26th Apr 2005 10:30
Sherwood Group PLC26 April 2005 Sherwood Group plc AGM Statement Sherwood Group plc ("Sherwood" or "the Group") is a designer and supplier ofgarments, principally for the lingerie, swimwear and nightwear markets. At today's Annual General Meeting, Noel Jervis, Chairman, made the followingcomments: Trading "In the first Quarter of 2005, sales and operating profits in the continuingbusiness were in line with expectations. The Autumn/Winter order book is stilltaking shape, but at this stage the year is progressing satisfactorily. We arevery pleased to announce an agreement with Ted Baker to design and sell underlicence a full range of Ladies' lingerie, swimwear and nightwear products in theUK and Ireland. This is a tremendous coup for our Branded Division anddemonstrates their excellent design and procurement flair, as well as theirunderstanding of the market in general and the Ted Baker consumer in particular. Pension Deficit "The deficit has risen substantially in the last two years, despite anadditional cash contribution of £1.3m since July 2003, and at 31 December 2004stood at £8.1m - on an FRS 17 basis. We await the Government's new regulationsin respect of 'scheme specific funding' and the funding mechanism by which anyresulting deficit must be made good. These regulations are expected to be inplace by September 2005. In the meantime, we have welcomed an independentfinancial review of the Group's affairs by Deloittes on behalf of the PensionTrustees in respect of an offer, first made in August 2004, to inject £3m intothe fund and to reduce the burden of future additional annual contributions. TheTrustees are still considering the findings of the Review but have alreadyindicated that they are likely to require a larger amount. Cash Distribution to Shareholders "It has been the Board's policy over the last two years to return surplus cashto shareholders. In recent months we have formulated a share buy-back scheme,which would accomplish this in a capital form. We are still collecting cashfrom the sale of redundant assets and reorganising the Group's Balance Sheet toensure sufficient enabling distributable reserves. Apart from the delayed saleof the Borrowash building, these tasks will be complete by June 2005. However,over the last few months, we have received legal and financial opinions that theBoard should not contemplate any return of cash to shareholders until the newpension regulations are at a stage where the scheme specific deficit can beestablished under the new regulations and the call on the Group's cash reservesand/or future earnings more accurately assessed. If cash is returned toshareholders without a full assessment of the pension liabilities, the Groupruns the risk of an order from the new Pensions Regulator, demanding it make asubstantial contribution to the pension scheme, and it is our intention toensure no such order - which otherwise might jeopardise the future operations ofthe Group - is made. AIM As previously indicated, the Group announced on 22 April 2005 its intention tomove from the Official List to AIM. The Board believes this move is justified bythe smaller and simplified Group operation going forward and will also bringreduced regulatory burden and cost of compliance and enable a reduction in headoffice costs. Dealings on AIM are due to commence on 24 May 2005. The Board "I am delighted to announce the appointment of Michael Hobbs as a non-executiveDirector with effect from 1 May 2005. Michael has had a successful career inretailing and was Chief Executive of Adams plc, the childrenswear multiple fornine years until February 2005. I also have to announce that later this yearMartin Webster will stand down as Finance Director. He has held this positionfor four years and has worked very closely with me in particular in my threeyears in the chair. He has done a tremendous job of reorganising the Group'saffairs and will leave after having accomplished everything we set out to dotogether over this period. I want to pay personal tribute to his long and hardwork, his loyalty and dedication and his technical skill in dealing with amultitude of issues. The Group is now down to one single and smaller businessand it is appropriate that Laurence Ford, who has been Finance Director of theGarment Division, should now become Finance Director of the plc when Martinleaves later in the year." 26 April 2005 ENQUIRIES: Sherwood Group plcNoel Jervis, Chairman Tel: 07710 491083Martin Webster, Finance Director Tel: 0115 946 1070 College HillGareth David Tel: 020 7457 2020 / 07774 444 162 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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