TIDMPKW
Preliminary Results for the year ended 31 December 2008
Parkwood Holdings Plc, the public sector support services specialist,
announces its preliminary results for the year ended 31 December 2008.
Key points:
- Revenue increased by 16% to GBP120.3 million (2007 restated: GBP103.4 million)
- Operating profit on continuing operations before exceptional
items, amortisation and goodwill impairment declined to GBP3.0 million
(2007 restated: GBP4.0 million)
- Profit on continuing operations before tax, exceptional items,
amortisation and goodwill impairment fell to GBP2.3 million
(2007 restated: GBP3.5 million)
- Basic earnings per share on continuing operations decreased to 3.1 pence
(2007 restated: 8.8 pence)
- The company will not pay a final dividend in respect of the year
ended 31 December 2008.
- Order book GBP517 million (2007: GBP532 million)
- Leisure division achieved a record operating profit for the year
of GBP3.5 million (2007: GBP2.4 million)
- Glendale division restructured from January 2009 to improve
control and focus on profitability.
- Decision taken to seek a buyer for the equity and subordinated
debt in the Group's leisure SPCs. (Accordingly, the 2007 results have been
restated)
Tony Hewitt, Executive Chairman commented: -
"With the majority of its business in the public sector and a strong order
book, Parkwood is well placed to endure the current recession"
For further information please contact:
Tony Hewitt - Executive Chairman 01772 627111
Terry Bowman - Group Finance Director 01772 627111
Neil Baldwin - Brewin Dolphin Investment Bank 0113 241 0126
Notes to editors:
About Parkwood Holdings plc:
Parkwood Holdings plc specialise in providing outsourced and
support services, predominantly to the public sector across England, Wales and
Scotland 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, 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.
Parkwood Project Undertake PFI, PPP and similar bids on behalf
of joint ventures and the Group. Parkwood
Management Project Management is also responsible for
project management of contracts and the
management of other funds such as lifecycle
funds associated with the project agreements.
Parkwood Healthcare A broad healthcare business incorporating a
nursing agency, ambulance and patient
transport business and clinical and medical
services, dealing both with the NHS and the
private sector.
Chairman's Statement
The year ended 31 December 2008 has been a difficult period for
Parkwood with profit from continuing operations before taxation well below
expectations at GBP1.28 million. Profits in the Leisure division have been
offset by losses in Glendale, the `green services division' where investment
in new projects has failed to produce adequate returns. However, with the
majority of its business in the public sector and a strong order book,
Parkwood is well placed to endure the current recession.
Results
Group revenues on continuing activities increased by 16% to GBP120.3
million (2007 restated: GBP103.4 million). Profit on continuing activities
before tax, exceptional items, amortisation and goodwill impairment fell to
GBP2.32 million, (2007 restated: GBP3.49 million) with profit before taxation on
continuing activities being lower at GBP1.28 million (2007 restated: GBP2.59
million). Basic earnings per share on continuing operations decreased to 3.1p
(2007 restated: 8.8p).
Parkwood Leisure is now the most successful division within the
Group and generated operating profit before exceptional items, amortisation
and goodwill impairment of GBP3.53 million (2007: GBP2.4 million) on revenues of
GBP53.5 million, (2007: GBP42.5 million), whilst Glendale produced an operating
profit before exceptional items, amortisation and goodwill impairment of GBP0.14
million against GBP1.9 million in the previous year. This reduction in profits
was a result of poor trading in golf and horticulture and provisions for
disputes and expected write-offs. Parkwood Project Management, which is now
trading as Parkwood Consultancy Services, failed to match its previous year's
record performance and provided operating profits of GBP0.08 million (2007:
GBP0.30 million) on sales of GBP2.1 million (2007: GBP2.3 million). Operating losses
in the Parkwood Healthcare division were reduced to GBP0.36 million (2007: Loss
GBP0.6 million).
The Special Purpose Group of Companies holds the Group's
investments in PFI and PPP projects and consists of both wholly owned
subsidiaries and joint ventures. Total revenues in 2008 were GBP 8.8 million and
profits before tax of GBP 0.04 million were achieved.
Dividends
With cash constrained and profits reduced the Board has felt it
prudent not to pay a dividend in May, but expect to be in a position to pay a
dividend in October in line with the Company's policy. Total dividends paid
and charged in 2008 were 3.6p (2007: 3.2p).
Strategy and Order Book
Parkwood, like many businesses, is facing challenging times, but the strength
of its order book with the public sector, which stands at GBP517 million,
underpins its business. A new business plan for the years 2009 - 2011 has been
produced which focuses less on growth and concentrates on achieving a stronger
cash position and eliminating losses within individual businesses. Capital
investment plans have been reduced and Glendale has been restructured to allow
it to return to an acceptable level of profit.
Management and Board
I continue to serve as Chairman and Chief Executive. The Board has
reduced in size with the resignation of Nick Temple-Heald, the Chief Executive
of Glendale on 26 February 2009 and Terry Bowman, the Group Finance Director,
from 31 March 2009. A new Group Finance Director is being sought. Andrew Holt
continues as an executive director of the Group and Sarah Kling and Richard
Tolkien as non-executive directors. Additional non-executive directors have
been appointed to subsidiary company boards.
Staff
Staff numbers have increased to 5,600, equal to a full time equivalent of
3,250, with most of the increase once again taking place in the Leisure
Division. Wages and salaries in 2009 will account for GBP70 million but pay
rates have been frozen throughout the Group. Keeping morale high through
difficult times is one of my priorities for 2009. Parkwood's business is
community based and involves day-to-day activities, teaching children to swim,
running crèches, maintaining parks and gardens, taking people to hospital and
providing care services. Our staff take a pride in what they do, and being
actively involved in the communities in which they live provides a motivation
of its own. Once again, I congratulate everyone for the part they play in
providing these important services.
Outlook
Parkwood has a strong public sector base of customers and will manage its
affairs carefully in 2009 to ensure profits are restored to previous levels.
The sale of the equity and subordinates debt that the Group holds in leisure
related PFI/PPP investments is being pursued and is likely to put the Group in
a positive recourse funds position.
A W Hewitt
Executive Chairman
9 March 2009
Financial Review
Overview
The Group generated a profit from continuing operations (before tax,
exceptional items and amortisation and goodwill impairment) of GBP2.32 million
(2007 restated: GBP3.49 million) on revenues of GBP120.3 million (2007 restated:
GBP103.4 million). This resulted in a reduction in margin to 1.9% (2007
restated: 3.4%).
After taking account of exceptional costs relating to reorganisation and cost
savings within the Glendale division totalling GBP0.36 million, amortisation
charges of GBP0.50 million (2007: GBP0.18 million) and goodwill impairment charges
of GBP0.21 million (2007: GBP0.06 million), the Group recorded a pre-tax profit on
continuing activities of GBP1.28 million (2007 restated: GBP2.60 million).
The Group has taken the decision to seek a buyer for its SPCs in
the leisure market to release the value of these long-term investments. As a
result of this decision the related assets and liabilities are treated as
being `Held for Sale' on the balance sheet and the trading results are shown
as discontinued activities. Accordingly, the Group has restated the 2007
comparatives. In 2008 these leisure SPCs incurred a net loss after tax of
GBP0.19 million (2007 profit: GBP0.03 million).
Trading Performance
In order to assist with the understanding of overall Group performance the
following trading summary has been prepared from information contained within
the financial statements.
2008 2007 - Restated
GBP000 Revenue Adjusted¹ Revenue Adjusted¹
Operating Operating
Profit Profit
Trading Group
Glendale 59,997 138 54,274 1,931
Leisure 53,530 3,533 42,549 2,423
Healthcare 4,763 (363) 6,002 (600)
PCS 2,108 83 2,281 311
Central Costs 1,858 (1,261) - (524)
Inter segment (3,228) - (2,508) -
elimination
119,028 2,130 102,598 3,541
SPC Group
Subsidiaries 1,257 894 813 513
120,285 3,024 103,411 4,054
1 Adjusted operating profit - profit from continuing operations
before exceptional items, amortisation and goodwill impairment.
This highlights the strong performance of the Parkwood Leisure
division, which achieved record adjusted operating profits in the year.
However, the poor trading within Glendale's Golf and Horticulture businesses,
which resulted in substantial losses, and losses in the Scottish business of
Glendale Countryside produced a 90% fall in the `Green division's adjusted
operating profit. The core Grounds Management business of the division
contributed strong profit performance.
Healthcare incurred a similar operating loss to 2007 after
adjusting for the utilisation of part of the onerous contract provision for
the patient transport contract in the North Midlands. This contract is due to
end in July of 2009 and it is anticipated that losses will not exceed the
level of provision made in 2007.
PCS saw profits decline in 2008 as it completed only one large project
compared to two in 2007.
The level of unrecovered central group costs increased as the basis for
recharge to divisions changed in the year. The underlying level of central
costs has not increased significantly in the year.
The SPC Group, within continuing operations, now comprises only
Realm DAC Services following the decision by the Group to sell its
shareholdings in these companies. Realm continued to generate strong operating
profits. Interest charges reduced pre-tax profit to GBP0.31 million, although
this was double the 2007 result.
Finance Costs
Net finance costs (including investment income) increased to GBP0.70 million
(2007 restated: GBP0.57 million) as the Group incurred a full year charge for
the borrowings related to the acquisition of IMDAC Limited in May 2007.
Finance costs for the SPC Group increased to GBP0.58 million (2007
restated: GBP0.37 million) as a result of the full year effect of Realm becoming
a wholly owned subsidiary in May 2007.
The Trading Group incurred reduced finance costs of GBP0.14 million
(2007: GBP0.19 million) as it benefited from reduced borrowing costs during the
year as base rate fell. Interest on recourse borrowing was covered 7 times
(2007: 14 times) whilst non-recourse interest cover was <1 times (2007
restated: <1 times). Overall interest cover was 2.8 times (2007 restated: 5.6
times).
Amortisation and Goodwill Impairment
The Group incurred a GBP0.50 million amortisation charge in the year
(2007: GBP0.17 million). This reflects the full year impact of the amortisation
of the fair value attributed to the contracts acquired in 2007 with the
acquisition of IMDAC Limited and DPL Holdings Limited.
The charge for goodwill impairment of GBP0.18 million represents the
writing off of the remaining carrying value of goodwill relating to the
acquisition of Coblands Nurseries (renamed Glendale Horticulture in January
2009) in the light of continuing losses within the business. The 2007 charge
of GBP0.06 million related to the Healthcare division patient transport
business.
Taxation
The Group's effective tax rate on continuing operations for 2008 was 56.0%
(2007: 32.9%). This higher than normal rate resulted from non allowable
amortisation and goodwill impairment charges, the release of a deferred tax
asset and depreciation associated with non-qualifying assets. The goodwill
impairment charge and deferred tax asset release are both related to Coblands
Nurseries and resulted in a 13% addition to the standard charge of 28.5%. The
non-qualifying assets added 17% to the charge.
Corporation tax payable on 1 October 2009 amounts to GBP0.13 million (2007:
GBPnil).
Pensions
The last formal triennial valuation of the Citrus (formerly LAWDC)
defined benefit pension scheme (the Scheme) of which certain Group companies
are members, took place on 31 March 2006. The valuation was updated for IAS 19
purposes at the end of December 2008. This revaluation saw a further reduction
in the deficit to GBP0.62 million (2007: GBP0.79 million).
The pension charge for the year in respect of the Scheme amounted
to GBP0.66 million (2007: GBP0.73 million). Contributions to the Group's defined
contribution scheme amounted to GBP0.53 million (2007: GBP0.49 million). Certain
employees, who were previously members of the local Government Pension Scheme
(LGPS) prior to employment by the Group, have continued to participate in the
benefits of this defined benefits scheme under arrangements known as Admitted
Body Status. Pension contributions are paid by the employing subsidiary in
accordance with the advice of the relevant LGPS actuary. The Group has no
further responsibility to fund the LGPS scheme beyond the contributions
payable each year. In 2008 these contributions amounted to GBP0.29 million
(2007: GBP0.25).
Funding and Gearing
The following summary balance sheet provides an illustration of the impact of
the PFI/PPP ventures on the Group's balance sheet by analysing assets and
liabilities between the recourse Trading Group and the non-recourse SPC Group.
GBP000s Recourse Recourse Non Recourse Non Recourse TOTAL TOTAL
2008 2007 2008 2007 2008 2007
Non Current assets 25,883 22,135 29,044 29,842 54,927 51,977
Investments in JVs
Sub debt held in JVs 1,032 826 - - 1,032 826
Share of net liabilities of JVs - 0 (3,069) (3,147) (3,069) (3,147
1,032 826 (3,069) (3,147) (2,037) (2,321)
Total non current assets 26,915 22,961 25975 26695 52890 49656
Current assets
Inventories and debtors 20,366 17,880 2,595 2,219 22,961 20,099
Cash at bank and in hand 282 1,239 2,086 3,861 2,368 5,100
Total current assets 20,648 19,119 4,681 6,080 25,329 25,199
Current liabilities (30,096) (24,122) (1,799) (3,881) (31,895) (28,003)
Net current (liabilities)/assets (9,448) (5,003) 2,882 2,199 (6,566) (2,804)
Non current liabilities
Bank loans (3,486) (4,459) (28,004) (28,947) (31,490) (33,406)
Other long term liabilities (6,361) (5,550) (2,426) (1,186) (8,787) (6,736)
Net assets 7,620 7,949 (1,573) (1,239) 6,047 6,710
Net debt 7,517 7,632 14,847 34,718
Gearing 99% 96% 246% 517%
Note: the above table includes the Disposal Group assets and liabilities
within the non recourse section.
The SPC Group is classified as non-recourse as Parkwood is not
liable for any debt, which an SPC may be unable to service. The senior debt
providers secure their investment by way of a charge over the tangible assets
of the SPC and its contracts with the ultimate client.
The fall in overall net debt to GBP14.8 million (2007: GBP34.7 million) reflects
repayments of senior debt within the SPC group and the reclassification of
certain non-recourse assets and liabilities into the disposal group.
PFI/PPP Investments
The Group's investments (at cost) in equity and subordinated debt in the SPCs
are analysed in the following table. As stated above, the Group has taken the
decision to seek a buyer for its leisure SPC investments. The underlying
assets and liabilities are reported in the balance sheet in current assets and
current liabilities as `Held for Sale'.
Ownership Investment in
equity and
% subordinated
debt
GBP000
Leisure SPCs: -
Boxwood 50.0 448
Breckland 100.0 1,711
Mulberry 12.5 41
Penzance 50.0 192
Rivendell 100.0 1,152
Waterfront 50.0 399
3,943
Other: -
Realm 100.0 2,649
6,592
DBOM (design, build, operate and maintain) Activities
The Group has moved into this new area of developing leisure
facilities in 2008. Unlike the PFI/PPP market, funding is provided by the
local authority client under the Prudential Code. As such there is no impact
on the Group's debt other than through working capital in the normal course of
business. The underlying assets and related funding do not appear on the
Group's balance sheet as ownership is retained by the client authority. The
DBOM market is used by the Group to obtain longer term operating contracts for
the Leisure division.
CONSOLIDATED INCOME STATEMENT
Year Ended 31 December 2008
2008 2008 2008 2007 - 2007 - 2007 -
Before Restated Restated Restated
exceptional Exceptional Before
items, items, exceptional Exceptional
amortisation amortisation items, items,
& goodwill & goodwill amortisation amortisation
impairment impairment Total & goodwill & goodwill
GBP000 GBP000 GBP000 impairment impairment Total
GBP000 GBP000 GBP000
Revenue (note 4) 120,285 - 120,285 103,411 - 103,411
Less: share of joint - - - -
ventures' revenue - -
Group revenue 120,285 - 120,285 103,411 - 103,411
Cost of sales (88,932) - (88,932) (75,715) - (75,715)
Gross profit 31,353 31,353 27,696 - 27,696
Administrative expenses (28,329) (1,042) (29,371) (23,626) (898) (24,524)
3,024 (1,042) 1,982 4,070 (898) 3,172
Share of results of - - - (16) - (16)
associate
Share of results of - - - - - -
joint ventures
Operating profit (note 3,024 (1,042) 1,982 4,054 (898) 3,156
4)
EBITDA 7,381 (360) 7,021 7,760 (660) 7,100
Depreciation (4,357) - (4,357) (3,706) - (3,706)
Amortisation - (498) (498) - (174) (174)
Impairment of goodwill - (184) (184) - (64) (64)
Operating profit 3,024 (1,042) 1,982 4,054 (898) 3,156
Investment income 595 - 595 453 - 453
Finance costs (1,299) - (1,299) (1,018) - (1,018)
Profit before taxation
from continuing
operations 2,320 (1,042) 1,278 3,489 (898) 2,591
Taxation (note 5) (716) (939)
Profit for the year from
continuing operations 562 1,652
Discontinued operations
Profit for the year from
discontinued operations
(note 3) (193) 25
Profit for the year 369 1,677
attributable to equity
shareholders
Earnings per share (note
7)
Basic earnings per share
From continued 3.1p 8.8p
operations
From discontinued (1.1p) 0.1p
operations
2.0p 8.9p
Diluted earnings per
share
From continued 3.1p 8.7p
operations
From discontinued (1.0p) 0.1p
operations
2.1p 8.8p
CONSOLIDATED BALANCE SHEET
As at 31 December 2008
2008 2007
GBP000 GBP000
Non-current assets
Goodwill 2,364 2,521
Intangible asset 4,752 4,941
Property, plant and equipment 21,940 43,750
Interests in joint ventures - 12
Derivative financial instruments - 303
Trade and other receivables 139 142
Deferred tax asset - 320
29,195 51,989
Current assets
Inventories 3,750 3,624
Trade and other receivables 17,102 16,475
Cash and cash equivalents 1,109 5,100
21,961 25,199
Assets of disposal group classified as held-for-sale
(note 3) 29,101 -
51,062 77,188
Total assets 80,257 77,188
Current liabilities
Trade and other payables 25,399 23,270
Current tax liabilities 2,657 371
Obligations under finance leases 1,540 1,982
Borrowings 1,313 2,380
30,909 28,003
Liabilities of disposal group classified as
held-for-sale (note 3) 28,187 -
59,096 28,003
Non-current liabilities
Borrowings 11,302 33,406
Retirement benefit obligations 621 788
Long-term provisions 171 1,105
Obligations under finance leases 1,800 2,050
Derivative financial instruments 110 230
Interests in joint ventures - 2,333
Deferred tax liability 1,110 2,563
15,114 42,475
_____________ ______________
Total liabilities 74,210 70,478
Net assets 6,047 6,710
CONSOLIDATED BALANCE SHEET
As at 31 December 2008
2008 2007
GBP000 GBP000
Equity
Share capital 189 193
Share premium account 2,227 2,227
Investment in own shares (729) (350)
Capital redemption reserve 408 404
Hedging reserve (131) (82)
Revaluation reserve 819 896
Retained earnings 2,688 3,420
5,471 6,708
Amounts recognised directly in equity relating to
assets classified as held for sale (Hedging reserve) 574 -
Equity attributable to equity holders of the parent 6,045 6,708
Minority interest in equity 2 2
Total equity 6,047 6,710
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 December 2008
2008 2007
GBP000 GBP000
Net cash from operating activities 10,036 5,802
Cash flows from investing activities
Interest received 746 522
Dividends received from associate and joint ventures - 482
Proceeds on disposal of property, plant and equipment 25 60
Purchases of property, plant and equipment (4,719) (10,375)
Subordinated debt repaid by joint ventures 6 351
Subordinated debt invested in subsidiary on
acquisition (208) (661)
Proceeds from refinancing - 1,773
Sale of own shares by employee benefit trust 7 90
Acquisition of subsidiary (net of cash acquired) - (1,500)
Net cash used in investing activities (4,143) (9,258)
Cash flows from financing activities
Interest paid (3,043) (1,409)
Dividends paid (678) (605)
Acquisition of shares by employee benefit trust (10) (128)
Acquisition of treasury shares (828) (326)
Repayments of obligations under finance leases (1,595) (1,718)
Proceeds from new recourse bank loans - 2,400
Proceeds from new non-recourse bank loans - 7,362
Repayments of recourse bank loans (380) (287)
Repayments of non-recourse bank loans (2,091) (359)
Net cash from financing activities (8,625) 4,930
Net increase in cash and cash equivalents (2,732) 1,474
Cash and cash equivalents at beginning of the year 5,100 3,626
Cash and cash equivalents at end of the year 2,368 5,100
Comprising:
Cash 2,368 5,100
RECONCILIATION OF NET CASHFLOW MOVEMENT TO NET DEBT
Year ended 31 December 2008
2008 2007
GBP000 GBP000
(Decrease)/Increase in cash in the year (2,732) 1,474
Cash outflow from reduction in debt and lease 1,595 1,718
financing
Movement on bank loans 2,471 (18,178)
Reclassification to disposal group held for sale 19,440 -
Finance leases acquired with subsidiary - (629)
Change in net debt resulting from cashflows 20,774 (15,615)
New finance leases (903) (1,938)
Increase in net debt 19,871 (17,553)
Net debt at 1 January (34,718) (17,165)
Net debt at 31 December (14,847) (34,718)
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Year ended 31 December 2008
2007 2006
GBP000 GBP000
Actuarial gains/(losses) on defined benefit pension (91) 492
schemes
Deferred tax relating to actuarial gains and losses on 25 (166)
defined benefit pension schemes
Gains/(losses) on cash flow hedges (69) (41)
Gains/(losses) on cash flow hedges held for sale 798 (73)
Deferred tax relating to losses on cash flow hedges 19 12
Deferred tax relating to losses on cash flow hedges held (223) 20
for sale
Net income recognised directly in equity 459 244
Profit for the year 369 1,677
Total recognised income for the year attributable to 828 1,921
equity shareholders
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 3 April 2009. In
accordance with IFRS 5 and the Group's decision to classify certain trade and
assets as discontinued, the Group has restated its comparatives and associated
notes within its consolidated income statement and SORIE as required. The
accounting policies used in preparation of this preliminary announcement have
remained unchanged from those set out in the Group's 2007 annual report and
financial statements and are consistent with those in the full financial
statements which have yet to be published. The preliminary results for the
year ended 31 December 2008 were approved by the board of directors on 9 March
2009.
The financial information set out above does not constitute the Group's
statutory accounts for the year ended 31 December 2008 or 2007 as detailed in
section 240 of the Companies Act 1985, but is derived from those accounts.
Statutory accounts for 2007 under IFRS have been delivered to the Registrar of
Companies and those for the year ended 31 December 2008, 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. Going Concern
The Group meets its day-to-day working capital requirements through an
overdraft facility, which is due for renewal on 31 May 2009. The current
economic conditions create uncertainty over the level of demand for the
Group's services, particularly outside its public sector client base, and the
availability of bank finance in the foreseeable future.
The Group's forecasts and projections, which have been prepared for the period
ending 31 March 2010 and taking account of reasonably possible changes in
performance, show that the Group should be able to operate within the level of
its current facility. The Group is holding discussions with its bankers about
its future borrowing needs and, at this stage, has no reason to believe that
the existing facility will not renewed.
After making reasonable enquiries, the directors have a reasonable expectation
that the Company and the Group have adequate resources to continue in
operational existence for the foreseeable future. Accordingly they continue to
adopt the going concern basis in preparing the annual reports and accounts.
3. Assets of disposal group classified as held-for-sale and discontinued
operations
On 4 December 2008, the board of directors agreed to seek a buyer for the
Group's wholly owned SPCs Breckland Leisure Limited and Rivendell Leisure
Limited, the 50% holdings in the joint ventures Waterfront Leisure (Crosby)
Limited, Boxwood Holdings Limited and Penzance Leisure Limited and the Group's
investment of 12.5% in D4E (Mulberry) Holdings Limited. The Group is actively
seeking a buyer for the above and expects to complete the sale in 2009. On
initial classification of these operations as held for sale, the Group has not
recognised any impairment losses.
2008 2007
Profit for the year from discontinued operations GBP000 GBP000
Revenue 5,587 4,685
Less: share of joint ventures revenue (2,395) (2,288)
3,192 2,397
Expenses (3,449) (2,605)
Share of results of joint ventures 78 116
Profit before tax (179) (92)
Tax (14) 117
Profit for the year from discontinued operations (193) 25
2008 2007
Cash flows from discontinued operations GBP000 GBP000
Net cash flows from operating activities 1,796 (691)
Net cash flows from investing activities (453) (5,668)
Net cash flows from financing activities (3,378) 7,022
Net cash flows (2,035) 663
2008 2007
Assets of disposal group classified as held for sale: GBP000 GBP000
Property, plant & equipment 21,698 -
Interests in joint venture 1 -
Derivative financial asset 4,033 -
Trade and other receivables 234 -
Corporation tax 1,876 -
Cash & cash equivalents 1,259 -
Total 29,101 -
2008 2007
Liabilities of disposal group classified as held for sale: GBP000 GBP000
Trade and other payables 465 -
Borrowings 20,699 -
Interest in joint ventures 2,038 -
Derivative financial liabilities 3,121 -
Deferred tax liabilities 1,864 -
Total 28,187 -
Cumulative income and expense recognised directly in equity relating to
disposal group classified as held for sale
2008 2007
GBP000 GBP000
Gains on cash flow hedges 574 -
4. 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:
2008 2007
Continuing operations GBP000 GBP000
Provision of services to local authorities - Grounds 50,990 44,772
management and parks
Horticultural revenue 3,781 3,740
Tree moving revenue 741 1,056
Golf course management, including retail sales 4,485 4,706
Provision of services to local authorities - Leisure 51,386 40,834
facility management
Private health and fitness club revenue 2,144 1,714
Provision of patient transport services 2,700 4,393
Nursing agency revenue 1,851 1,609
LINK revenue 212 -
Project and bid management fees 2,108 2,282
Service charges made by PFI companies 5,572 2,446
Inter-segment revenue (5,685) (4,141)
120,285 103,411
Discontinued operations
Service charges made by PFI companies 3,192 2,397
4. Business Segments (Continued)
Non-recourse
Year ended Glendale Leisure Healthcare PPM SPCs Other* Discontinued Consolidated
Operations
31 December 2008 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
External revenue 57,625 51,489 4,763 836 3,714 1,858 - 120,285
Inter-segment revenue 2,372 2,041 - 1,272 (2,457) (1,858) (1,370) -
Revenue 59,997 53,530 4,763 2,108 1,257 - (1,370) 120,285
Operating profit/(loss)
before exceptional
items, amortisation and
goodwill impairment 138 3,533 (363) 83 894 (1,261) - 3,024
Amortisation and
goodwill impairment (269) - - - (413) - - (682)
Exceptional item (354) - - - - (6) - (360)
Operating profit/(loss) (485) 3,533 (363) 83 481 (1,267) - 1,982
Net finance costs and
other income (723) (97) (20) 46 (581) 671 - (704)
Profit / (loss) before (
tax (1,208) 3,436 (383) 129 (100) (596) - 1,278
Taxation (716)
Profit after tax from
continuing operations 562
Discontinued operations (193)
Profit for the year 369
* Other segment represents Other SPCs and Central Costs
Non-recourse
Year ended Glendale Leisure Healthcare PPM SPCs Other* Discontinued Consolidated
Operations
31 December 2007 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
External revenue 52,716 40,782 6,002 1,465 2,446 - - 103,411
Inter-segment revenue 1,558 1,767 - 816 (1,633) - (2,508) -
Revenue 54,274 42,549 6,002 2,281 813 - (2,508) 103,411
Segment result 1,931 2,423 (600) 311 529 (524) - 4,070
Share of results of
associate - - - - (16) - - (16)
Operating profit/(loss)
before exceptional
items, amortisation and
goodwill impairment 1,931 2,423 (600) 311 513 (524) - 4,054
Amortisation and
goodwill impairment (35) - (64) - (139) - - (238)
Exceptional item - - (660) - - - - (660)
Operating profit/(loss) 1,896 2,423 (1,324) 311 374 (524) - 3,156
Net finance costs and
other income (455) (123) (182) 97 (371) 469 - (565)
Profit / (loss) before
tax 1,441 2,300 (1,506) 408 3 (55) - 2,591
Taxation (939)
Profit after tax from
continuing operations 1,652
Discontinued operations 25
Profit for the year 1,677
4. Business Segments (Continued)
Non-recourse
SPCs
Year ended Glendale Leisure Healthcare PPM Other Consolidated
31 December 2008 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Segment assets 29,421 17,968 899 9,227 8,658 (15,017) 51,156
Investment in joint
ventures - - - - - - -
29,421 17,968 899 9,227 8,658 (15,017) 51,156
Assets of disposal group
classified as
held-for-sale - - - - - 29,101 29,101
Total assets 29,421 17,968 899 9,227 8,658 14,084 80,257
Segment liabilities (26,433) (12,837) (1,565) (7,038) (10,051) 11,900 (46,024)
Share of liabilities in -
joint ventures - - - - - -
(26,433) (12,837) (1,565) (7,038) (10,051) 11,900 (46,024)
Liabilities of disposal
group classified as
held-for-sale - - - - - (28,186) (28,186)
Total liabilities (26,433) (12,837) (1,565) (7,038) (10,051) (16,286) (74,210)
Net assets 2,988 5,131 (666) 2,189 (1,393) (2,202) 6,047
Capital additions 4,268 657 28 36 8 104 5,101
Amortisation of
intangible assets 85 - - - 413 - 498
Impairment of goodwill 184 - - - - - 184
Depreciation 2,518 1,076 146 22 475 120 4,357
Non-recourse
SPCs
Year ended Glendale Leisure Healthcare PPM Other Consolidated
31 December 2007 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Segment assets 29,240 15,555 657 9,041 36,037 (13,354) 77,176
Investment in joint
ventures - - - - 12 - 12
Total Assets 29,240 15,555 657 9,041 36,049 (13,354) 77,188
Segment liabilities (24,637) (12,136) (1,495) (7,047) (37,687) 14,857 (68,145)
Share of liabilities in
joint ventures - - - - (2,333) - (2,333)
Total liabilities (24,637) (12,136) (1,495) (7,047) (40,020) 14,857 (70,478)
Net assets 4,603 3,419 (838) 1,994 (3,971) 1,503 6,710
Capital additions 2,757 2,185 64 16 7,380 193 12,595
Amortisation of
intangible assets 35 - - - 139 - 174
Impairment of goodwill - - 64 - - - 64
Depreciation 2,198 925 165 18 654 93 4,053
5. Taxation
The effective tax rate for the year has increased to 56% (2007: 36%). The
current year charge was higher than the basic UK rate due to the impact of
goodwill impairment, the release of a deferred tax asset and ineligible
depreciation associated with non-qualifying assets in the group.
6. Other reserves
Investment Capital
Share in own redemption Hedging Revaluation Retained
premium shares reserve reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Group
Balance at 1 January 2007 2,227 (339) 401 - - 2,321 4,610
Actuarial gains on defined
benefit pension schemes
(net of tax) - - - - - 326 326
Fair value losses on cash
flow hedges (net of tax) - - - (82) - - (82)
Profit for the year - - - - - 1,677 1,677
Total recognised income
for the year - - - (82) - 2,003 1,921
Cancellation of treasury
shares - 353 3 - - (353) 3
Purchase of treasury
shares - (326) - - - - (326)
Purchase of employee
benefit trust shares - (128) - - - - (128)
Shares disposed of on
exercise of options - 90 - - - - 90
Share based payments - - - - - 7 7
Tax related to share based
payments - - - - - 22 22
Fair value of assets held
in previously equity
accounted investment - - - - 921 - 921
Transfer to retained
earnings - - - - (25) 25 -
Dividends - - - - - (605) (605)
Balance at 31 December
2007 2,227 (350) 404 (82) 896 3,420 6,515
Actuarial gains on defined
benefit pension schemes
(net of tax) - - - - - (66) (66)
Fair value losses on cash
flow hedges (net of tax) - - - 525 - - 525
Profit for the year - - - - - 369 369
Total recognised income
for the year - - - 525 - 303 828
Cancellation of treasury
shares - 449 4 - - (449) 4
Purchase of treasury
shares - (838) - - - - (838)
Shares disposed of on
exercise of options - 10 - - - - 10
Share based payments - - - - - 28 28
Tax related to share based
payments - - - - - (13) (13)
Transfer to retained
earnings - - - - (77) 77 -
Dividends - - - - - (678) (678)
Balance at 31 December
2008 2,227 (729) 408 443 819 2,688 5,856
7. 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 2008 of
18,286,948 shares (2007: 18,860,068 shares). Earnings, which are based on
profits on all activities after tax from continuing operations, amounted to
GBP562,000 (2007 restated: GBP1,652,000). The weighted average number of ordinary
shares used to calculate diluted EPS has been adjusted for the conversion of
share options.
2008 2007 - Restated
Weighted Weighted
average average
number of Earnings number of Earnings
shares per shares per
Earnings share Earnings share
GBP000 (Pence) GBP000 (Pence)
Basic earnings per share 562 18,286,948 3.1 1,652 18,860,068 8.8
Amortisation of intangible 498 2.7 174 - 0.9
assets
Impairment of goodwill 184 1.0 64 - 0.3
Net Exceptional items 360 2.0 660 - 3.5
Adjusted basic earnings
per share from continuing
operations 1604 18,286,948 8.8 2,550 18,860,068 13.5
Effect of dilutive 71,150 143,787
securities: options
Diluted earnings per share
from continuing operations 562 18,358,098 3.1 1,652 19,003,855 8.7
Basic earnings per share
from discontinued
operations (193) 18,286,948 (1.1) 25 18,860,068 0.1
Diluted earnings per share
from discontinued
operations (193) 18,358,098 (1.0) 25 19,003,855 0.1
The Group discloses separately in the financial statements those
material one-off items and expenses which, because of their size or nature,
merit separate disclosure to allow shareholders to better understand the
elements of financial performance during the year and to facilitate comparison
with prior periods. As a result, the Group also shows "adjusted" basic
earnings per share in the above table.
8. Annual Report
The Annual Report will be posted to shareholders on or around 3
April 2009. Copies will also be available from the company's 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
END
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