance lease rental payments (717) (884)
Bank loan 180 -
Purchase of own shares (360) -
Loan from director (repaid) / received (143) 143
Net cash outflow for financing (1,040) (741)
Increase in cash in the year 7 943 964
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
Year Ended 31 December
Group Company
2001 2000 2001 2000
£000 £000 £000 £000
Profit for the financial year 877 5 347 790
Dividends (377) (307) (391) (307)
Issue of shares - 11 - 11
Redemption of shares (360) - (360) -
Net increase / (reduction) in shareholders' funds 140 (291) (404) 494
Shareholders' funds at 1 January 3,769 4,060 3,373 2,879
Shareholders' funds at 31 December 3,909 3,769 2,969 3,373
Notes
1. Accounting Policies
The above financial information does not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985. The comparative financial
information has been extracted from the statutory accounts for the year ended 31
December 2000. These accounts have been delivered to the Registrar of
Companies. The auditors have reported on these accounts; their report was
unqualified and did not contain a statement under s237(2) or (3) Companies Act
1985.
The statutory accounts for the year ended 31 December 2001 will be finalised on
the basis of the financial information presented by the directors in their
preliminary announcement and will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.
The preliminary announcement has been prepared in accordance with applicable
accounting standards under the historical cost convention. The principal
accounting policies of the Group have remained unchanged from those set out in
the Group's 2000 annual report and financial statements, with the exception of
FRS18. FRS18 "Accounting Policies" has become effective in the period. This has
had no impact on the results of the Group.
The Group continues to account for pension costs under SSAP24 "Accounting for
Pension Costs". However, in accordance with FRS17 Retirement Benefits the Group
will provide the necessary transitional disclosures in the full financial
statements.
2. Turnover, Operating Profit, Net Interest, Profit on Ordinary Activities
before Taxation and Net Assets
Turnover, operating profit, net interest, profit on ordinary activities before
taxation and net assets all of which originated in the United Kingdom are
attributable to the following classes of business:
Operating
Profit / Net Profit/(loss) Net assets/
Turnover (loss) Interest before tax (liabilities)
2001 £000 £000 £000 £000 £000
Managed Services Division 37,168 2,076 (93) 1,983 4,183
Healthcare Division 3,704 43 (42) 1 358
Central Costs - (597) (37) (643) -
40,872 1,522 (172) 1,341 4,541
Bank loan and overdrafts (935)
Fixed asset investments 335
Other creditors (32)
3,909
2000 Operating
Profit / Net Profit/(loss) Net assets/
Turnover (loss) Interest before tax (liabilities)
£000 £000 £000 £000 £000
Managed Services Division
- Continuing 34,777 1,173
- Discontinued 628 (1,193)
Total 35,405 (20) (255) 189 3,346
Healthcare Division 2,425 (171) (40) (211) 474
Central Costs - (43) 84 41 -
37,830 (234) (211) 19 3,820
Bank loan and overdrafts (199)
Fixed asset investments 164
Other creditors (16)
3,769
Discontinued activities consist of the landscape construction business which
ceased taking on new contracts in August 2000.
The profit on ordinary activities before taxation is stated
after charging / (crediting):
2001 2000
£000 £000
Depreciation of tangible fixed assets 1,413 1,309
Profit on sale of fixed assets (74) (501)
Amortisation of goodwill 110 103
Hire of other assets 1,104 946
Auditors' remuneration - audit services 31 23
- other services 23 14
Half Yearly Performance Analysis
In order to comply with best practice, given below are the results in each half
of the year. These results are as follows:
2001 2000
Half 1 Half 2 Total Half 1 Half 2 Total
£000 £000 £000 £000 £000 £000
Turnover 20,467 20,405 40,872 18,594 19,236
37,830
Operating profit / (loss) 551 971 1,522 (766) 532 (234)
Share of operating loss in joint - (9) (9) - - -
ventures
Profit on sale of property - - - 463 1 464
Profit / (loss) on ordinary activities
before interest 551 962 1,513 (303) 533 230
Interest payable (113) (59) (172) (131) (80) (211)
Profit / (loss) on ordinary activities
before taxation 438 903 1,341 (434) 453 19
3. Tax on Profit on Ordinary Activities
The tax charge is based on the profit for the year and comprises:
2001 2000
£000 £000
UK corporation tax at 30% (2000: 30%) 468 -
Adjustment in respect of prior years:
UK corporation tax (4) 14
464 14
The tax charge of 34.6% is higher than the statutory rate of 30%, due to the non
tax deductibility of goodwill amortisation and £55k of costs relating to gaining
approval for the share buy-back in January 2001.
4. Earnings Per Ordinary Share
Earnings per share (EPS) have been calculated on the weighted average number of
Ordinary shares in issue throughout the year ended 31 December 2001 of
18,827,497 shares (2000: 21,279,241 shares). Earnings, which are based on
profits on all activities after tax, amounted to £877,000 (2000: £5,000).
Earnings before goodwill amortisation were £987,000 in 2001 (2000: £108,000).
Profits before goodwill amortisation and exceptional items were £987,000 in 2001
(2000: loss £356,000). The EPS before goodwill amortisation and exceptional
operating items are shown separately in order to illustrate the impact of Group
goodwill accounting policies and exceptional operating items on reported EPS.
Earnings before goodwill and exceptional items are calculated as follows:
2001 2000
Earnings Weighted Per share Earnings Weighted Per share
average amount £000 average amount
£000 number of (pence) number of (pence)
shares shares
Basic earnings per share 877 18,827,497 4.7 5 21,279,241 0.0
Goodwill amortisation 110 - 0.6 103 - 0.5
Earnings per share before goodwill 987 18,827,497 5.3 108 21,279,241 0.5
Exceptional items - - - (464) - (2.2)
Earnings / (loss) per share before
goodwill and exceptional items 987 18,827,497 5.3 (356) 21,279,241 (1.7)
Weighted average shares held by
Group's employee share options
scheme 571,553 230,000
Basic weighted average number of
shares 18,827,497 21,279,240
Dilutive effect of share options 218,292 65,883
Diluted weighted average number of
shares 19,045,789 21,345,124
Diluted earnings per share 877 19,045,789 4.6 5 21,345,124 0.0
Goodwill amortisation 110 - 0.6 103 - 0.5
Diluted earnings per share before
goodwill 987 19,045,789 5.2 108 21,345,124 0.5
Exceptional items - - - (464) - (2.2)
Diluted earnings per share before
goodwill and exceptional operating
costs
987 19,045,789 5.2 (356) 21,345,124 (1.7)
5. Dividends
2001 2000
£000 £000
Equity dividends
Final proposed dividend of 1.2p (2000: 0.8 p) per Ordinary share 235 157
Interim dividend of 0.8p (2000: 0.7 p) per Ordinary share 142 150
377 307
6. Reconciliation of Operating Profit / (Loss) to Net Cash Inflow from
Operating Activities
2001 2000
£000 £000
Operating profit / (loss) 1,522 (234)
Depreciation 1,413 1,309
Profit on sale of fixed assets (74) (37)
Amortisation of intangible assets 110 103
Decrease / (increase) in stocks 27 (42)
Decrease in debtors 401 1,170
Increase in creditors 294 80
Net cash inflow from operating activities 3,693 2,349
7. Reconciliation of Net Cashflow Movement to Net Debt
2001 2000
£000 £000
Increase in cash in the year 943 964
Cash outflow from reduction in debt and lease financing 537 884
Movement on director's loan 143 (143)
Change in net debt resulting from cashflows 1,623 1,705
Finance leases acquired with business (7) -
New finance leases (1,046) (790)
Decrease in net debt 570 915
Net debt at 1 January (1,932) (2,847)
Net debt at 31 December (1,362) (1,932)
8. Purchase of Business
On 1 March 2001, the Group completed the acquisition of the business of the
National Ambulance Service. The total consideration for this acquisition of
£339,000 is set out below:
2001
£000
Net assets acquired
Tangible fixed assets 44
Debtors 193
Cash at bank and in hand 70
Creditors (50)
Loans and finance leases (7)
250
Goodwill 89
339
£000 Paid in Year Outstanding
£000 £000
Satisfied by:
Loan notes 183 (183) -
Cash 51 (51) -
Contingent consideration 105 (60) 45
339 (294) 45
The consideration included £105,000 of consideration contingent upon the level
of net assets in pre-acquisition completion accounts. £45,000 of the contingent
consideration was still outstanding at 31 December 2001 and is payable in March
2002.
As the business was fully integrated into the business of Parkwood Healthcare
Limited, it is not possible to separately identify the cashflows arising from
the business post acquisition.
The profit after tax of the National Ambulance Service in the 14 months to 28
February 2001 was £113,000 (year ending 31 December 1999: £19,000)
This acquisition has been accounted for using the acquisition method of
accounting. The amount of goodwill arising on this transaction is £89,000 and
this has been capitalised in the group balance sheet. The following table
summarises the adjustments made to the book value of the major categories of
assets and liabilities acquired to arrive at the fair values included in the
consolidated financial statements at the date of acquisition.
Fair Value Fair Value to the
Book Amount Adjustments Group
£000 £000 £000
Tangible fixed assets 50 (6) 44
Current assets 292 (29) 263
Creditors and provisions (57) - (57)
285 (35) 250
The fair value adjustment in respect of current assets include a provision of
£21,000 against trade debtors.
The Annual Report will be posted to shareholders on or about 28 March 2002 and
copies will be available from the Company Secretary, Parkwood House, Cuerden
Park, Berkeley Drive, Bamber Bridge, Preston, PR5 6BY
This information is provided by RNS
The company news service from the London Stock Exchange
Parkwood Holdings (LSE:PKW)
Historical Stock Chart
From May 2024 to Jun 2024
Parkwood Holdings (LSE:PKW)
Historical Stock Chart
From Jun 2023 to Jun 2024
