20th Jul 2006 07:00
Watermark Group PLC20 July 2006 20 July 2006 Watermark Group plc ("Watermark", "the Company" or "the Group") Termination of Discussions and Trading Update Further to the Group's previous announcements, the Board of Watermark has notbeen able to reach agreement with potential providers of private equity financeon a structure which they believe would be in the best interests ofshareholders. Consequently, all such discussions have now been terminated bythe Board. In making this statement, the Directors of Watermark recognise the need to alsoupdate shareholders on current trading, and to explain the assumptions uponwhich this update is being made. On 18 May 2006 the Company reported that potential revenue opportunities withinthe Product's division, such as commissions and fee income, were less visible,and bearing in mind the time left to convert these during the current financialyear ending 31 December 2006, downgraded these revenues accordingly. Followingrecent discussions with potential providers of private equity, these revenuestreams have been downgraded by a further £0.6m and expected income derived fromthe sale of cargo containers has been downgraded by £0.4m. In addition, asignificant provision of £1.3m has been made for a number of doubtful debts andobsolete stock, the most significant doubtful debt being in relation to pastcommissions. There are a number of other smaller adjustments considerednecessary totalling £0.2m. Within the Services division, there is a net amountof £0.2m of adjustments to profit. The overall quantum of these adjustments is adowngrade of the 2006 profits by £2.7m to around £3.1m. As a result of the recent acquisition of International Catering Limited, theCompany is seeking confirmation of the accounting treatment of the fair value ofnet assets, negative goodwill and its positive effect on current year profits. The Directors are pleased to announce some positive news from the Servicesdivision, namely, the signing of a new long term catering contract with itslargest client bmi, as well as a new catering contract with Air New Zealandwhich will commence shortly. For further information contact: Maurice Ostro/Crispin Quail Jeremy CareyWatermark Group plc Tavistock Communications Tel: 020 8606 1300 Tel: 020 7920 [email protected] [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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