10th Jan 2006 12:00
Sherwood Group PLC10 January 2006 Sherwood Group plc Update Pension Scheme The Company has now received the approval of the Pension Regulator to itsapplication seeking agreement to a share buy-back. A share buy-back is approvedproviding certain obligations to the Company's final salary pension fund aremet. The principal obligations are: • An immediate cash injection to the scheme of £7.5 million and 6additional monthly payments of £40,000 to the 30 June 2006 • Security to be given to the Pension Trustees by way of a firstcharge over the Long Eaton property capped at the difference between the pensiondeficit calculated on a FRS17 and a Pension Protection Fund ("PPF") basis,presently estimated at £745,000. The security will be released once the PPFdeficit is eliminated • Commitments have also been given with respect to futuredividends, (unless paid out of earnings and having paid any Pensioncontributions) and borrowings except for the prospect of a debtor finance schemeand a normal bank overdraft. These commitments will fall away once the PPFdeficit is eliminated • The Company and Pension Trustees are committed to agreeing aScheme Specific Funding ("SSF") valuation by no later than 30 June 2006resulting in a new Schedule of Contributions with any additional payments tocommence July 2006 The directors believe that the determination of the Pension Regulator is thebest deal available to the Company, and will now discuss these terms with majorshareholders before proceeding with the share buy-back. This determination will provide greater certainty, both for the members of thePension Scheme and for the strategic development of the business. The company will continue working in partnership with the Pension Trustees inorder to reduce the ongoing risks in the pension scheme both for the benefit ofscheme members and for the company. This will include a proposal to offer theopportunity to deferred members, comprising 79% of the membership, to transfertheir benefits out of the fund. Sale of the Borrowash Building The sale of the Borrowash property is progressing and we expect that completionshould now be achieved by the end of April 2006. Share Buy-Back Following the Pension Regulator's clearance for a share buy-back and thesubsequent receipt of proceeds from the sale of the Borrowash property, theBoard will be able to propose the terms for a return of capital to shareholders. We expect to despatch a circular to shareholders once the sale of theBorrowash property is completed, in which the Board will explain how it plans toreturn surplus cash whilst still retaining appropriate funding in the companyfor growth and seasonal working capital requirements. Trading Update Sales in the last quarter of 2005, whilst down on last year, have performed toexpectations throughout challenging retail trading conditions. I am alsopleased to announce that Branded sales have continued to grow year on year withfurther growth anticipated in 2006 particularly with Ted Baker sales now comingon stream. The proposed reorganisation announced in November has now beencompleted and we start 2006 in good shape having reduced the workforce incontinuing operations by over 25% in the year. Orderbooks for the first quarterof 2006 are in line with expectations. NOEL JERVIS Chairman Board Changes Noel Jervis will stand down as Executive Chairman, and leave the Board, witheffect from 31 January 2006. Michael Hobbs, currently a non-executive Director,will assume the role of Chairman (non-executive) from the same date. Carol Duncumb, Chief Executive, comments: "The Board wishes to thank Noel for his constant support, experience andefforts. We are delighted to welcome Michael as the new Chairman and lookforward to working with him during the next phase of the company's development." 10 January 2006 ENQUIRIES: Sherwood Group plc Tel: 0115 946 1070Noel Jervis, ChairmanCarol Duncumb, Chief ExecutiveLaurence Ford, Finance Director College Hill Tel: 020 7457 2020Gareth David This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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