PARKWOOD HOLDINGS PLC
ANNOUNCEMENT OF PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2003
Parkwood Holdings plc, the public sector support services specialist, announces
its preliminary results for the yearended 31 December 2003.
Financial Highlights:
* Turnover (excluding joint ventures) increased by 12% to �51 million (2002:
�45 million)
* Operating profit before goodwill amortisation* of �0.91 million (2002: �
1.55 million)
* Profit before taxation of �0.60 million (2002: �1.29 million)
* Earnings per share before goodwill amortisation* of 2.9 pence (2002: 5.2
pence)
* Dividend for the year maintained at 2.2 pence per share (final dividend for
the year 1.3pence per share)
* Group order book increased to �230 million (2002: �166 million)
Key Events:
* Growth in Parkwood Leisure offset by poor results in Parkwood Healthcare
and a difficult start for some new contracts in Glendale.
*Structuring of the Glendale business into four regions to support
anticipated future growth and creation of separate support functions for
the Glendale and Leisure businesses
* Financial close on two leisure PFI/PPPs, with the London Borough of Bexley
completed in June 2003 and since the year end Penzance District Council in
March 2004
Tony Hewitt, Executive Chairman, commented:
"Parkwood did not achieve the growth in profits that we had hoped for last year
but will consolidate its financial position in 2004 and continue to strive
towards satisfying all stakeholders for the long term".
For further information, please contact:
Parkwood Holdings plc
Tony Hewitt, Executive Chairman 01772 627111
Charles Bithell, Finance Director 07717 630531
* goodwill amortisation - �133,000 (2002: �126,000)
Notes for Editors:
Parkwood Holdings plc specialises in providing outsourced services to the
public sector across the UK under long term contracts. Its three main areas of
operation are as follows:
* Glendale - The management of parks and open spaces for a predominantly
local authority client base. This operation is currently being expanded
into related "green" businesses under the "Think Green - Think Glendale"
strapline.
* Parkwood Leisure - The management of a diverse range of leisure facilities,
again predominantly for local authority clients. This Division is also the
beneficiary of most of the Group's contracts won under the PFI/PPP
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 both NHS Trusts and the private
sector.
* Parkwood PFI Projects - The provision of PFI, PPP and other similar bids on
behalf of Joint Ventures and the Group, generating long term operating
business. This division is also responsible for the project management of
contracts on behalf of the Group's associates and JVs and management of
other funds such as the lifecycle funds associated with the project
agreements.
Parkwood Holdings plc
PRELIMINARY RESULTS FOR THE YEAR TO 31 DECEMBER 2003
CHAIRMAN'S STATEMENT
2003 was another year of mixed fortune for Parkwood with profits before tax of
only �603,000. Nevertheless the year was one of continued investment in the
future with new businesses started and existing business reorganised for
further growth.
Results
Group sales increased to �51 million from �45 million in 2002. Operating
profits were �781,000 against �1.42 million in the previous year. This poor
performance was the result of heavy continued losses in the Healthcare
division, a difficult start for some new contracts in Glendale, the Group's
`green' service business and �0.25 million of costs relating to business
development and restructuring.
Thereduction in profits had an impact on the Group's return on capital
employed* which fell to 16% against 24% in 2002. Operating cashflows were also
affected with a net cash outflow for the year of �235,000. Gearing at the year
end consequently rose to 67% from 50% at the previous year end.
Dividends
The Board considers it appropriate to honour its commitment to maintain the
payment of a final dividend of 1.3p per share which will be paid on 4th June
2004 to all shareholders on the register on 7th May 2004. The full year
dividend for 2004 will therefore be 2.2p per share the same as in the year
ended December 31st 2002. The Board has also discussed its future dividend
policy and decided that dividend payments should more closely reflect the
recent and expected performance of the Group, which could therefore result in a
lower dividend payment next year.
Order Book and Prospects
Parkwood found success in the public sector in the early 1990's as a result of
compulsory competitive tendering which later developed into `best value'
procurement. Public private partnerships in recent years have helped the Group
to develop complex linkages with funders, architects, builders, advisors and
specialist consultants and to capture operating contracts for its subsidiaries,
providing development and project management fees, and investment income for
the future. This strategy will provide long term benefits. Some PFI project
management arrangements are in place for 25 years, with refinancing gains and
long term investment returns from these contracts yet to accrue to the Group.
The Group's forward order book increased significantly during the year from �
166 million to �230 million both as a result of signing new PFI contracts in
the leisure sector and the award of new contracts within the Group's `green'
business, Glendale. Sales of around �55 million are already secured for 2004.
Currently Parkwood holds 68 term contracts, of which 4 are with private sector
clients. While the Group will remain primarily a provider of services to the
public sector where the market remains buoyant, it will also seek to increase
its presence in the private sector over the next few years.
Parkwood's investment in PFI and project management is assured and has again
beenrewarded by the Group's defence special purpose vehicle, known as Realm,
being short-listed for its largest PFI to date with the Ministry of Defence for
the rebuilding of the Defence Communication Headquarters.
In our operating companies there are newopportunities to expand further,
particularly in Parkwood Leisure. Glendale has renewed vitality and aims to be
the largest `green' service provider in its sector. Only in Parkwood's
Healthcare division are we less certain about the future, but even here affairs
are more settled.
Management and Board
Charles Bithell joined the Group Board as Finance Director at the end of 2003.
Charles, aged 35, qualified with Deloitte & Touche in London and joined
Parkwood from Acal plc where he held a number of roles including Group
Financial Controller, Group Company Secretary and Subsidiary Company Finance
and Operations Director.
Mark Davies, the director of our PFI unit resigned in July and was replaced by
Sarah Hughes-Clarke, previously a senior employee within the Group who rejoined
Parkwood in September to head up the unit.
Elsewhere, 2003 saw significant changes in the composition of the senior team
in the `green' business of Glendale and the board of directors for that
division was strengthened in September. The new directors of Parkwood
Healthcare appointed in May 2003 have worked extremely hard and successfully to
good effect.
Staff
At peak times, staff numbers exceeded 2,400 including agency, part-time and
casual employees. Four hundred and twenty people joined the Group on 1st
September 2003 as a result of the commencement of the management of all the
leisure centres in the London Borough of Bexley. All our staff are to be
congratulated for their wonderful efforts in providing so many important
services to the communities in which they live.
Outlook
Parkwood did not achieve the growth in profits that we had hoped for last year
but will consolidate its financial position in 2004 and continue to strive
towards satisfying all stakeholders for the long term.
A W Hewitt
Executive Chairman
19 March 2004
* - Return on capital employed is derived from PBIT divided by net assets
excluding net debt
PARKWOOD HOLDINGS PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the Year Ended 31 December 2003
2003 2002
�000 �000
Turnover: Group and share of joint ventures 51,329 45,030
Less: share of joint ventures turnover (720) -
Group Turnover - continuing operations 50,609 45,030
Cost of sales (39,362) (33,716)
Gross profit 11,247 11,314
Administrative expenses (10,466) (9,893)
Group operating profit before goodwill amortisation 914 1,547
Goodwill amortisation (133) (126)
Group operating profit 781 1,421
Share of operating profit /(loss) in
- Joint ventures 122 (59)
- Associated Undertakings 236 189
358 130
Total operating profit - continuing operations 1,139 1,551
Net interest payable and similar charges
- Group (143) (139)
- Joint Ventures (253) -
- Associated Undertakings (140) (118)
(536) (257)
Profit on ordinary activitiesbefore taxation 603 1,294
Tax on profit on ordinary activities (187) (446)
Profit on ordinary activities after taxation 416 848
Dividends paid and proposed (396) (401)
Retained profit for the year transferred to 20 447
reserves
Earnings per share - basic 2.2p 4.5p
Earnings per share before goodwill - basic 2.9p 5.2p
Earnings per share - diluted 2.2p 4.5p
The Group hasno recognised gains and losses other than the result for the
current and prior years. Accordingly, a statement of total recognised gains and
losses has not been presented.
PARKWOOD HOLDINGS PLC
CONSOLIDATED BALANCE SHEET
as at 31 December 2003
At 31 December
2003 2002
�000 �000
Fixed assets
Intangible assets 525 639
Tangible assets 4,773 4,029
Investments - other 188 231
Investments in joint ventures
Share of gross assets 7,207 3,568
Share of gross liabilities (6,949) (3,584)
258 (16)
Investment in associates 351 337
6,095 5,220
Current assets
Stocks 518 475
Debtors due within one year 7,156 5,861
Debtors due after more than one year 1,256 1,335
8,930 7,671
Creditors: amounts falling due within one year (9,366) (7,427)
Net current (liabilities)/assets (436) 244
Total assets less current liabilities 5,659 5,464
Creditors: amountsfalling due after more than (1,230) (918)
one year
Provisions for liabilities and charges (158) (295)
4,271 4,251
Capital and reserves
Called up share capital 196 196
Capital redemption reserve 401401
Share premium account 2,227 2,227
Profit and loss account 1,447 1,427
Equity shareholders' funds 4,271 4,251
PARKWOOD HOLDINGS PLC
SUMMARY CASH FLOW STATEMENT
for the Year Ended 31 December 2003
Year ended 31 December
2003 2002
�000 �000
Net cash inflow from operating 2,724 2,399
activities
Net cash outflow for returns on investments and (143) (139)
servicing of finance
Tax paid (173) (697)
Net expenditure on tangible fixed (814) (859)
assets
Subordinated debt invested in Joint Ventures and (413) -
Associates
Sale/ (Purchase) of own shares by Employee Benefit 43 (105)
Trust
Net cash outflow from capital expenditure and (1,184) (964)
financial investment
Net cash outflow from acquisitions and disposals (64) (148)
Equity dividends paid (413) (393)
Net Cash inflow before financing 747 58
Capital element of finance lease rental payments (982) (719)
Bank loan - (180)
Decrease in cash in the year (235) (841)
RECONCILIATION OF NET CASHFLOW MOVEMENT TO NET DEBT
2003 2002
�000 �000
Decrease in cash in the year (235) (841)
Cash outflow from reduction in debt and lease 982 719
financing
Movement on bank loan - 180
Change in net debt resulting from cashflows 747 58
New finance leases (1,500) (820)
Increase in net debt (753) (762)
Net debt at 1 January (2,124) (1,362)
Net debt at 31 December (2,877) (2,124)
Notes
1. Results and Accounting Policies
The preliminary results for the year ended 31st December 2003 were approved by
the board of directors on 19 March 2004. The financial information set out
above does not constitute the Company's statutory accounts for the year ended
31 December 2003 or 2002 as detailed in section 240 of the Companies Act 1985,
but is derived from those accounts. The comparative financial information has
been extracted from the statutory accounts for the year ended 31 December 2002.
These accounts have been delivered to the Registrar of Companies. The auditors
have reported on these accounts; their reports were unqualified and did not
contain a statement under s237(2) or (3) of the Companies Act 1985.
The statutory accounts for the year ended 31 December 2003 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
United Kingdom 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 2002 annual report and financial statements.
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. Analysis of Turnover, Profit before tax and Net Assets.
Turnover, operating profit and net assets all of which originated and arose in
the United Kingdom are attributable to the following classes of business:
2003 Turnover Profit before Net assets/
tax
�000 (liabilities)
�000 *
�000
Glendale 29,074 814 4,118
Parkwood Leisure 14,414 947 (636)
Parkwood Healthcare 6,803 (529) 1,169
Parkwood PFI Projects 277 - -
Other 41 (318) (380)
50,609 4,271
Operating profit before goodwill 914
amortisation
Goodwill amortisation (133)
Share of net loss in Joint Ventures (131)
Share of net profit in Associated Undertakings 96
Group interest payable (143)
Profit before taxation 603
2002 Turnover Profit before Net assets/
tax
�000 (liabilities)
�000 *
�000
Glendale 27,233 1,554 3,398
Parkwood Leisure 12,470 920 (32)
Parkwood Healthcare 4,960 (460) 1,218
Parkwood PFI Projects 339 (97) -
Other 28 (370) (333)
45,030 4,251
Operating profit before goodwill 1,547
amortisation
Goodwill amortisation (126)
Share of net loss in Joint Ventures (59)
Share of net profit in Associated Undertakings 71
Group interest payable (139)
1,294
* Net assets/(liabilities) for the trading businesses excludes cash/
(overdrafts) and intercompany balances. Other includes overdraft of �690,000
(2002: �455,000).
The Managed Services Division asreported in the 2002 financial statements has
been reclassified into Glendale and Parkwood Leisure in the tables above. In
addition, Parkwood PFI Projects has been reclassified from Other.
3. The final dividend is payable on 4th June 2004 to shareholders on the
register on 7th May 2004.
4. Earnings per share for the year to 31 December 2003 have been calculated on
the profit attributable to ordinary shareholders of �416,000 using the weighted
average number of shares in issue during the period.
5. The Annual Report will be posted to shareholders on or around 30 March
2004. Copies will be available 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
FOR RELEASE 7.00AM 19 MARCH 2004
1
END
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