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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 41.50 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Feb 2020 to Feb 2025
TIDMPKW
RNS Number : 8402C
Parkwood Holdings PLC
14 March 2011
Preliminary Results for the year ended 31 December 2010
Parkwood Holdings Plc ("Parkwood" or "the Group"), the public sector support services specialist, announces its preliminary results for the year ended 31 December 2010.
Highlights:
-- Profit before tax from continuing operations of GBP2.4 million (2009 restated: GBP0.1 million)
-- Revenues in Parkwood Leisure grew by 5% to GBP64.4 million (2009 restated: GBP61.4 million)
-- Parkwood Leisure's adjusted operating profit increased by 9% to GBP4.6 million (2009 restated: GBP4.2 million)
-- Glendale reduced its adjusted operating loss to GBP0.3 million (2009: GBP0.7 million)
-- Basic earnings per share from continuing operations of 10.6p (2009 restated: 0.8p loss)
-- The Group had no net debt as at 31 December 2010 (2009: GBP2.7 million)
-- Net assets as at 31 December 2010 of GBP6.8 million (2009 restated: GBP5.6 million)
-- Ten year forward order book increased by 14% to GBP535 million (2009: GBP471 million)
For further information please contact:
Tony Hewitt Executive Chairman 01772 627111
Mike Quayle Group Finance Director 01772 627111
Neil Baldwin Brewin Dolphin 0113 241 0126
Chairman's statement
The year ended 31 December 2010 was challenging for Parkwood and produced mixed results. Profit before taxation from continuing operations increased to GBP2.4 million on revenues which fell slightly to GBP113.8 million. Parkwood Leisure, the Group's largest business, continued to grow and increased its profitability. A major leisure PFI was signed in the spring with Bristol City Council and is currently being built. Glendale, the Group's green services division, suffered a 9% decline in revenues although its operating loss was reduced to GBP0.3 million. Glendale Recycling, the green waste composting business, was put up for sale at the end of the year and has been reclassified as a discontinued operation. The year brought to an end the Group's involvement in the provision of ambulance services for the NHS, which had incurred significant losses in previous years. Retained profits reduced to GBP0.8 million although the prior year included a profit from the sale of the Group's investment in special purpose companies.
Results
Revenues from continuing operations were GBP113.8 million against a restated figure of GBP115.1 million in the prior year. Adjusted operating profits, before allowing for losses from discontinued operations, impairments and similar charges, amounted to GBP3.6 million (2009 restated: GBP0.8 million). However, retained profits were reduced to GBP0.8 million after allowing for discontinued operations, impairments and a tax charge of GBP0.5 million (2009 restated: GBP0.3 million). Earnings per share were 4.2 pence (2009 restated: 11.2 pence).
Parkwood Leisure's revenue rose to GBP64.4 million (2009: GBP61.4 million), and Glendale's revenue fell to GBP46.0 million (2009 restated: GBP50.3 million). Parkwood Leisure achieved an adjusted operating profit of GBP4.6 million (2009 restated: GBP4.2 million) whilst Glendale's adjusted operating loss amounted to GBP0.3 million (2009 restated: GBP0.7 million loss). Financial close of the leisure PFI at Bristol and the sale of the associated equity and debt enabled Parkwood Consultancy Services to produce a profit of GBP1.1 million for the year. Parkwood Healthcare's revenues were impacted by a decline in the demand for nursing staff and sales declined to GBP2.3 million (2009: GBP3.8 million), but the business almost broke-even compared to a prior year loss of GBP0.3 million.
Parkwood's cash position was much improved throughout the year enabling bank loans of GBP3.3 million to be repaid in the first half. The Group ended the year with a cash balance of GBP1.9 million.
Dividends
The Board is able to recommend the payment of a dividend of 1.5 pence per ordinary share payable on 6 May 2011. Total dividends paid and charged in 2010 were 2.7 pence (2009: nil).
Strategy and order Book
Having lived through a difficult time between 2008 and 2010 Parkwood looks forward to the future with confidence. The Group's order book with the public sector has grown to GBP535 million from GBP471 million. The Government's comprehensive spending review combined with the localism bill currently before parliament suggests a greater role for the private sector in the provision of public services. The outsourcing market is valued at GBP80 billion per annum and represents 15% of all public sector expenditure; it is expected to grow by 5% per annum or more over the next few years.
The pressure that local government is under to protect front line services while cutting budgets will inevitability lead many to turn to the private sector for support. Parkwood expects to gain from the new ways of working that the public sector will need to adopt. Some trends are already beginning to emerge. In particular, longer term contracts are being suggested in return for increased investment by the private sector. The affordability of some projects looks doubtful and Parkwood's resources are limited so careful selection and investment appraisal is required. Also there is a tendency to 'bundle' services together, which can lead to the misalignment of services and contracts which are out of character for Parkwood. In some cases strategic alliances with others companies may be required. In the short term the Group is being asked to help clients come up with 'savings' and the certainty of some revenue streams remains unclear.
Nevertheless there is much that is positive and after three years when revenues have been static Parkwood is likely to start to grow again, particularly in the leisure management sector.
Management and board
I have served as Executive Chairman and Chief Executive for the past eight years. It is now time for me to split the role and I intend to become part time Executive Chairman of Parkwood from 1 January 2012. Andrew Holt, the Managing Director of Parkwood Leisure, will take over the role of Chief Executive. Andrew, aged 53, joined Parkwood in 1996 and has worked closely with me for many years during which time he has built Parkwood Leisure to be the most profitable leisure management business in its field. Mike Quayle continues as the Group Finance Director, and Heather Rosling serves as Company Secretary while Carolyn Stockdale is on maternity leave.
There are currently four non-executive directors with Richard Tolkien acting as the Senior Independent Non-Executive Director. Richard Allen and Edward Lord are newly appointed, and Sarah Kling will retire at the end of April 2011 having served as a non-executive for eight years. Sarah will be greatly missed and on behalf of the Company I thank her most warmly for her contribution to the success of Parkwood.
Staff
Staff numbers continue to increase and total 5,889 or 3,156 full time equivalents, with a gender ratio of 52% female and 48% male. There has been a high turnover of staff over the last year largely as a result of contracts being won and lost.
New managing directors are being sought for both Glendale and Parkwood Leisure but otherwise senior management teams remain settled. I would like to congratulate everyone in Parkwood for the enthusiasm and dedication they have shown over the last year. The work that they undertake on behalf of the communities we all live and work in is essential and valued. The ethos of public service, albeit by a private sector organisation, is one that we can be justly proud of.
Outlook
Parkwood Holdings is a business that survives whilst others come and go. The outlook for the immediate future is uncertain and neither I, nor others, can safely predict the effect that high inflation coupled with cuts to public service budgets will have on Parkwood. However, in the medium term prospects seem good and opportunities many. The challenge will be in choosing wisely where to concentrate the Group's attention; leisure management looks to be the safest bet.
Tony Hewitt
Executive Chairman
14 March 2011
Financial Review
The Group's profit before tax from continuing operations was GBP2.4 million. This is a substantial improvement on the prior year restated profit before tax of GBP0.1 million. Revenue from continuing operations of GBP113.8 million was slightly below the prior year (2009 restated: GBP115.1 million) and reflects a refocussing of the Group's activities towards its more profitable operations. Operating profit before amortisation, impairments and similar charges rose to GBP3.6 million (2009 restated: GBP0.8 million). Impairments and similar charges totalled GBP0.9 million (2009 restated: GBP0.3 million). Profit after tax from continuing operations was GBP1.9 million (2009 restated loss: GBP0.1 million).
The loss making Recycling business is currently the subject of a disposal process and has therefore been classified as a discontinued activity. The loss from discontinued operations of GBP1.1 million includes one-off items and a goodwill impairment charge. After the loss from discontinued operations, the Group recorded a retained profit for the year of GBP0.8 million (2009 restated: GBP2.0 million).
Trading performance
The following summary has been prepared from information contained within the financial statements.
Hot Features
Premium
2010 2009 (restated)
Adjusted Adjusted
operating operating
Revenue profit Revenue profit
GBP000 GBP000 GBP000 GBP000
Leisure 64,422 4,588 61,425 4,225
Glendale 46,373 (259) 50,287 (707)
Healthcare 2,279 (11) 3,792 (337)
PCS 1,860 1,033 1,317 (286)
Other 1,453 (1,707) 1,760 (2,115)
Inter-segmental
elimination (2,573) - (3,431) -
-------------------- ---------- ------------- -------- -----------
113,814 3,644 115,150 780
-------------------- ---------- ------------- -------- -----------
Adjusted operating profit is operating profit from continuing operations before amortisation, impairment and similar charges.
Parkwood Leisure continued its strong growth record with a 5% increase in revenue and a 9% increase in adjusted operating profit. Growth was driven both by new contracts and improved performance on existing contracts.
Glendale's revenue fell by 8% to GBP46 million but the adjusted operating loss of GBP0.3 million is an improvement on the prior year loss of GBP0.7 million. Glendale's adjusted operating loss results from the underperforming Golf and Horticulture businesses with combined losses of GBP1.6 million. The Horticulture loss includes approximately GBP0.5 million in respect of overvalued inventory. The profitability of Glendale's core Grounds and Countryside business improved by GBP0.4 million.
Healthcare's revenues reduced by GBP1.5 million following the end of the onerous patient transport contract in July 2009. More significantly, the adjusted operating loss has reduced from GBP0.3m in 2009 to an almost breakeven position in 2010.
Parkwood Consultancy Services recorded an adjusted operating profit of GBP1.0 million compared to the prior year loss of GBP0.3 million. The growth in profit is mainly attributable to the closure of the Bristol PFI contract in April 2010. Parkwood Consultancy Services does not currently have any other such projects in the pipeline.
Within the "Other" row in the above table, revenue relates to the Design, Build, Operate and Maintain (DBOM) contracts and the costs of GBP1.7 million relate to central group costs, which have been reduced by GBP0.3 million compared to 2009.
Impairments and similar charges
The Group incurred a GBP0.5 million impairment charge (2009 restated: GBP0.3 million), of which GBP0.4 million relates to a charge taken against the carrying value of fixed assets within the Golf business. In addition, following the impairment of certain Golf assets, a provision of GBP0.4 million has been established. The total charge to the consolidated income statement was therefore GBP0.9 million (2009 restated: GBP0.3 million).
Finance costs
Net finance costs have reduced to GBP0.2 million (2009 restated: GBP0.4 million). The Group received finance income totalling GBP0.1million on its remaining SPC investment and positive cash balances. Finance costs relate to interest on hire purchase contracts of GBP0.2 million (2009 restated: GBP0.3 million) and interest paid on bank loans up to the date of repayment of GBP0.1 million (2009 restated: GBP0.2 million).
Taxation
The Group's tax charge on continuing operations was GBP0.5 million (2009 restated: GBP0.3 million). This is lower than the expected charge based on the profit from continuing operations due to non-taxable gains and adjustments to prior year computations. The taxation credit relating to discontinued operations is disclosed within those activities.
Discontinued operations
The board expects to complete the sale of Recycling in the first half of 2011. The loss for the year of GBP1.1 million includes an impairment charge against goodwill of GBP0.3 million and also includes a provision for exit liabilities. No significant profit or loss on disposal is anticipated.
The restated 2009 results include a GBP2.1 million profit from discontinued operations which reflects the profit on sale of SPC investments offset by the Realm impairment. The loss of the Recycling business for 2009 is now included within discontinued operations.
Prior year adjustments
The 2009 results have been restated to exclude the results of the Recycling business from the Income Statement from continuing operations. In addition, adjustments have been made to deconsolidate Glendale Liverpool Limited as explained in note 1 and also to implement IFRIC 12, 'Service Concession Arrangements'.
IFRIC 12 became effective during the period and requires that assets funded by local authorities should not be capitalised by the private sector concessionaire. IFRIC 12 also requires that the contractual obligation of replacing such assets should be accrued for. The requirements of IFRIC 12 affect certain contracts operated by the Leisure division.
The Group balance sheet as at 31 December 2009 has been restated to remove the affected assets with a net book value of GBP2.2 million. A GBP0.7 million creditor in respect of unamortised funding received has also been derecognised. A net financial asset of GBP1.1m has been recognised which represents a timing difference for expenditure incurred in excess of the charge to the income statement. After tax, the net impact is a GBP0.3 million reduction to net assets as at 31 December 2009.
Cash flow
The net cash inflow generated from operating activities was GBP3.5 million (2009 restated: GBP8.7 million) and includes a GBP0.3 million outflow from discontinued activities (2009 restated: GBP3.3 million inflow). The total cash outflow from discontinued activities, including financing and investing activities, was GBP0.7 million (2009: GBP0.4 million outflow).
The net cash flow from investing activities was GBP0.5 million and includes capital expenditure funded by the Group of GBP1.0 million, offset by proceeds from disposals of surplus fixed assets totalling GBP0.4 million. Following the implementation of IFRIC 12, the Group's expenditure on replacing council owned assets is included within operating activities. Such expenditure totalled GBP0.6 million (2009: GBP0.4 million).
Total capital expenditure was GBP1.0 million (2009 restated: GBP0.7 million), of which GBP0.4 million was funded through hire purchase agreements. Capital expenditure was significantly lower than the depreciation charge from continuing activities of GBP2.4 million.
Before financing cash flows, the Group generated a net cash inflow of GBP3.0 million (2009 restated: GBP8.5 million).
The cash outflow from financing activities was GBP5.9 million (2009 restated: GBP6.0 million) and includes the early repayment of all the Group's bank loans totalling GBP3.3 million. In addition, GBP1.3 million of HP obligations were repaid during the year. After financing, there was a net cash outflow of GBP3.0 million for the year. The opening cash balance of GBP4.9 million therefore reduced to GBP1.9 million as at 31 December 2010.
Share purchases for cancellation
During the year 175,000 of the Company's own shares were repurchased at a cost of GBP0.1 million.
Pensions
The Group provides a limited number of employees with defined benefit pensions through a multi-employer arrangement with the Citrus defined benefit pension scheme ("the Scheme").
The IAS 19 accounting valuation at 31 December 2010 indicated a deficit of GBP0.8 million (2009: GBP2.4 million). Of the GBP1.6 million reduction in the IAS 19 deficit, GBP1.3 million related to changes in actuarial assumptions and has been credited directly to equity in accordance with IAS 19. The pension charge for the year in respect of the Scheme amounted to GBP0.5 million (2009: GBP0.5 million) and total contributions amounted to GBP0.7 million (2009: GBP0.8 million).
The March 2009 valuation for funding purposes indicated a deficit of GBP4.4 million. A ten year deficit recovery plan was agreed with the trustees in June 2010.
During 2010 the Government announced a change to the inflation measure for defined benefit pension schemes from RPI to CPI. The trustees have confirmed that in accordance with the existing Scheme rules, the CPI inflation measure will be used to calculate pension increases for the majority of the Scheme's members. This is expected to reduce the funding deficit by around GBP1 million and has already been taken into account in the IAS 19 valuation as at 31 December 2010.
A further funding valuation will be undertaken as at 31 March 2011 and is expected to show a material improvement in the funding position due to the change in the inflation measure to CPI and the general recovery in equity values partly offset by an increase in gilt yields.
Balance sheet
The Group's balance sheet continues to strengthen with net assets as at 31 December 2010 totalling GBP6.8 million (2009 restated: GBP5.6 million). The Group's balance sheet does not include any value for the intangible asset associated with the Group's ten year order book of GBP535 million.
Following the repayment of the Group's bank loans, the Group's only debt as at 31 December 2010 related to HP contracts with an outstanding balance of GBP1.9 million, excluding GBP1.2 million relating to Recycling which is classified within liabilities held for resale.
The Group held positive cash balances of GBP1.9 million as at 31 December 2010. The average daily cash balance during the year was GBP2.8 million. The Group utilised its GBP2.5 million overdraft facility for a total of 22 days with the maximum utilisation being GBP1.2 million.
Going concern
The directors acknowledge the guidance on going concern and financial reporting published by the Financial Reporting Council in October 2009. Given the broad base of the Group's contract portfolio with the public sector and high earnings visibility, the Group is well placed to manage its business risks and has adequate resources to continue in operational existence for the foreseeable future.
In December 2010 the Group renewed its overdraft facility at GBP2.5 million until June 2011. The Group is currently undertaking an exercise to review its existing banking relationships and expects to consolidate its relationships in order to improve efficiency and reduce costs. Once an appropriate banking partner has been selected, the Group will enter into a new overdraft facility for a period of at least 12 months. Based on ongoing discussions with potential banking partners, the directors are confident that sufficient facilities will be available.The directors have reviewed the Group's forecasts and budgets for the next 12 months which indicate that there will be minimal utilisation of the overdraft facility given the cash balance available to the Group.
Based on the information set out above, the directors believe that it is appropriate to prepare the financial statements on a going concern basis.
Mike Quayle
Group Finance Director
14 March 2011
Consolidated Income Statement
For the year ended 31 December 2010
Restated
2010 2009
Note GBP000 GBP000
Revenue 113,814 115,150
Cost of sales (75,852) (78,312)
Gross profit 37,962 36,838
Administrative expenses (35,323) (36,426)
Operating profit 2,639 412
EBITDA 6,094 4,076
Depreciation (2,450) (3,296)
------------------------------------------------- ----- --------- ---------
Operating profit before amortisation,
impairments and similar charges 3,644 780
Amortisation (62) (62)
Impairments and similar charges (943) (306)
------------------------------------------------- ----- --------- ---------
Operating profit 2,639 412
Finance income 77 193
Finance costs (274) (471)
Profit before taxation from continuing
operations 2,442 134
Income tax expense 6 (541) (270)
Profit/(loss) for the year from continuing
operations 1,901 (136)
Discontinued operations
Gain on disposal of SPCs - 5,620
Loss on impairment of Realm - (2,700)
Loss for the year from other discontinued
operations 4 (1,149) (757)
Total (loss)/profit from discontinued operations (1,149) 2,163
Profit for the year attributable to equity
shareholders 752 2,027
------------------------------------------------- ----- --------- ---------
Basic and diluted earnings/(loss) per share
From continuing operations 10.6 (0.8)
From discontinued operations (6.4) 12.0
Total 7 4.2 11.2
------------------------------------------------- ----- --------- ---------
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2010
Restated
2010 2009
GBP000 GBP000
Profit for the year attributable to equity
shareholders 752 2,027
Other comprehensive income/(losses)
Continuing operations
Actuarial gain/(loss) on defined benefit
pension scheme 1,357 (1,933)
Change in derivative valuations - cash flow
hedges - 62
Disposal of cashflow hedge 47 -
Income tax relating to components of other
comprehensive income (379) 524
Discontinued operations
Actuarial loss on defined benefit pension
scheme - (200)
Change in derivative valuations - cash flow
hedges - 441
Income tax relating to components of other
comprehensive income - (67)
Reclassification adjustment - disposal of
cash flow hedges - 3,442
Other comprehensive income for the year,
net of tax 1,025 2,269
Total comprehensive income for the year 1,777 4,296
--------------------------------------------- ------- ---------
Consolidated Statement of Financial Position
As at 31 December 2010
Restated Restated
2010 2009 2008
GBP000 GBP000 GBP000
Non-current assets
Goodwill 1,443 1,868 2,364
Intangible assets 123 185 4,752
Property, plant and equipment 7,981 11,891 19,683
Investments 435 447 54
Trade and other receivables 1,162 1,244 1,410
Deferred tax asset 1,040 1,375 -
------------------------------------ ------- --------- ---------
12,184 17,010 28,263
------------------------------------ ------- --------- ---------
Current assets
Inventories 1,945 2,878 3,750
Trade and other receivables 10,479 11,794 17,645
Cash and cash equivalents 1,945 4,904 1,089
14,369 19,576 22,484
Assets classified as held-for-sale 2,406 - 25,068
------------------------------------ ------- --------- ---------
Total current assets 16,775 19,576 47,552
------------------------------------ ------- --------- ---------
Total assets 28,959 36,586 75,815
------------------------------------ ------- --------- ---------
Current liabilities
Trade and other payables 16,667 20,517 25,283
Income tax payable 441 33 2,656
Obligations under finance
leases 1,050 1,503 1,540
Borrowings - 2,639 1,313
------------------------------------ ------- --------- ---------
18,158 24,692 30,792
Liabilities classified
as held-for-sale 1,761 - 27,725
------------------------------------ ------- --------- ---------
Total current liabilities 19,919 24,692 58,517
------------------------------------ ------- --------- ---------
Non-current liabilities
Borrowings - 705 11,302
Retirement benefit obligations 831 2,440 621
Long-term provisions 229 293 171
Obligations under finance
leases 859 2,771 1,800
Derivative financial instruments - 48 1,419
Deferred tax liability 286 26 650
------------------------------------ ------- --------- ---------
2,205 6,283 15,963
------------------------------------ ------- --------- ---------
Total liabilities 22,124 30,975 74,480
------------------------------------ ------- --------- ---------
Net assets 6,835 5,611 1,335
------------------------------------ ------- --------- ---------
Restated Restated
2010 2009 2008
GBP000 GBP000 GBP000
Equity
Share capital 185 187 189
Share premium account 2,227 2,227 2,227
Investment in own shares (415) (417) (729)
Capital redemption reserve 412 410 408
Hedging reserve - (34) (1,022)
Revaluation reserve - - 819
Retained earnings 4,426 3,238 2,260
6,835 5,611 4,152
Amounts recognised directly
in equity relating to
assets classified as held
for sale - hedging reserve - - (2,817)
Equity attributable to equity
holders of the parent 6,835 5,611 1,335
------------------------------- ------- --------- ---------
Consolidated Statement of Cash Flows
For the year ended 31 December 2010
Restated
2010 2009
GBP000 GBP000
Net cash flow from operating
activities 3,461 8,687
Cash flow from investing activities
Interest received 77 195
Proceeds on disposal of property,
plant and equipment 367 102
Purchase of property, plant and
equipment (983) (734)
Subordinated debt repaid 12 9
Net proceeds from sale of SPCs - 4,154
Cash disposed on sale of SPCs - (2,230)
Cash eliminated on Realm deconsolidation - (818)
Acquisition of subsidiary (net
of cash acquired) - (150)
Purchase of investment - (393)
Cash flows used in investing
activities (discontinued) (5) (289)
Net cash generated used in investing
activities (532) (154)
------------------------------------------ -------- ---------
Cash flow from financing activities
Interest paid (274) (542)
Dividends paid (486) -
Acquisition of own shares for
cancellation (84) -
Repayment of obligations under
finance leases (1,310) (1,642)
Repayment of bank loans (3,344) (1,115)
Cash flows from financing activities
(discontinued) (390) (2,678)
Net cash used in financing activities (5,888) (5,977)
------------------------------------------ -------- ---------
Net (decrease)/increase in cash
and cash equivalents (2,959) 2,556
Cash and cash equivalents at
beginning of the year 4,904 2,348
Cash and cash equivalents at
end of the year 1,945 4,904
------------------------------------------ -------- ---------
Consolidated Statement of Changes in Equity
For the year ended 31 December 2010
Share Investment Capital
Share premium in own redemption Hedging Revaluation Retained
capital account shares reserve reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1
January 2009
as originally
reported 189 2,227 (729) 408 443 819 2,688 6,045
Prior period
adjustments
(note 1) - - - - (4,282) - (428) (4,710)
---------------- -------- -------- ----------- ----------- -------- ------------ --------- --------
Balance at 1
January 2009
as restated 189 2,227 (729) 408 (3,839) 819 2,260 1,335
Profit for the
year - - - - - - 2,027 2,027
Other
comprehensive
income
Actuarial loss
on defined
benefit
pension
scheme - - - - - - (1,933) (1,933)
Actuarial loss
on defined
benefit
pension scheme
(discontinued) (200) (200)
Change in
derivative
valuations -
cash flow
hedges - - - - 62 - - 62
Change in
derivative
valuations -
cash flow
hedges
held-for-sale - - - - 441 - - 441
Disposal of
cash flow
hedges - - - - 3,442 - - 3,442
Income tax
relating to
components of
other
comprehensive
income - - - - (17) - 541 524
Income tax
relating to
other
comprehensive
income
(discontinued) - - - - (123) - 56 (67)
---------------- -------- -------- ----------- ----------- -------- ------------ --------- --------
Total
comprehensive
income for the
year - - - - 3,805 - 491 4,296
Transactions
with owners
Cancellation of
treasury
shares (2) - 312 2 - - (312) -
Share based
payments - - - - - - (8) (8)
Tax related to
share based
payments - - - - - - (12) (12)
Transfer to
retained
earnings - - - - - (819) 819 -
---------------- -------- -------- ----------- ----------- -------- ------------ --------- --------
Balance at 31
December 2009 187 2,227 (417) 410 (34) - 3,238 5,611
Profit for the
year - - - - - - 752 752
Other
comprehensive
income
Actuarial gain
on defined
benefit
pension
scheme - - - - - - 1,357 1,357
Disposal of
cash flow
hedge - - - - 47 - - 47
Income tax
relating to
other
comprehensive
income - - - - (13) - (366) (379)
---------------- -------- -------- ----------- ----------- -------- ------------ --------- --------
Total
comprehensive
income for the
year - - - - 34 - 1,743 1,777
Transactions
with owners
Cancellation of
treasury
shares (2) - - 2 - - (84) (84)
Share based
payments - - 2 - - - 15 17
Dividends - - - - - - (486) (486)
Balance at 31
December 2010 185 2,227 (415) 412 - - 4,426 6,835
---------------- -------- -------- ----------- ----------- -------- ------------ --------- --------
Reconciliation of Net Cash Flow Movement to Net Debt
For the year ended 31 December 2010
Restated
2010 2009
GBP000 GBP000
(Decrease)/increase in cash in
the year including discontinued (2,959) 2,536
Cash eliminated on Realm deconsolidation - 818
Cash outflow in the year from SPC disposal
group - 1,260
---------------------------------------------- -------- ---------
(2,959) 4,614
Cash outflow from reduction in
debt and lease financing 1,310 1,753
Repayment of bank
loans 3,344 1,320
Reclassification to disposal group
held for sale 1,502 -
Net debt eliminated on Realm deconsolidation - 7,133
Finance leases acquired with Verdia - (1,408)
---------------------------------------------- -------- ---------
Change in net debt resulting from
cash flows 3,197 13,412
New finance leases (447) (1,279)
---------------------------------------------- -------- ---------
Decrease in net debt 2,750 12,133
Net debt at 1 January (2,714) (14,847)
Net cash/(debt) at 31 December 36 (2,714)
---------------------------------------------- -------- ---------
Notes
For the year ended 31 December 2010
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 24 March 2011. In accordance with IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations' 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, consolidated statement of comprehensive income, consolidated statement of financial position and statement of changes in equity as required. The accounting policies used in preparation of this preliminary announcement have remained unchanged from those set out in the Group's 2009 annual report, apart from those policy changes noted above and the adoption of IFRIC 12 'Service Concession Arrangements'. They are also consistent with those in the full financial statements which have yet to be published. The preliminary results for the year ended 31 December 2010 were approved by the board of directors on 14 March 2011.
Prior period adjustments
IFRIC 12
IFRIC 12 'Service Concession Arrangements', requires that assets purchased by an operator of a service concession arrangement for use by the public in return for a fee from a public body, or for the right to charge the public to use the assets, are not recognised as tangible fixed assets if the public body controls or regulates what services the operator must provide with those assets and controls any significant residual interest in the asset at the end of the arrangement.
The contractual obligation at the date of the Statement of Financial Position of purchasing assets during the contract is now accrued for evenly over the life of the contract in accordance with IAS 37 'Provisions, Contingent Liabilities and Contingent Assets'. Due to up front expenditure on refurbishment of leisure centres the net spend on assets is higher than the cumulative provision and therefore a net receivable is held on the balance sheet.
Assets with a net book value of GBP2.2 million have been derecognised from the Group's balance sheet, a creditor representing lifecycle income received to date of GBP0.7 million has been derecognised and a receivable of GBP1.1 million has been recognised as at 31 December 2009. Under the Group's previous revenue recognition policy, monies received for lifecycle spend on assets were not recognised as revenue. Under the new policy and in accordance with IFRIC 12, such monies are now recognised as revenue and a corresponding amount is recognised as an expense, resulting in a nil impact on gross profit. As a result of the adoption of the new policy, revenue for the year ended 31 December 2009 increased by GBP0.4 million, profit before tax declined by GBP0.07 million and taxation reduced by GBP0.02 million. The net impact was a GBP0.05 million reduction in profit after tax.
Net assets as at 31 December 2008 have been reduced by GBP0.2 million as a result of the adoption of the new policy. In the current period a depreciation charge of GBP0.8 million would have been recognised in the income statement relating to assets which have been derecognised. Additional revenue of GBP0.6 million has been recognised in the current period under the new accounting policy, representing income received for spend on lifecycle, a corresponding expense has been recognised in cost of sales of GBP0.6 million. A charge of GBP0.6 million has been recognised in relation to the Group's contractual obligations. The net effect on income in the current period is an increase in profit before tax for continuing operations of GBP0.2 million.
Glendale Liverpool
Glendale Liverpool Limited is company set up to operate a grounds management contract in Liverpool. After review, it has been concluded that the Group does not have control as defined by IAS 27 'Consolidated and separate financial statements' and accordingly Glendale Liverpool Limited should not be consolidated in the Group financial statements. The impact of deconsolidating Glendale Liverpool Limited is to reduce revenue in the year ended 31 December 2009 by GBP2.4 million. There is no impact on profit and no material impact on the statement of financial position as a result of this restatement.
2. Going concern
The Group meets its day-to-day working capital requirements through an overdraft facility, which is due for renewal in June 2011. The Group's forecasts and projections, which have been prepared for the period to 31 March 2012 and taking into account reasonably possible changes in performance, show that the Group should be able to operate within the level of its current facility. The Group has begun discussions with its bankers about its future borrowing needs and has reason to believe that the appropriate facilities will be available when required.
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 report and accounts.
3. Critical accounting estimates
Impairment of goodwill, intangible assets, property, plant and equipment
Determining whether goodwill, intangible assets, property, plant or equipment are impaired requires an estimation of the value in use of the cash generating units. The value in use calculation involves an estimation of the future cash flows of cash generating units and also the selection of appropriate discount rates to calculate present values. In support of the assumptions, management uses experience of historic performance and expected contractual cash flows to arrive at future cash flows.
In assessing the quantum of the future cash flows generated from property, plant and equipment, management have made judgements over future cash flows arising from operational improvements and the level of forecast additional income to be generated from development projects that are not yet completed.
Onerous contract provisions
Management have made judgments over the future cash flows and discount rates used in the estimation of onerous contract provisions. In assessing the quantum of certain future cash flows management have made judgements over future cash flows arising from operational improvements and the level of forecast additional income to be generated from development projects that are not yet completed. The carrying value of the onerous contract provisions as at 31 December 2010 amounts to GBP0.7 million (2009: GBP0.4 million).
Estimate of contractual obligations on council owned assets
The contractual obligation on replacement of council owned assets within leisure centres operated by the Group is based on management's best estimate after taking into account past experience of the estimated useful economic life of assets and the present operational state of assets within the centres. The estimate is based on expected future prices of assets at the expected replacement dates.
Defined benefit liability
Management have made judgements over certain assumptions in relation to the Group's IAS 19 pension liabilities.
4. Assets of the disposal group classified as held-for-sale
The Recycling business which comprises of Ecological Sciences Limited and Verdia Horticulture Limited has been treated as discontinued operations as the business was put up for sale in November 2010. Consequently, the comparatives have been restated. In the prior year the results of Realm Services (DAC) Limited and Glendale Facilities Management Limited together with the leisure related SPCs were treated as discontinued operations. The combined results of these operations are summarised below:
2010 2009
Loss for the year from discontinued operations GBP000 GBP000
Revenue 549 9,836
Less: share of joint ventures
revenue - (2,409)
------------------------------------------------ -------- --------
549 7,427
Expenses (including goodwill
impairment) (1,898) (6,478)
Finance income - (82)
Finance costs (103) (1,842)
Share of results of joint ventures - (26)
------------------------------------------------ -------- --------
Profit before tax (1,452) (1,001)
Tax 303 244
Loss for the year from discontinued
operations (1,149) (757)
------------------------------------------------ -------- --------
5. Business segments
Operating segments have been determined based on the reports regularly reviewed by the Board of Directors that are used to make strategic and operational decisions. The Group Board of Directors is considered to be the Chief Operating Decision Maker (CODM). The Board of Directors review the business based on the nature of the services provided. Parkwood is organised into four operating divisions: Leisure, Glendale, Healthcare and Parkwood Consultancy Services (PCS). Glendale's performance is further analysed by service being: Glendale Core, Golf, and Horticulture.
The Board assess performance of the operating segments primarily based on a measure of adjusted operating profit being operating profit before amortisation, impairments and similar charges. The reportable segments derive their revenues as follows:
Leisure provision of leisure facility management services to local authorities and provision of private health and fitness clubs
Glendale core grounds management, arboriculture, countryside services and landscaping
Golf golf course management including retail sales
Horticulture plant production and sales
Healthcare nursing agency, LINk and patient transport services
PCS operational project, lifecycle and bid management fees
Glendale Grounds Management and Glendale Countryside have been reported together as Glendale Core given the similar economic characteristics which exist in the markets in which the two operating segments trade.
Although PCS and Healthcare do not meet the quantitative thresholds required by IFRS 8, they are reported separately since their performance is monitored and reported to the Board of Directors and they have different economic characteristics to other segments.
The Group does not have any major customers which represent more than 10% of the Group's revenue. The measurement policies used for segment reporting reflect those used for internal reporting and for the Group's financial statements. Inter-segment sales are charged at arms length prices. Segment assets comprise all assets allocated to the segment excluding costs of investments and intercompany loans.
Adjusted
Total operating Gross
revenue Depreciation profit assets Net assets
Year ended 31
December 2010 GBP000 GBP000 GBP000 GBP000 GBP000
Leisure 64,422 393 4,588 11,514 5,751
Glendale core 40,328 1,625 1,379 10,742 3,653
Golf 3,573 203 (580) 1,501 (1,913)
Horticulture 2,472 114 (1,058) 1,249 (2,583)
Healthcare 2,279 17 (11) (611) (793)
PCS 1,860 18 1,033 1,106 676
All other
segments 1,453 80 (1,707) 1,052 1,399
---------------- --------- ------------- ----------- -------- -----------
Total Group
(continuing) 116,387 2,450 3,644 26,553 6,190
Discontinued
operations 651 268 (965) 2,406 645
---------------- --------- ------------- ----------- -------- -----------
Total Group 117,038 2,718 2,679 28,959 6,835
---------------- --------- ------------- ----------- -------- -----------
Year ended 31
December 2009
(restated)
Leisure 61,425 426 4,225 13,997 5,931
Glendale core 43,024 2,120 938 13,337 644
Golf 4,259 352 (381) 2,780 (562)
Horticulture 3,004 140 (1,264) 2,021 (1,091)
Healthcare 3,792 108 (337) (1,185) (964)
PCS 1,317 23 (286) 1,506 380
All other
segments 1,760 127 (2,115) 2,799 858
---------------- --------- ------------- ----------- -------- -----------
Total Group
(continuing) 118,581 3,296 780 35,255 5,196
---------------- --------- ------------- ----------- -------- -----------
Discontinued
operations 7,447 563 2,282 2,773 415
---------------- --------- ------------- ----------- -------- -----------
Total Group 126,028 3,859 3,062 38,028 5,611
---------------- --------- ------------- ----------- -------- -----------
All other segments includes the revenues generated by the Broadwater and Cherwell DBOM (design, build, operate and maintain) contracts and expenses of the Group's head office function. They are not included within the reportable operating segments as they are not reported to the Board and are below the IFRS 8 quantitative disclosure thresholds. The Group's head office function is not an operating segment as defined by IFRS 8. Funding for the DBOM companies is provided by the local authority so there is no impact on the Group's debt and the underlying assets and related funding do not appear on the Group's balance sheet as the local authority retains ownership.
All revenues and non current assets arise within the United Kingdom. The revenue from external customers reported to the Board is measured in a manner consistent with that in the income statement. The totals presented for the Group's operating segments reconcile to Group revenues as follows:
Intercompany
revenue External revenue
Restated Restated
2010 2009 2010 2009
GBP000 GBP000 GBP000 GBP000
Leisure 1,175 2,038 63,248 59,387
Glendale core 256 189 40,072 42,835
Golf 9 - 3,564 4,259
Horticulture 374 326 2,098 2,678
Healthcare - - 2,279 3,792
PCS 459 766 1,401 551
All other segments 300 112 1,152 1,648
Group revenues 2,573 3,431 113,814 115,150
-------------------- ------- --------- -------- ---------
During the year the Group entered into finance lease arrangements. The capital value at the inception of the leases was GBP76,000 (2009: GBPnil) in the Leisure business, GBP371,000 (2009: GBP910,000) in the Glendale core business, GBPnil (2009: GBP111,000) in Horticulture, GBPnil (2009: GBP251,000) in Golf and GBPnil (2009: GBP7,000) in all other segments.
The adjusted operating profit (operating profit before amortisation, impairments and similar charges) reported to the Board is measured in a manner consistent with that in the income statement.
6. Taxation
The effective tax rate for the year was 22%. The current year charge was lower than the basic UK rate mainly due to adjustments in respect of prior period taxation.
7. Earnings per Ordinary share
Earnings per share (EPS) has been calculated on the weighted average number of ordinary shares in issue throughout the year of 17,963,080 shares (2009: 18,034,443 shares). The diluted earnings include the effects of all potentially dilutive ordinary shares, which increases the average number of shares to 17,982,241 (2009: 18,041,443). Earnings, which are based on profits on all activities after tax from continuing operations, amounted to a profit of GBP1,901,000 (2009 restated: GBP135,000 loss). The weighted average number of ordinary shares used to calculate diluted EPS has been adjusted for the conversion of share options. Share options which are anti-dilutive for this period but could potentially dilute earnings per share at a later date are considered immaterial.
2010 2010 2009 2009
Restated Restated
Earnings Earnings Earnings
post per share Earnings per share
tax (pence) post tax (pence)
GBP000 GBP000 GBP000 GBP000
Basic earnings/(loss) from
continuing operations 1,901 10.6 (136) (0.8)
Amortisation of intangible
assets 62 0.4 62 0.4
Impairments and
similar charges 943 5.2 306 1.7
Adjusted basic and diluted
earnings from continuing
operations 2,906 16.2 232 1.3
----------------------------- --------- ----------- ---------- -----------
Basic earnings/(loss) from
continuing operations 1,901 10.6 (136) (0.8)
Basic earnings from
discontinued operations (1,149) (6.4) 2,163 12.0
----------------------------- --------- ----------- ---------- -----------
Total basic earnings 752 4.2 2,027 11.2
Diluted earnings/(loss) from
discontinued operations (1,149) (6.4) 2,163 12.0
----------------------------- --------- ----------- ---------- -----------
8. Annual report
The Annual Report will be posted to shareholders on or around 24 March 2011. 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
This information is provided by RNS
The company news service from the London Stock Exchange
END
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