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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Parkwood Hldgs. | LSE:PKW | London | Ordinary Share | GB0006816549 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 41.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
PARKWOOD HOLDINGS PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2003 Parkwood Holdings plc, the support services group, announces interim results for the 6 months ended 30 June 2003. Highlights * Group signs largest PFI contract to date, managing leisure centres in the London Borough of Bexley under a 33 year contract, with an expected annual turnover in excess of £4 million. * Order book increased by 33% since 31 December 2002 to £220 million. * Turnover increased by 11% to £24.2 million (2002: £21.7 million). * Operating profit on continuing operations reduced by 3% to £0.56 million (2002: £0.58 million). * Profit before tax reduced by 39% to £0.31 million (2002: £0.51 million) due to continuing losses in Parkwood Healthcare and investment in new business in Glendale. * Interim dividend per share of 0.9p (2002: 0.9p). * Earnings per share (before goodwill) reduced by 32% to 1.43p (2002: 2.11p). Tony Hewitt, Executive Chairman, commented: "Results for the second half of 2003 are expected to show a significant improvement due to the benefit of signing the Bexley contract and the forecast reduction in losses in Parkwood Healthcare." Enquiries: Parkwood Holdings plc Tony Hewitt, Executive Chairman 01772 627111 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 30 June 2003 has been dominated by the signing of the Group's largest PFI contract to date and the continuing losses in the Group's Healthcare business. Overall, results are disappointing in that profits for the period are considerably less than in the first half of 2002. The second half of the year will benefit from the signing of the Bexley contract and from reduced losses in Parkwood Healthcare. The Group is currently working on bringing a further three PFI projects to financial close, with these deals likely to provide a significant benefit to 2004 and future years. Group Results Group turnover continues to increase, up by 11% in the period to £24.2 million (2002: £21.7 million). Operating profit before goodwill, and the joint venture and associate company profits associated with the PFI special purpose companies was £0.41 million (2002: £0.65 million), whilst profits before tax fell to £ 0.31 million (2002: £0.51 million). Significantly, the Group's forward order book, taken to a ten year horizon has increased by 50% to £220 million since 30 June 2002. The Board is pleased to declare an interim dividend of 0.9p (2002: 0.9p) payable on 17 October 2003 to all shareholders registered on 26 September 2003. Board and Management In March I announced that consideration was being given to the future size and composition of the board, and in May, Sarah Kling a recently retired partner in KPMG (London office) joined the Board as a Non-Executive Director replacing Edwin Lee who had served as a non-executive director since the formation of Parkwood Holdings plc. It has been decided that the Group Board will be expanded to seven by mid 2004, consisting of three independent non-executives (currently two) and four executive directors (currently three). As previously announced, Doug Eadie the Group Finance Director leaves Parkwood Holdings plc on 15 September 2003 and the Board wishes him well for the future. A new Group Finance Director has been selected and it is expected that he will commence employment with the Group in December. Further details will be released shortly. As a result of the substantial growth that Parkwood Leisure will achieve over the next three years from the Group's success in the PFI/PPP market, Andrew Holt has decided to concentrate on managing Parkwood Leisure and to stand down from his role as Group Chief Executive with effect from 1 August 2003, although he remains on the Group Board. I assumed the responsibilities of Chief Executive from the same date. Glendale Glendale, the "green" services division of Parkwood Holdings achieved sales of £13.61 million (2002: £12.94 million), although profits fell to £0.28 million (2002: £0.45 million). Our efforts to diversify and expand the business since mid 2002 have led to costs being incurred to date of £173,000, of which £98,000 relates to this period. Success has already been achieved with the creation of Glendale Golf which now has two golf courses under management and Glendale Environmental where consultancy work has been undertaken for the Department of the Environment. Two other initiatives, Glendale Horticulture and Glendale Green Waste Recycling made no contribution in the period, whilst interest in Parkplan, the Group's funding partnership for investment in parks and open spaces has been slow. The regional organisational structure planned for Glendale is now in place and the business has already fulfilled one of its strategic aims by operating nationally in England, Wales and Scotland. Both the North of England and the Midlands have exceeded expectations in the first half, while new contracts in London and the South East with Eastbourne, Surrey County Council and the London Borough of Camden have commenced. Parkwood Leisure and Leisure PFIs Parkwood Leisure is poised for an exciting expansion of its business. At the end of the period it signed its largest contract to date, to provide leisure management services to the London Borough of Bexley as a sub-contractor to Boxwood Leisure Limited a company in which the Group's PFI unit has a 50% equity stake via Leisureplan Limited, its specialist joint venture company. Operationally, the contract commenced on 1 September 2003 when over 450 full time, part time and casual staff transferred to the employment of Parkwood Leisure in five leisure centres in the Borough. Parkwood Leisure's turnover will increase by £4 million in the first full year of operations, rising to £5 million per annum in 2½ years time when £32 million of capital has been expended to build new and refurbish existing facilities. Leisureplan Limited via its specially created subsidiaries has also achieved commercial close or preferred bidder status on three other Leisure PFIs. These are at Penzance with Penwith District Council, where it will build and operate a new £6 million leisure centre; at Thetford and Dereham in Norfolk for Breckland District Council where it will refurbish the centre in Thetford and build a new centre at Dereham, with a total capital commitment of £14 million and for the London Borough of Croydon involving four leisure centres at South Norwood, Purley, New Addington and Thornton Heath, with capital expenditure totalling £11 million. In all cases, Parkwood Leisure will become the operator. When financial close has been achieved on all these projects the turnover of Parkwood Leisure will then grow to be in excess of £20 million in the first full year of operations. Parkwood Leisure's results for the period produced a profit before tax of £0.54 million (2002: £0.46 million) on turnover of £6.7 million (2002: £6.26 million). The leisure business is also the major generator of cash in the Group with a positive cashflow of £506,000 in the period. Parkwood Healthcare Losses of £0.33 million in the period compare with a loss of £74,000 in the same period last year and bring the total losses in the business to £0.75 million over the last two years. Sales in the period amount to £3.51 million (2002: £2.4 million). Our new management team comprising of Liz Semain as Managing Director and Raj Kandeth as Finance Director has already made good progress. Gradually the patient transport and ambulance business that had been responsible for the losses is being rationalised with contracts renegotiated or terminated. Losses will continue into the second half but at a lower level than previously. Parkwood PFI Projects The Group's PFI unit is pleased to announce that Sarah Hughes-Clarke rejoined the Group as Head of PFI on 1 September 2003 after an absence of five years during which time she has been responsible for business development with a public sector agency. It is expected that Sarah will be able to build on the substantial contribution made by her predecessor, Mark Davies. The PFI unit is operating as a profit unit for the first time in 2003 and has contributed £138,000 to the Group's profits in the period. A new strategy whereby the unit becomes a fully fledged project management business providing bid management, project management and life cycle fund management is being developed. This will ensure the long term success and profitability of the unit. Funding and Cashflow Net borrowings of £5.29 million at 30 June 2003 have increased significantly from the borrowings of £2.12 million at 31st December 2002 and £2.86 million at 30 June 2002. The increase since December 2002 partially reflects the seasonal nature of the Group's working capital requirements, but was also adversely affected by the delay to the signing of the Bexley contract. Since the half year, the Group's bank overdraft has already reduced substantially, having more than halved by the beginning of September as a result of seasonal cash inflows, together with cost recoveries on the Bexley contract. There should be a net cash inflow in the second half of the year which is expected to lead to a significant reduction of gearing by the year end. Outlook As indicated above, results for the second half of 2003 are expected to show a significant improvement, due to the benefits of signing the Bexley contract and the forecast reduction in losses in Parkwood Healthcare. The first half of 2003 included substantial costs in relation to new ventures being pursued in Glendale as well as in relation to PFI bidding. The board will now seek to develop the strategy to maximise the benefits arising from these significant investments. A W HEWITT Executive Chairman 15th September 2003 Financial Highlights Interim Interim % 2003 2002 Change Turnover (excluding joint ventures and associates) £24.2m £21.7m +11% Operating Profit (before goodwill, joint venture and £0.41m £0.65m - 37% associate profits) Profit before Tax £0.31m £0.51m - 39% Earnings per share (EPS) 1.04p 1.81p - 43% EPS (before goodwill) 1.43p 2.11p - 32% Dividends per share 0.9p 0.9p 0% Order Book £220m £147m +50% Gearing (1) 123.7% 71.8% (1) Calculated by expressing net debt (as note 9) as a percentage of net assets. Financial Calendar Interim Dividend Paid October 2003 Full Year Results Announced March 2004 Annual General Meeting May 2004 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 2003 2002 2002 (unaudited) (unaudited) (audited) £000 £000 £000 Gross turnover 24,340 21,736 45,030 Less Group's share of (178) - - joint ventures Group Turnover - 2 24,162 21,736 45,030 continuing operations Net operating profit - 3 337 596 1,421 continuing operations Share of operating 114 (13) (59) profit / (loss) in joint ventures Share of operating 110 - 189 profits in associates Total operating profit - 561 583 1,551 continuing operations Interest payable and similar charges - Group (82) (69) (139) - Joint ventures (105) - - - Associates (66) - (118) (253) (69) (257) Profit on ordinary 2 308 514 1,294 activities before taxation Tax on profit on 4 (114) (175) (446) ordinary activities Profit on ordinary 194 339 848 activities after taxation Dividends 6 (170) (158) (401) Retained profit 24 181 447 Earnings per share - 5 1.04p 1.81p 4.5p basic Earnings per share 5 1.43p 2.11p 5.2p (before goodwill) - basic Earnings per share - 5 1.04p 1.78p 4.5p diluted Dividends per share 6 0.9p 0.9p 2.2p Summary Group Balance Sheet Notes At 30 June At 30 June At 31 December 2003 2002 2002 (unaudited) (unaudited) (audited) £000 £000 £000 Fixed assets Intangible assets 576 564 639 Tangible assets 4,707 4,184 4,029 Investments 7 559 426 568 5,842 5,174 5,236 Investments in joint ventures Share of gross assets 4,430 1,962 3,568 Share of gross (4,026) (1,958) (3,584) liabilities 404 4 (16) Current assets Stocks 620 479 475 Debtors 9,776 8,242 7,196 Cash at bank and in - - - hand 10,396 8,721 7,671 Creditors: amounts (10,781) (8,627) (7,427) falling due within one year Net current (385) 94 244 (liabilities) / assets Total assets less 5,861 5,272 5,464 current liabilities Creditors: amounts (1,354) (1,182) (918) falling due after more than one year Provisions for (232) (105) (295) liabilities and charges 4,275 3,985 4,251 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 1,451 1,161 1,427 account Equity Shareholders' 4,275 3,985 4,251 funds Summary Group Cash Flow Notes 6 Months Ended Year Ended 30 June 2003 30 June 31 December 2002 2002 (unaudited) (unaudited) (audited) £000 £000 £000 Net cash (outflow) / 8 (878) 70 2,399 inflow from operating activities Returns on investments and servicing of finance Interest paid (24) (25) (40) Interest element of (58) (44) (99) finance lease payments (82) (69) (139) Taxation UK corporation tax (119) - (697) paid Capital expenditure and financial investment Purchase of fixed (382) (503) (960) assets Purchase of fixed - - - asset investment Proceeds from sale of 16 22 101 tangible fixed assets Sale / (Purchase) of 39 (110) (105) own shares by Employee Benefit Trust (327) (591) (964) Acquisitions and disposals Purchase of business - - (123) Purchase of shares in (11) - (25) joint venture / associate undertakings (11) - (148) Equity dividends paid (243) (225) (393) Net cash (outflow) / (1,660) (815) 58 inflow before use of liquid resources and financing Financing Capital element of (446) (321) (719) finance lease rental payments Debt due within one year: Bank loan repaid - (180) (180) Subordinated debt in (415) - - joint venture / associates (861) (501) (899) Decrease in cash in (2,521) (1,316) (841) 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 2002. 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 2002 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 2003 30 June 2002 31 December 2002 (unaudited) (unaudited) (audited) £000 £000 £000 Turnover Glendale (1) 13,609 12,943 27,234 Parkwood 6,702 6,260 12,470 Leisure (2) Healthcare 3,509 2,400 4,960 Holding Company 342 133 366 24,162 21,736 45,030 (1) Glendale was prior to 1 January 2003 referred to as the Grounds Management business of the Managed Services Division. (2) Parkwood Leisure was prior to 1 January 2003 referred to as the Leisure business of the Managed Services Division. All Group turnover originated in the United Kingdom. Figures for June 2002, and December 2002 have been restated to reflect the separation of the Parkwood Leisure business effective from 1 January 2003. 6 Months Year Ended Ended 30 June 2003 30 June 31 December 2002 2002 (unaudited) (unaudited) (audited) £000 £000 £000 Profit Before Tax Glendale 276 449 1,471 Parkwood Leisure 542 463 919 Healthcare (332) (74) (462) Central Costs (157) (255) (522) Share of Joint Venture 9 (13) (58) Profit / (Losses) Share of associate 43 - 72 profits Profit before goodwill 381 570 1,420 Goodwill (73) (56) (126) 308 514 1,294 3. Analysis of Operating Profit 30 June 30 June Year Ended 2003 2002 (unaudited) (unaudited) 31 December 2002 £000 £000 £000 Operating profit 410 652 1,547 before goodwill Goodwill (73) (56) (126) amortisation Net operating 337 596 1,421 profit 4. Taxation Corporation Tax for the current year is charged at 30% of profits before goodwill, which is the current expected rate for the year ending 31 December 2003. 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 18,594,974 (2002: 18,727,039). 6. Dividends The Board has declared an interim dividend of 0.9p per ordinary share (2002: 0.9p). The dividend will be paid on 17 October 2003 to all shareholders registered on 26 September 2003. The final dividend for 2002 was paid in May 2003. 7. Investments Investments in own shares at 30 June 2003 of £192,000 comprise the holding of 761,625 shares in Parkwood Holdings Plc by Parkwood Group Trustees Ltd, the corporate trustee of the Parkwood Group Employee Benefit Trust. At 30 June 2003, the market value of these shares was 45.5p per share, or £347,000. The other investment of £367,000 relates to the goodwill in respect of the Group's 22.2% stake in Realm Services (DAC) Limited. This company is treated as an associate in the accounts 8. Reconciliation of operating profit to net cash (outflow) / inflow from operating activities 6 Months Ended Year Ended 30 June 2003 30 June 31 December 2002 2002 (unaudited) (unaudited) (audited) £000 £000 £000 Net operating profit 337 596 1,421 Depreciation of tangible 795 751 1,460 fixed assets Profit on sale of tangible (14) (9) (54) fixed assets Amortisation of intangible 73 56 126 assets Increase in stocks (145) (60) (56) Increase in debtors (2,578) (2,168) (1,122) Increase in creditors 632 904 624 Increase in provisions for 22 - - liabilities and charges Net cash (outflow) / inflow (878) 70 2,399 from operating activities 9. Analysis of net debt At 1 January Cashflow Other non-cash At 30 June 2003 changes 2003 £000 £000 £000 £000 Bank overdraft/ (455) (2,521) - (2,976) cash at bank Finance leases (1,669) 446 (1,091) (2,314) (2,124) (2,075) (1,091) (5,290) 10. Share Capital and Reserves Share Capital Share Premium Profit & Loss Capital Redemption Account Account Reserve £000 £000 £000 £000 As at 1 196 401 2,227 1,427 January 2003 Retained - - - 24 profit At 30 June 196 401 2,227 1,451 2003 11. Reconciliation of movement in consolidated shareholders' funds 6 Months Ended Year Ended 30 June 30 June 31 December 2002 2003 2002 £000 £000 £000 Profit for the financial 194 339 848 period Dividends (170) (158) (401) Net increase in shareholders' 24 181 447 funds Opening shareholders' funds 4,251 3,804 3,804 Closing shareholders' funds 4,275 3,985 4,251 END
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