15th Oct 2007 07:01
Worthington Nicholls Group plc15 October 2007 Update Regarding Reviews, Board Composition and Trading On 19 September 2007, Worthington Nicholls Group plc ("Worthington Nicholls", the"Company" or the "Group"), installers of air conditioning, heating, ventilation and chilled water systems, announced, inter alia, that it was undertaking a review of its accounting policies, had initiated a strategic and operationalreview and would seek to update the market on these matters and on the likelyoutturn for the financial year ending 30 September 2007 by the second half of October. Accounting Policy Review Following the appointment of Chris Neilson to the Board as Interim Finance Director, the Audit Committee appointed KPMG to undertake a targeted accounting review. As independent advisers, KPMG has assisted management in undertaking a review ofcertain accounting matters in relation to the major subsidiaries of the Group. These subsidiaries account in aggregate, for approximately 77% of turnover and 93% of net assets. The scope of the review was designed primarily to: 1. determine the suitability of certain accounting policies of the Group and review what, if any adjustments, might be required to these policies; and 2. establish the accounting implications of the findings and any adjustments deemed necessary as a result thereof. Based on the work to date, the board of directors of the Company ("the Board") presently estimates that write offs totalling £6.5 million to the Group net assetsat 31 March 2007 are necessary. The impact of these adjustments on current andprior years is currently being reviewed. In addition, a substantial write off tothe goodwill held on the balance sheet is anticipated. Alongside completing the current review on the remainder of the Group, the Boardhas instructed KPMG to assist with a full review of the circumstances that haveled to these adjustments. Board Composition Since the Company's announcement on 19 September 2007, Alastair Stoddart has beeninvolved in the business full time, acting as de facto Executive Chairman. The Board recognises the need to appoint a strong Chief Executive with publiccompany experience and the skills, commitment and vision to implement and delivera credible, sustainable growth strategy for the Group. Until such an appointmentis made, Mr Stoddart will continue as the Group's Executive Chairman. Candidatesare currently being interviewed and the Company will make an announcement regardingthis role as soon as an appointment has been made. In the best interests of the Group and to allow the Board freely to identify andappoint a replacement, Mark Worthington has stepped down as Chief Executive andfrom the Board with immediate effect. Mr Worthington will remain with the Group,focused on new business development and client relationships. Trading update On the 17 August 2007, the Board announced that it anticipated turnover for theyear to 30 September 2007 would be £31.5 million producing a break-even result. Prior to the effects of the write offs referred to above, the Board believes thatthe Group will report results that are materially in line with its statement of17 August 2007. On 12 October 2007 the Group had net cash balances of £10.8 million after arecent payment of deferred consideration of £600,000 and corporation tax of£644,000. The Board considers that there are sufficient cash resources for theongoing requirements of the Group. Strategic and operational review The strategic and operational review is ongoing. The Board has appointed KPMGto assist with this exercise. The findings of this review will be presented tothe Board in due course with material matters being relayed to the market as appropriate. The long-term drivers of the Group's business, including global climatic change,the resultant legislative changes and the demand for air conditioned environmentsfrom consumers, remain intact. The Directors believe that these factors continueto provide an exciting and expanding opportunity which, with the Board's plannedchanges to management, should enable the Group to build a successful business. Enquiries: Worthington Nicholls Group plcAlastair Stoddart/Chris Neilson 0870 609 1829 Blue Oar Securities PlcRhod Cruwys/Romil Patel 020 7448 4400 Smithfield GroupKatie Hunt/Miranda Good 020 7903 0603 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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