PARKWOOD HOLDINGS PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2002
Parkwood Holdings plc, the support services group, announces interim results
for the 6 months ended 30th June 2002.
Highlights
* Turnover increased by 6% to �21.7 million (2001: �20.5 million).
* Operating profit before goodwill and joint venture losses increased by 7%
to �0.65 million (2001: �0.61 million).
* 17% increase in profit before tax to �0.51 million (2001: �0.44 million).
* Earnings per share before goodwill up 16% to 2.11p for the first half
(2001: 1.82p).
* Interim dividend per share increased by 13% to 0.9p per share (2001: 0.8p
per share).
* Order book of �147 million equivalent to more than 3 times current year
sales.
* Major progress made in PFI, with the group signing its third PFI contract
and establishing Leisureplan an important funding joint venture with
Barclays European Infrastructure Limited.
Tony Hewitt, Executive Chairman, commented:
"Parkwood Holdings is in a better shape than before, and the Group is
experiencing another satisfactory year. We are in a position to expand again
and push sales above the �50 million threshold next year, while increasing our
margins."
Enquiries:
Parkwood Holdings plc
Tony Hewitt, Executive 01772 627111
Chairman
Doug Eadie, Finance 07710 652572
Director
Notes for Editors:
Parkwood Holdings plc specialises in providing outsourced services to the
public sector across England and Wales under long term contracts. Its three
main areas of operation are as follows:
* Glendale - The management of parks and open spaces for a predominately
local authority client base. This operation is currently being expanded
into related "green" businesses under the "Think Green - Think Glendale"
logo.
* Parkwood Leisure - The management of a diverse range of leisure facilities,
again predominately for local authority clients. This Division is also the
beneficiary of most of the Group's contracts won under the PFI procurement
process.
* Parkwood Healthcare - The provision of non emergency patient transport to
NHS Trusts under the "National Ambulance Service" banner, together with the
provision of nurses on an agency basis to a similar client base
CHAIRMAN'S STATEMENT
The half year ended 30th June 2002 has provided results in line with
expectations. The most significant event in the period was the creation of
Leisureplan Limited, a joint venture established with Barclays European
Infrastructure Limited, which will bid for local authority leisure and cultural
projects. Parkwood is now consequently examining its organisational structure
for the future in the light of this exciting development.
Group Results
Group turnover increased by 6% to �21.7 million (2001: �20.5 million) and
produced operating profits before goodwill and joint venture losses of �0.65
million (2001: �0.61 million). With the added benefit of lower interest
charges, profits before tax increased by 17% to �0.51 million (2001: �0.44
million).
The Board is pleased to declare an increased interim dividend of 0.9p (2001:
0.8p), payable on 18th October 2002 to all shareholders on the register on 13th
September 2002.
Board and Management
There were no changes in the composition of the Board in the period. I would,
however, like to announce that Edwin Lee who has been a non-executive director
of the Parkwood Group since 1992 will retire at the Annual General Meeting in
May 2003, in keeping with the Group's belief that the rotation of non-executive
directors after eight or ten years service is in its best long term interests.
Edwin has agreed to remain with Parkwood and will take up a new non-executive
position as Chairman of the Group's Healthcare business from 17th September
2002. We will be seeking a replacement Non Executive Director for the main
Board during the course of the next few months.
Glendale Managed Services
The various Glendale businesses which include the two main activities of
Glendale Grounds Management and Glendale Leisure achieved sales of �19.20
million (2001: �18.81 million) and generated a profit before tax of �0.91
million - a small increase on the same period in the previous year (2001 : �
0.87 million).
Glendale Grounds Management and Glendale Countryside
The Managing Director of Glendale Countryside left the business in the period
and these two "green" businesses have been managed together since the Spring
and achieved a combined turnover of �12.94 million (2001 : �12.60 million).
Operating profit before divisional overheads increased to �0.92 million (2001:
�0.83 million) largely as a result of a good performance in the larger Grounds
Management contracts at Liverpool, Birmingham, Islington and Lewisham. The
Defence Animal Centre, which began operations at the end of January 2002, made
a small contribution in the period, and the new Grounds Management contracts at
Maidstone and Eastleigh performed well.
In April we were awarded a contract to provide the floral displays for the
Commonwealth Games in Manchester and this has been a great success with the
bedding plants grown at short notice by Woodbeck Nursery, a municipal nursery
owned by Stockport Metropolitan Borough Council.
Glendale Leisure
The Leisure business remained stable through the period with a turnover of �
6.26 million (2001 : �6.20 million) and excellent operating profits of �0.78
million (2001 : �0.76 million). The new Mulberry School PFI (Private Finance
Initiative) project (see below) was added to its portfolio of facilities at the
end of the period, otherwise there were no new contract awards.
Marketing and Strategy
The Group's main Grounds Management and Leisure businesses have been managed
together and marketed under the Glendale brand since 1998. The opportunities
afforded by the funds available via Leisureplan should now allow the Leisure
business to grow rapidly from the levels of the last two - three years when
annual sales have remained in the region of �12-�13 million per annum. With the
PFI / PPP (Private Finance Initiative / Public Private Partnership)
opportunities in the local government leisure and cultural market estimated to
total �3 billion over the next 5 years, the Group's Leisure business is well
placed for the future.
It has, therefore, been decided to re-brand our Leisure business which will be
known as Parkwood Leisure from 2nd September 2002. The business will then
operate as a separate division, under the capable leadership of Paul Cluett,
its managing director. A new business development director post has been
created and filled by Ian Richards who joins the business from Esporta.
This separation now allows Glendale to become a distinctly "green" business and
we are pleased to announce that a "new" Glendale launched on the 2nd September
2002 will broaden the scope of its activities under a Think Green - Think
Glendale logo. Glendale will enter the golf management market, with the
creation of Glendale Golf; set up green waste recycling facilities with
Glendale Green Waste Recycling and will establish a horticultural trading
activity via Glendale Horticulture.
As a result of these new initiatives a new Managing Director has been recruited
for Glendale Golf, and Peter Woodward, previously with Ornamental Plants of
Southport, joined Glendale in August to develop the business of Glendale
Horticulture. Unfortunately Larry Jones, the Managing Director of Glendale
Grounds Management has recently announced his resignation and will be leaving
the Company on 2nd November 2002.
Parkwood Healthcare
Having produced a profit in the second half of 2001 Parkwood Healthcare has
again disappointingly produced losses. Turnover increased to �2.4 million (2001
: �1.66 million) largely as a result of the new patient transport contract with
St George's Hospital, Tooting, South London. Unfortunately, this contract has
not initially produced the profits expected and Parkwood Healthcare recorded a
loss of �74k (2001: �34k) in the period, despite the fact that the nursing
agency business, especially the Central London office in Bloomsbury, performed
well. Parkwood Healthcare is one of twenty-nine nursing agencies approved by
the London Agency Project.
Peter Marlow age 48 joined the company as its new Managing Director in May 2002
and brings considerable experience having worked previously both within the NHS
and for Westminster Healthcare. A new post of Director of Ambulance Services
has been created and recruitment for this position should be successfully
completed in the Autumn. This appointment is timely because in August 2002
Parkwood Healthcare signed its second major patient transport contract with the
Royal Free Hospital NHS Trust which will commence on 1st December 2002 for a
minimum period of five years at an annual value of �1.35 million.
Private Finance Initiative / Public Private Partnerships (PFI / PPP)
Our PFI / PPP team based at Stratford upon Avon and led by Mark Davies goes
from strength to strength. Parkwood's third successful PFI scheme, the Mulberry
School project reached financial close on 14th May 2002 and Glendale Managed
Services commenced service provision to the school on 1st June 2002. The
working relationship with the school and our consortium partners, the Miller
Group and HBOS is very good.
We remain as preferred bidder on the �25 million leisure project known as
Boxwood Leisure with the London Borough of Bexley with financial close still
expected later this year. A Leisureplan subsidiary, Saffron Leisure, will
submit its best and final offer (BAFO) to the London Borough of Croydon in
September for a �15 million investment in 3 centres at Purley, New Addington
and South Norwood.
In addition, four further bids, also under the Leisureplan arrangement are
being submitted to: Penwith Borough Council, for Penzance; Breckland Council
for Thetford and Dereham; Amber Valley Borough Council for Ripley, Heanor and
Alfreton, and the London Borough of Lewisham for a new leisure centre, library
and healthcare centre at Downham. The investments in projects that Leisureplan
is currently bidding for total around �100 million and if success were achieved
on all projects, would generate operating revenues totalling �12-�14 million
per annum for Parkwood.
Parkwood's PFI unit is also making progress in positioning the Group to take
advantage of major forthcoming Defence Projects including opportunities arising
under the Defence Training Review. We hope to be able to announce our inclusion
in consortium arrangements with major players in the defence sector shortly.
Funding and Cashflow
Net borrowings of �2.9 million at 30th June 2002 have reduced from �3.0 million
at 30th June 2001. This reduction has been achieved despite a further purchase
of �110k of the Company's own shares by the Parkwood Group Employee Benefit
Trust in the period. The Group showed a net cash outflow of �1.3 million but
this is in line with expectations, and results from the seasonal nature of the
Grounds Management business. We expect to see the normal substantial cash
inflow in the second half of the year.
Outlook
Parkwood Holdings is in a better shape than before, and the Group is
experiencing another satisfactory year. We are in a position to expand again
and push sales above the �50 million threshold next year, while increasing our
margins.
A W HEWITT
Executive Chairman
2nd September 2002
Financial Highlights
Interim Interim %
2002 2001 Change
Turnover �21.7m �20.5m + 6%
Operating Profit (before �0.65m �0.61m + 7%
goodwill
& joint venture losses )
Profit before Tax �0.51m �0.44m + 17%
Earnings per share (EPS) 1.81p 1.53p + 18%
EPS (before goodwill) 2.11p 1.82p + 16%
Dividends per share 0.9p 0.8p + 13%
Order Book �147m �132m + 11%
Gearing 71.8% 87.8% - 16%
Financial Calendar
Interim Dividend Paid October 2002
Full Year Results March 2003
Announced
Annual General Meeting May 2003
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
2002 2001 2001
(unaudited) (unaudited) (audited)
Restated
�000 �000 �000
Turnover 2 21,736 20,467 40,872
Net operating profit 3 596 551 1,522
Share of operating loss (13) - (9)
in joint ventures
Interest payable (69) (113) (172)
Profit on ordinary 2 514 438 1,341
activities before
taxation
Tax on profiton
ordinary activities 4 (175) (148) (454)
Profit on ordinary 339 290 887
activities after
taxation
Dividends 6 (158) (142) (377)
Retained profit 181 148 510
Earnings per share - 5 1.81p 1.53p 4.7p
basic
Earnings per share 5 2.11p 1.82p 5.3p
(before goodwill) -
basic
Earnings per share - 1.78p 1.52p 4.7p
diluted
Dividends per share 6 0.9p 0.8p 2.0p
Summary Group Balance Sheet
Notes At 30 June At 30 June At 31
2002 2001 December 2001
(unaudited) (unaudited) (audited)
Restated Restated
�000 �000 �000
Fixed assets
Intangible assets 564 679 620
Tangible assets 4,184 3,691 3,760
Investments 7 426 132 316
5,174 4,502 4,696
Investments in joint
ventures
Share of gross assets 1,962 - 939
Share of gross (1,958) - (923)
liabilities
4 - 16
Current assets
Stocks 479 453 419
Debtors 8,242 8,004 6,074
Cash at bank and in - - 386
hand
8,721 8,457 6,879
Creditors: amounts (8,627) (8,286) (6,669)
falling due within
one year
Net current assets 94 171 210
Total assets less 5,272 4,673 4,922
current liabilities
Creditors: amounts (1,182) (1,116) (1,013)
falling due after
more than one year
Provisions for (105) (115) (105)
liabilities and
charges
3,985 3,442 3,804
Capital and reserves
Called up share 10 196 196 196
capital
Capital redemption 10 401 401 401
reserve
Share premium account 10 2,227 2,227 2,227
Profit and loss 10 1,161 618 980
account
Equity Shareholders' 3,985 3,442 3,804
funds
Summary Group Cash Flow
Notes 6 Months Ended Year Ended
30 June 2002 30 June 31 December
2001 2001
(unaudited) (unaudited) (audited)
�000 �000 �000
Net cash inflow from 8 70 730 3,693
operating activities
Returns on
investments and
servicing of finance
Net interest (25) (54) (62)
Interest element of (44) (59) (110)
finance lease
payments
(69) (113) (172)
Taxation
UK corporation tax - - 7
paid
Capital expenditure
and
financial investment
Purchase of fixed (503) (464) (1037)
assets
Purchase of fixed - - (170)
asset investment
Sale of fixed assets 22 81 192
(481) (383) (1,015)
Acquisitions and
disposals
Purchase of business - (71) (294)
Cash acquired with - 70 70
business
Purchase of shares in - - 25
joint venture
undertaking
Purchase/(sale) of (110) - 18
own shares by
Employee Benefit
Trust
(110) (1) (231)
Equity dividends paid (225) (149) (299)
Net cash (outflow) / (815) 84 1,983
inflow before
use of liquid
resources and
financing
Financing
Capital element of (321) (383) (717)
finance lease rental
payments
Debt due within one
year:
Loan from director - (143) (143)
repaid
Purchase of own - (360) (360)
shares
Bank loan (repaid)/ (180) 360 180
received
(501) (526) (1,040)
(Decrease)/increase (1,316) (442) 943
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 2001, as amended by the adoption in this period of one new
financial reporting standard, FRS 19 Deferred Taxation, which the Group will
adopt in its full year accounts to 31 December 2002. The Group has elected not
to discount the deferred tax assets and liabilities.
The profit and loss account, balance sheet and reconciliation of movement in
consolidated shareholders' funds have been amended to reflect the adoption of
FRS 19. The prior period figures have been restated to reflect full provision
for deferred tax and timing differences. 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 2001 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.
2. Turnover and profit on ordinary activities before taxation
6 Months Ended Year Ended
30 June 2002 30 June 2001 31 December
2001
(unaudited) (unaudited)
(audited)
�000 �`000
�000
Turnover
Grounds 12,943 12,606 25,122
Management
Leisure 6,260 6,204 12,046
Managed 19,203 18,810 37,168
Services
Healthcare 2,400 1,657 3,704
Holding Company 133 - -
21,736 20,467 40,872
All Group turnover originated in the United Kingdom. Figures for June 2001 and
December 2001 have been restated to reflect the inclusion of the Countryside
Business within the Grounds Management Business.
6 Months Year Ended
Ended
30 June 2002 30 June 2001 31 December
2001
(unaudited) (unaudited)
(audited)
�000 �000
�000
Profit Before Tax
Grounds Management 919 827 2,121
Leisure 778 763 1,301
1,697 1,590 3,422
Divisional (785) (718) (1,439)
Overhead
Managed Services 912 872 1,983
Healthcare (74) (34) 1
Central Costs (255) (346) (525)
Share of Joint (13) - (8)
Venture Losses
Profit before 570 492 1,451
goodwill
Goodwill (56) (54) (110)
514 438 1,341
3. Analysis of Operating Profit
30 June 30 June Year Ended
2002 2001
(unaudited) (unaudited) 31 December
2001
�000 �000 �000
Operating profit 652 605 1,632
before
goodwill
Goodwill (56) (54) (110)
amortisation
Net operating 596 551 1,522
profit
4. Taxation
Corporation Tax for the current year is charged at 30% of profits before
goodwill and joint venture losses, which is the current expected rate for the
year ending 31 December 2002. The introduction of FRS 19 in the year ending 31
December 2002 is not expected to have a material impact on the Group's tax
charge.
5. 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 18,727,039 (2001:
18,962,973).
6. Dividends
The Board has declared an interim dividend of 0.9p per Ordinary share (2001:
0.8p). The dividend will be paid on 18 October 2002 to all shareholders
registered on 13th September 2002. The final dividend for 2001 was paid in May
2002.
7. Investments
Investments in own shares at 30 June 2002 of �236k comprise the holding of
931,625 shares in Parkwood Holdings Plc by Parkwood Group Trustees Ltd, the
corporate trustee of the Parkwood Group Employee Benefit Trust. At 30 June
2002, the market value of these shares was 66p per share, or �615k.
The other investment relates to the Group's 20% stake in Realm Services (DAC)
Limited of �190k.
8. Reconciliation of operating profit to net cash inflow from operating
activities
6 Months Ended Year Ended
30 June 30 June 31 December 2001
2002 2001
(unaudited) (unaudited) (audited)
�000 �000 �000
Net operating profit 596 551 1,522
Depreciation of tangible 751 690 1,413
fixed assets
Profit on sale of tangible (9) (25) (74)
fixed assets
Amortisation of intangible 56 54 110
assets
Amounts written off - 11 -
investments in own shares
(Increase)/decrease in (60) (7) 27
stocks
(Increase)/decrease in (2,168) (1,720) 401
debtors
Increase in creditors 904 1,176 294
Net cash inflow from 70 730 3,693
operating activities
9. Analysis of net debt
At 1 Cashflow Other non-cash At 30 June
January changes 2002
2002
�000 �000 �000 �000
Bank overdraft/ 386 (1,316) - (930)
cash at bank
Bank loan (180) 180 - -
Finance leases (1,568) 321 (684) (1,931)
(1,362) (815) (684) (2,861)
10. Share Capital and Reserves
Share Capital Share Profit & Loss
Capital Redemption Premium Account
Reserve Account
�000 �000 �000 �000
As at 1 196 401 2,227 1,085
January 2002
(as
previously
stated)
Prior year - - - (105)
adjustment
As at 1 196 401 2,227 980
January 2002
(restated)
Retained - - - 181
profit
At 30 June 196 401 2,227 1,161
2002
Reconciliation of movement in consolidated shareholders' funds
6 Months Ended Year Ended
30 June 30 June 31 December 2001
2002 2001
�000 �000 �000
Profit for the financial 339 290 877
period as previously reported
Effect of implementation of - - 10
FRS19 on the tax charge for
the period
Profit for the financial 339 290 887
period as restated
Dividends (158) (142) (377)
Redemption of shares - (360) (360)
Net increase/(reduction) in 181 (212) 150
shareholders' funds
Opening shareholders' funds 3,804 3,769 3,769
as previously reported
Effect of implementation of - (115) (115)
FRS19
Opening shareholders' funds 3,804 3,654 3,654
as restated
Closing shareholders' funds 3,985 3,442 3,804
END
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