PARKWOOD HOLDINGS PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2004
Parkwood Holdings plc, the support services group, is pleased to announce its
interim results for the 6 months ended 30 June 2004.
Highlights
* Continued strong trading from Parkwood Leisure and improved trading within
the Glendale division. Healthcare continuing to reduce losses
* May 2004 acquisition of CCL Leisure Limited ("CCL") from Clear Channel
Entertainment (Theatrical) UK Limited for a deferred cash consideration of
�100,000. At acquisition, CCL operated 26 leisure centres
* Financial close on third Leisure PFI contract, building and managing a
leisure centre in Penzance, Cornwall under a 30 year contract
* Order book increased by 34% since 31 December 2003 to �308 million (Dec
2003: �230 million)
* Turnover increased by 29% to �31.2 million (2003: �24.2 million)
* Operating profit (before joint venture and associate profits) increased by
77% to �0.60 million (2003: �0.34 million)
* Profit before tax increased by 66% to �0.51 million (2003: �0.31 million)
* Earnings per share (before goodwill) increased by 52% to 2.2p (2003: 1.4p)
* Interim dividend per share maintained at 0.9p (2003: 0.9p)
Note: above data includes CCL post acquisition
Tony Hewitt, Executive Chairman, commented:
"*..results have improved from a difficult year in 2003 and having achieved a
good first half year I expect the Group to have a satisfactory year end result.
"
Enquiries:
Parkwood Holdings plc
Tony Hewitt, Executive Chairman 01772 627111
Charles Bithell, Group Finance Director 01772 627111
Notes for Editors;
Parkwood Holdings plc specialises in providing outsourced services mainly 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 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
operator or provider of services under 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.
CHAIRMAN'S STATEMENT
The six months ended 30th June 2004 has provided results ahead of expectation
before allowing for reorganisation costs following the acquisition of CCL
Leisure Limited ("CCL"), the most significant event in the period. Also of note
was the signing of a further Leisure PFI in March 2004 with Penzance District
Council which consolidates the Group's lead in this sector.
Group results
Group turnover increased to �31.2 million (2003: �24.2 million), a 29% increase
over the prior year, of which 12% represents the increased activity resulting
from the CCL acquisition. Total operating profit on a "like for like" basis
excluding CCL increased to �0.94 million (2003: �0.56 million). CCL incurred a
net operating loss after reorganisation costs of �0.17 million. Profit before
tax for the Group rose by 66% from the prior year to �0.51 million (2003: �0.31
million).
As a result of the acquisition and other contract awards during the period,
Parkwood's forward order book has also increased significantly to �308 million
(June 2003: �220 million).
The Board is pleased to declare an unchanged interim dividend of 0.9p payable
on 5th November 2004, to all shareholders on the register on 8th October 2004.
Board and Management
There were no changes in the composition of the Board in the period. The
appointment of a third non-executive Director originally planned to take place
in mid 2004 has been postponed until 2005.
Glendale
Glendale, the Group's "green" services division increased sales by 26% to �17.1
million (2003: �13.6 million) and operating profits before goodwill
amortisation rose to �0.52 million against �0.28 million the previous year.
The increase in sales occurred mostly in London and the South-east with the
commencement of new contracts with British Airports Authority and Welwyn and
Hatfield District Council. Glendale Golf also expanded in this region, with two
additional courses at Tilgate Forest, Crawley and Castle Point on Canvey
Island, Essex. Since the period end, Glendale has been informed that it is also
to be awarded the contract to manage two eighteen-hole courses in Richmond
Park, London. Glendale Golf is expected to comprise an increasing proportion of
the division's sales in future years. A new office is scheduled to open for the
London and the South-east region near Bishops Stortford, Hertfordshire in
September 2004.
The regional organisational structure introduced in 2003 has now settled down
and particularly strong results were produced by the North of England where a
new contract with St Helens Housing Association commenced in March 2004. The
Midlands also exceeded expectations and the extension of the Birmingham
contract for a further five years was confirmed during the period.
As planned, after two years of personally redirecting the business, the time
has come to appoint a new leader for Glendale and I am pleased to announce the
appointment of Nick Temple-Heald who joined Glendale on 31st August 2004 as its
new Managing Director. Nick has worked within the Horticultural supplies sector
for most of his working career. Nick will not only take control of the
management of Glendale but will also act as its champion in the Green Waste
Recycling sector.
Parkwood Leisure and CCL
Parkwood Leisure's turnover for the period was �7.7 million (2003: �6.7
million), an increase of 15%. The acquisition of CCL in early May 2004 added
two months of that company's sales amounting to an additional �2.98 million,
making a total of �10.7million for the division as a whole. This acquisition
from the Clear Channel Group for �100,000 plus costs propels the Group's
Leisure business to the third largest in its sector with annualised sales in
excess of �30 million. The combined businesses are responsible for forty eight
leisure facilities and a full and part time staff in excess of 2,000. The
integration of the two businesses, which will trade as one company from 1st
January 2005, is a priority for the management team and is progressing well.
The price paid for CCL reflected the fact that some contracts within its
portfolio were loss making; management are pursuing opportunities for
improvement and negotiations are underway with clients to mitigate losses.
Reorganisation costs of �186,000 following the acquisition were offset by a
small CCL operating profit of �18,000 in the months of May and June. Setting
these sums against an excellent operating profit before goodwill amortisation
of �0.73 million (2003: �0.54 million) in the existing business of Parkwood
Leisure, operating profit before goodwill amortisation for the Group's Leisure
division as a whole for the period was �0.56 million.
Leisure PFIs
Currently at preferred bidder stage, we anticipate that contracts will be
signed before the year end for a �14 million PFI project with Breckland
District Council in Norfolk for the construction of a new Leisure Centre in
Dereham and the refurbishment of an existing facility in Thetford. Two other
Leisure PFI Projects are now in their construction phase: Boxwood Leisure,
where Parkwood holds a 50% equity stake, is building a new swimming pool at
Erith and extending an existing Leisure facility at Bexleyheath both for the
London Borough of Bexley; and Penzance Leisure, a wholly owned SPV (special
purpose vehicle) is building a long awaited new leisure centre in Penzance,
Cornwall. Construction partners are MJ Gleeson and Kier South Western
respectively. Parkwood's first Leisure PFI, Waterfront Leisure at Crosby near
Liverpool, has now been successfully run by Parkwood Leisure since February
2003. Preferred bidder status was also achieved in 2003 with the London Borough
of Croydon for a Leisure PFI worth some �12 million, but is expected to be
delayed until late 2005.
Once fully built, our Leisure PFI's which have reached preferred bidder status
and beyond will require some �70 million of capital funding within the Group's
special purposes vehicles and is expected to provide over �11 million of annual
operating revenue to the Group's Leisure business.
Further bids are underway, including a bid for a new imaginatively designed
leisure centre in Tudor Park, Solihull for Solihull Metropolitan Borough
Council.
Parkwood Healthcare
Parkwood Healthcare's operating losses before goodwill amortisation were
reduced to �0.18 million (2003: �0.33 million), on sales of �2.99 million
(2003: �3.51 million). In April 2004, the Nursing Agency business was awarded a
framework agreement with the NHS enabling it to supply nurses in the South-east
region for a period of three years. Consideration is being given to
establishing a new branch to deal with this opportunity. The Patient Transport
business is stable and renegotiations are underway with one of Parkwood
Healthcare's major clients in this sector for extension of a current contract
for a further three years.
Parkwood PFI Projects
The Group's PFI unit has concentrated its efforts during the period on
preparing a bid for the Ministry of Defence for the development of new
facilities for 1,800 staff at Corsham near Bath. This is the largest PFI
project the Group has so far embarked upon and a strong consortium under the
name Realm Communications Services ("Realm") has been put together; including
Innisfree as equity partner and AMEC plc as construction partner. Realm
submitted its bid on 2nd September being one of only two bidders. Preferred
bidder status is to be announced next year and financial close is anticipated
in 2006.
Parkwood PFI Projects also successfully manages the Group's live projects, and
made a small contribution to profits in the period. At the end of July 2004 the
PFI team together with Glendale Environmental moved to new larger offices
outside Stratford-Upon-Avon.
Funding and cash flow
At 30 June 2004, non-recourse borrowing is included in the Group's balance
sheet, being net debt of �2.7 million arising on the construction of the
Penzance Leisure PFI, which is wholly owned by the Group. The Group's recourse
debt has decreased significantly from net borrowings of �5.29 million at 30
June 2003 and �2.88 million at 31st December 2003 to �1.13 million at 30 June
2004. Strong cash inflows net of additional hire purchase contracts on new
equipment ("HP") in the first half of the year of �1.74 million (2003: outflow
of �3.17 million) were achieved; the main reasons being improved working
capital management and the receipt of cash held within CCL.
The gearing of the Group computed on the basis of total debt compared to net
assets at 30 June 2004 was 90% (2003: 130%).
Interest cover for the Group excluding joint ventures and associates for the
period based on Group profit before interest and tax excluding joint ventures
and associates compared to the net interest cost was 13 times (2003: 4 times).
Outlook
The CCL acquisition and growth in Glendale means that Parkwood will increase
Group turnover to around �68 million for the full year (2003: �51 million). The
costs of reorganising and integrating the CCL acquisition have been
substantially taken and we are forecasting a positive benefit in the second
half. The Group continues its investment in growth for the future, both through
traditional tendering and bidding on PFI and PPP projects. Parkwood is in a
much stronger position than a year ago, with cash on hand for the first time in
many years. We continue to monitor closely our level of risk in PFI, which has
so far been justified. The wet summer has impacted on some of Glendale's
activities and will dampen second half results in this business but results
have improved from a difficult year in 2003 and having achieved a good first
half year I expect the Group to have a satisfactory year end result.
A W HEWITT
Executive Chairman
13th September 2004
Financial Highlights (2)
Interim Interim %
2004 2003 Change
Turnover (excluding joint ventures and associates) �31.2m �24.2m +29%
Operating Profit (before joint venture and associate �0.60m �0.34m +77%
profits)
Profit before Tax �0.51m �0.31m +66%
Earnings per share 1.8p 1.0 p +69%
Earnings per share before goodwill 2.2p 1.4p +52%
Dividends per share 0.9p 0.9p 0%
Order Book �308m �220m +40%
Gearing (1) 90% 130%
(1) Calculated by expressing net debt (see note 8) as a percentage of net
assets.
(2) Data includes the impact of the CCL acquisition
Financial Calendar
Interim Dividend Paid 5th November 2004
Full Year Results Announced 14th March 2005
Annual General Meeting May 2005
This statement is being sent to all shareholders. Copies are available from the
Company's website on www.parkwood-holdings.co.uk or from the registered office:
Parkwood House, Cuerden Park, Berkeley Drive, Bamber Bridge, Preston PR5 6BY
Summary Group Profit and Loss Account
Note 6 Months Ended Year
Ended
30 June 2004 (unaudited) 30 June 31
2003 December
2003
Existing Acquisition Total (unaudited) (audited)
operations
�000 �000 �000 �000 �000
Gross turnover 28,890 2,984 31,874 24,340 51,329
Less Group's share of (720) - (720) (178) (720)
joint ventures
Group Turnover - 2 28,170 2,984 31,154 24,162 50,609
continuing operations
Group operating profit 845 18 863 410 914
before goodwill
amortisation and
reorganisation costs
Exceptional 6 - (186) (186) - -
reorganisation costs
Goodwill amortisation (77) (2) (79) (73) (133)
Group operating profit 768 (170) 598 337 781
Share of operating 45 - 45 114 122
profit in joint ventures
Share of operating 127 - 127 110 236
profits in associated
undertakings
Total operating profit / 940 (170) 770 561 1,139
(loss) - continuing
operations
Interest payable and
similar charges
- Group (46) (82) (143)
- Joint ventures (140) (105) (253)
- Associates (72) (66) (140)
(258) (253) (536)
Profit on ordinary 2 512 308 603
activities before
taxation
Tax on profit on 3 (180) (114) (187)
ordinary activities
Profit on ordinary 332 194 416
activities after
taxation
Dividends 5 (176) (170) (396)
Retained profit 156 24 20
Basic earnings per share 4 1.8p 1.0p 2.2p
Basic earnings per share 4 2.2p 1.4p 2.9p
(before goodwill)
Diluted earnings per 4 1.8p 1.0p 2.2p
share
Dividends per share 5 0.9p 0.9p 2.2p
Group Balance Sheet
Notes At 30 June At 30 June At 31
2004 2003 December 2003
Restated Restated (1)
(1)
(unaudited) (unaudited) (audited)
�000 �000 �000
Fixed assets
Intangible assets 491 576 525
Tangible assets 9,872 4,707 4,773
Investments 397 367 351
10,760 5,650 5,649
Investments in joint ventures
Share of gross assets 9,372 4,430 7,207
Share of gross liabilities (9,209) (4,026) (6,949)
163 404 258
Current assets
Stocks 848 620 518
Debtors 10,994 9,776 7,156
Cash at bank and in hand 1,737 - 1,256
13,579 10,396 8,930
Creditors: amounts falling due (13,701) (10,781) (9,366)
within one year
Net current liabilities (122) (385) (436)
Total assets less current 10,801 5,669 5,471
liabilities
Creditors: amounts falling due (4,692) (1,354) (1,230)
after more than one year
Provisions for liabilities and (1,857) (232) (158)
charges
4,252 4,083 4,083
Capital and reserves
Called up share capital 9 196 196 196
Investment in own shares (175) (192) (188)
Capital redemption reserve 9 401 401 401
Share premium account 9 2,227 2,227 2,227
Profit and loss account 9 1,603 1,451 1,447
Equity Shareholders' funds 4,252 4,083 4,083
(1) See note 1
Group Cash Flow Statement
Note 6 Months Ended Year Ended
30 June 30 June 31 December
2004 2003 2003
(unaudited) (unaudited) (audited)
�000 �000 �000
Net cash inflow/(outflow) from 7 1,664 (878) 2,724
operating activities
Returns on investments and
servicing of finance
Interest received 31 - 47
Interest paid (8) (24) (65)
Interest element of finance (69) (58) (125)
lease payments
(46) (82) (143)
Taxation
UK corporation tax paid - (119) (173)
Capital expenditure and
financial investment
Purchase of fixed assets 8 (2,920) (382) (873)
Proceeds from sale of tangible 31 16 59
fixed assets
Subordinated debt invested in - (415) (394)
Joint Ventures
Subordinated debt invested in - - (19)
Associates
Sale of own shares by Employee 13 39 43
Benefit Trust
(2,876) (742) (1,184)
Acquisitions and disposals
Purchase of subsidiary (251) - (50)
undertaking
Cash acquired with business 2,001 - -
Purchase of shares in joint - (11) (14)
venture/associated undertakings
1,750 (11) (64)
Equity dividends paid (224) (243) (413)
Net cash inflow/(outflow) 268 (2,075) 747
before use of liquid
resources and financing
Financing
Capital element of finance (549) (446) (982)
lease rental payments
Bank loan 8 2,708 - -
2,159 (446) (982)
Increase/(decrease) in cash in 2,427 (2,521) (235)
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 2003 with the exception of the adoption of UITF Abstract 38.
"Accounting for ESOP trusts", where investments in own shares have been
reclassified , in both current and comparative periods.
The interim financial statements have been approved by the Board and have
neither been reviewed nor audited by the auditors.
The figures for the year ended 31 December 2003 are extracts from the audited
accounts for that year which have been filed with the Registrar of Companies.
The Auditors' Report to those accounts was unqualified and did not contain any
statement under s237(2) or (3) of the Companies Act 1985. The financial
information set out in these financial statements does not comprise full
accounts within the meaning of s240 of the Companies Act 1985.
2. Turnover and profit on ordinary activities before taxation
6 Months Ended Year Ended
Turnover 30 June 2004 30 June 2003 31 December
2003
(unaudited) (unaudited) (audited)
�000 �000 �000
Glendale 17,128 13,609 29,074
Parkwood Leisure 7,699 6,702 14,414
CCL Leisure 2,984 - -
Healthcare 2,989 3,509 6,803
Parkwood PFI Projects / head office 354 342 318
31,154 24,162 50,609
All Group turnover originated in the United Kingdom.
6 Months Year Ended
Ended
Profit before taxation 30 June 2004 30 June 2003 31 December
2003
(unaudited) (unaudited) (audited)
�000 �000 �000
Profit before goodwill amortisation:
Glendale 519 276 646
Parkwood Leisure 729 542 933
CCL Leisure 18 - -
CCL Leisure - exceptional (186) - -
reorganisation costs
Healthcare (180) (332) (630)
Parkwood PFI Projects 22 90 -
Central costs and other (291) (247) (178)
Profit before goodwill amortisation 631 329 771
Goodwill amortisation (79) (73) (133)
Share of net (loss)/profit in joint (95) 9 (131)
ventures
Share of net profit in associated 55 43 96
undertakings
Profit before taxation 512 308 603
3. Taxation
Corporation tax for the six months ended 30 June 2004 is charged at 30% of
profits before goodwill, which is the current expected rate for the year ending
31 December 2004.
4. 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 18,881,410 (2003:
18,594,974).
5. Dividends
The Board has declared an interim dividend of 0.9p per ordinary share (2003:
0.9p). The dividend will be paid on 5th November 2004 to all shareholders
registered on 8th October 2004. The final dividend for 2003 was paid in June
2004.
6. Purchase of subsidiary undertaking and exceptional reorganisation costs
On 10th May 2004, the Group completed the acquisition of 100% of the issued
share capital of CCL Leisure Limited and its subsidiaries ("CCL") from Clear
Channel Entertainment (Theatrical) UK Limited. CCL's business is the provision
of Leisure Services to local councils.
The consideration for the acquisition is �100,000, payable on a deferred basis
on 10th May 2005. Provisional Fair values have been assigned to the completion
accounts of CCL which reflect impairment of fixed assets and provisions for
onerous contracts.
The following table sets out a summary of assets and liabilities acquired and
the revaluation adjustments required to reflect their provisional fair value to
the group:
Book value Revaluation Provisional
adjustments fair value to
the Group
�000 �000 �000
Fixed assets 4,605 (2,694) 1,911
Cash 2,001 - 2,001
Net current liabilities excluding cash (1,312) (307) (1,619)
Long term liabilities and provisions (225) (1,753) (1,978)
Net assets acquired 5,069 (4,754) 315
Satisfied by:
Deferred consideration 100
Costs of acquisition 251
Provisional goodwill arising on the 36
acquisition
An amount of �186,000 has been charged to the Group profit and loss account in
respect of exceptional costs incurred in reorganising, restructuring and
integrating the acquisition in the period from 10th May 2004 to 30th June 2004.
These costs were paid in cash prior to 30th June 2004 and relate mainly to
redundancies within CCL's senior management and head office.
7. Reconciliation of operating profit to net cash inflow/(outflow) from
operating activities
6 Months Ended Year Ended
30 June 30 June 31 December
2004 2003 2003
(unaudited) (unaudited) (audited)
�000 �000 �000
Net operating profit 598 337 781
Depreciation of tangible fixed assets 943 795 1,619
Profit on sale of tangible fixed assets (9) (14) (49)
Amortisation of intangible assets 79 73 133
Increase in stocks (160) (145) (43)
Increase in debtors (1,145) (2,578) (1,216)
Increase in creditors 1,424 632 1,499
(Increase)/decrease in provisions for (66) 22 -
liabilities and charges
Net cash inflow/(outflow) from operating 1,664 (878) 2,724
activities
8. Analysis of net debt
At 1 Cashflow Cash Other At 30 At 30
January acquired non-cash June June
2004 with changes 2004 2003
subsidiary
�000 �000 �000 �000 �000 �000
(Bank overdraft) / (690) 426 2,001 - 1,737 (2,976)
cash at bank
Finance leases (2,187) 549 - (1,233) (2,871) (2,314)
Recourse debt (2,877) 975 2,001 (1,233) (1,134) (5,290)
Non recourse debt - (2,708) - - (2,708) -
(2,877) (1,733) 2,001 (1,233) (3,842) (5,290)
During the period, one of the Group's wholly owned subsidiaries, Penzance
Leisure Limited, a company involved in the construction of a Leisure Centre
under the PFI initiative, began to trade. In the period to 30th June 2004, a
total of �2,708,000 of non-recourse debt was drawn down to fund assets under
construction of �2,721,000, included within purchase of fixed assets in the
cashflow statement.
The gearing of the Group computed on the basis of total debt compared to net
assets at 30 June 2004 was 90% (2003: 130%).
9. Share Capital and Reserves
Share Capital Share Profit &
Capital Redemption Premium Loss
Reserve Account Account
�000 �000 �000 �000
As at 1 January 2004 196 401 2,227 1,447
Retained profit - - - 156
At 30 June 2004 196 401 2,227 1,603
10. Reconciliation of movement in consolidated shareholders' funds
6 Months Ended Year Ended
30 June 30 June 31 December
2004 2003 2003
Restated Restated
�000 �000 �000
Profit for the financial period 332 194 416
Dividends (176) (170) (396)
Disposal of investments in own shares 13 39 43
Net increase in shareholders' funds 169 63 63
Opening shareholders' funds as previously 4,083 4,251 4,251
stated
Prior year adjustment (note 1) - (231) (231)
Closing shareholders' funds 4,252 4,083 4,083
END
Parkwood Holdings (LSE:PKW)
Historical Stock Chart
From Jun 2024 to Jul 2024
Parkwood Holdings (LSE:PKW)
Historical Stock Chart
From Jul 2023 to Jul 2024
