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Parkmead Group (The) (PMG)

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Wednesday 21 March, 2007

Parkmead Group (The)

Interim Results

Parkmead Group (The) PLC
21 March 2007







21 March 2007

                      The Parkmead Group plc (the 'Group')



            Interim Results for the 6 months ended 31 December 2006



Interim results summary



•  Operating loss reduced to £19,000 - (2005 - loss £1,593,000)

•  Cash balances increased from £6.2 million as at 30 June 2006 to £7.4 million
   as at 31 December 2006.

•  Loss per share of Nil pence (2005 - loss of 3.6 pence)



Significant events



•  The February 2006 acquisition of Quayside Corporate Services Limited 
   ('Quayside') is now fully integrated into the Group and is trading profitably

•  Disposal of the Group's 54% holding in Audio Visual Machines Limited ('AVM')
   for a consideration of £1,275,000 before expenses leading to a consolidated
   profit on disposal of £166,165

•  Subsequent to the half year end, the Group has disposed of its 54% holdings 
   in Yospace Technologies Limited ('Yospace') and its 19% holding in The 
   Respond Group Limited ('Respond') for a total of £7.1 million before expenses


The Group's Chairman, Colin Goodall said, 'the Group has now emerged from its
restructuring period as a profitable business focused on three activities -
business turnaround, principal finance and corporate finance. Trading in these
remaining areas so far in the second half is in line with our expectations.
Following the recent disposals of Yospace and Respond, the Group's balance sheet
has been further strengthened and the Group is now in a strong position to
exploit the many opportunities available to it.



Ends

Enquiries



The Parkmead Group plc                                020 7494 3080
Niall Doran (Chief Executive)
Gordon Ashworth (Chief Financial Officer)



Madano Partnership (PR to The Parkmead Group plc)     020 7593 4000
Matthew Moth/Mark Way




Financial Review



During the six months ended 31 December 2006 the Group recorded an operating
loss of £19,000 (2005: £1,593,000).  This included the loss of £86,000 incurred
from Yospace, and also after having amortised £303,000 of goodwill relating to
the acquisition of Quayside.



In September 2006 the Group disposed of its holding in AVM for a consideration
of £1,275,000 before expenses.  Whilst the Group made a cash profit of £768,000
on the sale of this subsidiary, on consolidation the profit on disposal amounted
to £166,000.



The Group took the opportunity to write down the value of its portfolio
investments by £303,000 (2005: £1,623,000).  This charge relates to the Group's
holding in Red M Limited and this investment is now carried at £nil (2005:
£303,000).



After minority interests the Group's retained loss for the period amounted to
£170,000 (2005: loss £3,347,000).



Consolidated profit and Loss Account Six
Months ended 31 December 2006

           Six months                                  Six months     Twelve
           to 31                                       to 31          months
           December                                    December       to 30
           2006                                        2005           June
                                                                      2006

           Continuing   Discontinued          Total    Continuing     Continuing Operations    Discontinued       Total

                                                                      Existing Acquisitions

          (unaudited)    (unaudited)    (unaudited)    (unaudited)     audited      audited         audited     audited

                 £000           £000           £000           £000        £000         £000            £000        £000

Turnover     2  3,370          2,816          6,187          6,592       4,552          488           7,967      13,006
                 

Cost of sales    (254)        (1,741)        (1,995)        (2,040)          -         (317)         (4,673)     (4,990)
               

Gross profit     3,116          1,075          4,192          4,552       4,552          171           3,294       8,017
                

Administrative
expenses       (3,380)          (912)        (4,292)        (6,197)     (7,096)         (47)         (3,285)    (10,428)
Other

Operating     
Income              82             -              82             52         106           -               -          106

Operating
(loss)/profit    (182)            163           (19)        (1,593)     (2,438)          124               9     (2,305)

Profit on sale
of investment,                    
provisions
released/
(made) against
investments in
the period                                     (303)        (1,623)                                              (2,671)

                                            
Profits on
disposal of
subsidiaries/
investments                                      166             -                                                   364

                                                
Net interest                                                                                                         
receivable
(payable)                                         43           (64)                                                  (2)

                                        
Loss on
ordinary
activities
before
taxation                                       (113)        (3,280)                                              (4,613)

Taxation                                         (5)             -                                                  (42)
                                               

Profit (loss)
on ordinary                            
activities
after taxation                                 (118)        (3,280)                                              (4,655)

Minority
interest                                        (52)           (67)                                                 (87)

Retained loss
for the period                                 (170)        (3,347)                                              (4,742)

Earnings      
(loss)  per                                                
share - basic
and diluted
(pence)        3                                 Nil         (3.62)                                               (2.80)



Consolidated statement of
total recognised gains and
losses

                               Six months     Six months    Twelve months
                                    to 31          to 31            to 30 
                                 December       December             June
                                     2006           2005             2006
                               (unaudited)    (unaudited)         audited
                                     £000           £000             £000

Loss for the financial
year attributable to              
members of the parent
company                             (170)        (3,347)          (4,742)
Write down of previous                  
revaluation of fixed                   
asset investments                       -          (212)          (1,096)
Unrealised profit on                  
partial disposal of                               
subsidiary                              -            326                -                      
Currency translation of                                
foreign currency                    
investments                            30              -               10

Total recognised losses
for the financial period            (140)        (3,233)          (5,828)



Consolidated balance sheet as at 31 December 2006

                                                As at 31                     As at 31                    As at 30
                                                December                     December                        June 
                                                    2006                         2005                        2006
                                             (unaudited)                  (unaudited)                     audited
                                                    £000                         £000                        £000
Fixed Assets
Intangible asset                                   5,921                        1,989                       8,177
                                             
Tangible assets                                      132                          510                         598
                                                 
Investments                                4       2,816                        3,757                       3,059

                                                   8,869                        6,256                      11,834

Current Assets
Stock                                                  -                          178                         253
Debtors                                    5       4,211                        2,699                       6,697
Cash at bank and in hand                           7,375                          535                       6,207

                                                  11,585                        3,412                      13,158

Creditors
Amounts falling due within one year        6     (1,721)                      (5,610)                     (5,188)
                                                                            
Net current assets (liabilities)                   9,865                      (2,198)                       7,970
                                                

Total assets less current liabilities             18,733                        4,058                      19,805
                                                

Creditors

Amounts falling due after one year                 (487)                        (688)                       (695)
                                                 
Provision for liabilities and charges                  -                            -                       (109)
                                              

Net assets                                        18,247                        3,370                      19,001
                                    


Capital & reserves

Called up share capital                           18,417                        4,620                      18,417
                                              
Share premium account                                  -                       19,430                           -
                                                                                                         
Revaluation reserves                                   -                          882                           -
                                                   
Profit and loss accounts                           1,029                     (19,501)                       1,199
                                                   
Merger Reserve                                     (952)                      (2,407)                       (952)
                                               
Exchange difference on foreign
subsidiaries                                          21                            -                           -
Currency translation of foreign currency
investments                                       18,515                        3,024                      18,663
Minority shareholders' funds                       (268)                          346                         337
                                                  
Capital employed                                  18,247                        3,370                      19,001
                                                  


Consolidated cash flow statement              Six months                      Six months                           Year 
                                                   to 31                           to 31                          to 30
                                                December                        December                           June 
                                                   2006                            2005                            2006
                                             (unaudited)                     (unaudited)                        audited
                                                    £000                            £000                           £000

Net cash from operating activities                    76                           (265)                        (3,697)
                                                  

Returns on investment and servicing of
finance                                               43                              47                            (2)

Taxation                                               -                               -                             83
                                                   

Capital expenditure and financial
investment                                          (78)                           (108)                        (1,222)

(Acquisition)/Disposal                             1,396                            (72)                          (407)
                                 

Cash in(out)) flow before use of liquid
resources and financing                            1,438                           (398)                        (5,244)

Financing                                           (64)                             -                           10,584
                                                 


Increase (decrease) in cash                        1,375                           (398)                          5,341
                                                



Reconciliation of net cash flow to           Six months                      Six months                            Year 
movement in net debt                              to 31                           to 31                           to 30
                                               December                        December                            June
                                                   2006                            2005                            2006

                                             (unaudited)                     (unaudited)                        audited
                                                    £000                            £000                           £000

Increase/(decrease) in cash in the period          1,375                           (398)                          5,341
                                                
increase (decrease) in debt and lease
financing                                             64                             -                            1,632
Loans and finance leases (acquired) with
subsidiaries                                         270                             -                              (9)
Other non cash changes - new finance leases                                                                        (13)
                                                                                                             
Change in net funds (debt)                         1,709                           (398)                          6,951
                                              
Net funds (debt) as at 1 July 2006                 5,352                         (1,599)                        (1,599)
                                               
Net funds (debt) as at 31 December 2006            7,061                         (1,997)                          5,352
                                                  



Notes to the Interim financial statements for the six months to 31 December 2006


1                    Basis of preparation



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
30 June 2006, and are unaudited. The interim financial statements do not
constitute statutory financial statements within the meaning of section 240 of
the Companies Act 1985.



Comparative figures for the year ended 30 June 2006 are an abridged version of
the Group's full accounts which carry an unqualified audit report.





Going concern



The Directors of the Group are satisfied that, after having made appropriate
enquiries, that the Group has adequate resources to continue to adopt the
concern basis in preparing the interim financial statements.





2                    Turnover


Turnover and segmental analysis by
geographical market
                                   Six months to     Six months to 31           Twelve
                                     31 December        December 2005     months to 30
                                            2006                             June 2006
                                     (unaudited)          (unaudited)          audited
                                            £000                 £000             £000

United Kingdom                             5,860                6,227           10,342

Other European countries                     311                   85              953
                           
USA and Canada                                13                  215            1,697                         
                                         
Other                                          2                   65               14

                                           6,187                6,592           13,006



3                  Loss per share

The calculation of basic earnings per share is calculated on a Group loss of
£169,510 (6 months to 31 December 2005 loss of £3,347,357 and year to 30 June
2006 loss of £4,741,702) and a weighted average number of ordinary 5p shares in
issue during the period of 368,341,780 (6 months to 31 December 2005 92,425,254
and year to 30 June 2006 171,332,649).

Due to the loss of £169,510 (6 months to 31 December 2005 loss of £3,347,357 and
year to 30 June 2006 loss of £4,741,702) there is no further dilution of the
earnings or the number of shares of 368,341,780 (6 months to 31 December 2005
92,425,254 and year to 30 June 2006 171,332,649).




4          Investments

                                                                        As at 01 July
                                                                                 2006
                                                                          (unaudited)
                                                                                 £000

As at 01 July 2006                                                              3,059
Additions                                                                          60
Disposals                                                                           -
Provided during the period                                                      (303)
Revaluation                                                                         -

31 December 2006                                                                2,816


                                                                               



5                    Debtors


Debtors                                                            Six months       Six months           Year 
                                                                        to 31            to 31          to 30 
                                                                     December         December           June
                                                                         2006             2005           2006

                                                                  (unaudited)      (unaudited)        audited
                                                                         £000             £000           £000

Trade debtors                                                           1,149            2,150          2,748
                                                                
Amounts recoverable on contracts                                          -                263            112
                                                                     
Other Debtors                                                           2,790               27          3,310
                                                                    
Prepayments and accrued income                                            272              259            527
                                                                        
                                                                        4,211            2,699          6,697

Due in more than one year                                                   -                -              -

                                                                        4,211            2,699          6,697




6                     Creditors

Creditors                                                     Six months to     Six months to        Year to
                                                                31 December       31 December        30 June
                                                                       2006              2005           2006
                                                                (unaudited)       (unaudited)        audited
                                                                       £000              £000           £000

Bank overdraft                                                            -               174            207
                                                                       
Short-term loans                                                         30             1,525            202            
                                                                                             
Obligations under finance leases and hire purchase contracts              -                               19
                                                                                              
Trade creditors                                                         532             1,255          1,507            
                                                                     
Corporation tax                                                         259                17            793
                                                                    
Other taxes and social security costs                                   243               580            628
                                                   
Other creditors                                                         112               453             77
                                                                
Accruals and deferred income                                            546             1,606          1,753            
                                                                      1,721             5,610          5,188
                                                                                                       





7         Cash Flows


Reconciliation of operating loss to net cash flow from             Six months       Six months           Year 
operating activities                                                    to 31            to 31          to 30 
                                                                     December         December           June
                                                                         2006             2005           2006
                                                                  (unaudited)      (unaudited)        audited
                                                                         £000             £000           £000

Operating loss                                                           (19)          (1,593)        (2,305)
                                    
Depreciation                                                                2              145            179
                                                                      
Amortisation                                                              318              369            427
                                                                      
Increase(decrease) in stocks                                                -             (233)           (23)
                                                                     
Increase (decrease) in debtors                                            619             (228)        (2,973)
                                                                     
Increase (decrease)  in creditors                                       (782)             1,275            898
                                                                   
Increase in other provisions                                               21                 -            100
                                                                          
Net cash flow from operating activities                                   158             (265)        (3,697)
                                                                      





8         Post balance sheet events

On 1 February 2007 the Group disposed of its 54% holding in Yospace Technologies
Limited for a consideration of £5.0 million before expenses.  On 16 February
2007 the Group disposed of its 19% holding in The Respond Group Limited for a
consideration of £2.1 million before expenses.


Interim statement

Copies of the Interim statement will be available to the public free of charge
from the Company's registered office: 22/23 Old Burlington St, London W1S 2JJ.
A copy of the Interim statement will also be made available on the Group's
website, www.parkmeadgroup.com.




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