Parkwood sees opportunity in spending cuts

PRESTON-based Parkwood Holdings, which manages golf courses and swimming pools, believes Government spending cuts could lead to more business.

It recorded a sharp increase in sales in its core business last year and thinks hard-pressed councils may seek greater efficiencies by turning to the private sector.

It already has an order book with the public sector worth £471m and said the forthcoming election and the pressure to cut public debt could present it with more opportunities.

“This will present opportunities for Parkwood where local authorities may wish to involve the private sector to a greater extent than previously, particularly in hard pressed metropolitan and unitary authorities where services have largely been maintained in-house,” said the company.

It added: “Parkwood will tread carefully and ensure that it retains the confidence of its existing customers, presenting them with real value for money alternatives that benefit local communities. Parkwood will continue to predominantly provide services to the public sector.”

Its leisure division, which manages sports halls and catering facilities, reported a 14% increase in sales to £61m in the year to December. This accounted for around half of the group’s £118m turnover, up 1% on 2008.

However, group pre-tax profit of £1.5m in 2008 fell to a £900,000 loss during the year. Parkwood said the cash positive leisure arm now underpinned the group

Operating profits in the division rose by 11% to £4.3m, but this gain was undermined by losses in Parkwood’s Glendale business, which manages golf courses and other outdoor areas.

The business accounted for £53m of group sales, down 8% and it incurred a loss of £1.3m largely due to a one-off, non-cash charge worth £1m.

In recent months Parkwood disposed of its leisure-related PFI investments, generating a profit of £5.5m, and put a special purpose company, Realm Services, into administration following a contractual dispute with the Ministry of Defence.

The group said it had reduced net debt from £14.8m to £2.5m and will pay an interim dividend of 1.2p a share on April 1.