Parkwood Holdings plc ("the Group")

Realm Services (DAC) Limited - Update

26 January 2010

On 17 August 2009 the Group announced that a subsidiary special purpose company, Realm Services (DAC) Limited, had been placed into Administration following a contractual dispute with the Ministry of Defence. The appointment of an Administrator invoked a 150 day suspension period during which it was hoped that a commercial resolution could be found. It has not been possible to achieve this objective and the Group entered into a protocol agreement today which will result in a termination of the contract at the end of February 2010. 

Negotiations are ongoing with the Ministry of Defence for a compensation settlement in connection with the early termination. This process could take some time to conclude and the result is uncertain. The Parkwood Group Board will make a final judgement on the carrying value of the Realm investment when the Preliminary Results are published but currently expect to fully impair the carrying value of the Group's investment which would result in a £2.7million exceptional charge in the profit and loss account.

For further information, please contact:

Parkwood Holdings PLC

Tony Hewitt, Chairman                            01772 627111    

Mike Quayle, Group Financial Director      01772 627111

Brewin Dolphin Investment Banking

Neil Baldwin                                           0845 213 4726

Derrick Lee                                            0845 213 2077