Final Preliminary Results

RNS Number : 2977X

Worthington Group PLC

23 June 2008

 



Worthington Group plc ('the Company')

Results for the Year Ended 31 March 2008

The Company recorded a profit for the period of £49,000 ( 2007: loss of £278,000). Net asset value has increased by £709,000 to £3,353,000 ( 2007: £2,644,000 ). This is mainly as a result of a reduction in the pension scheme liabilities, and the net asset value per ordinary share now stands at 28p ( 2007 : 22p ). Administration expenses include £100,000 ( 2007: £75,000) incurred in respect of pension costs.

During the year we received the balance of monies due on the sale of the Eccleshill site of £287,500 plus substantial interest leaving us with cash balances of £1m at the year end. 

As previously reported, our former subsidiary Worthington Manufacturing Ltd (which was sold to Jessop and Baird Hong Kong) was put into Administration, our investment in the business having been fully provided for in the 2007 accounts. Our 44% stake in Trimmings by Design Ltd now remains our sole investment and remains profitable despite tough market conditions.

Turning to the Keighley site, I have now personally had the opportunity to meet with the Planning Officer to discuss the future of the site and have appointed architects to produce some ideas for submission, which may involve an application for change of use. The site itself is positioned where it is clearly more suitable for residential development than for further industrial usage because of road access. Transportation difficulties for heavy lorries coming through the adjacent housing to the site has generated complaints from local residents. We have put this case to the Planning Officers for their consideration and negotiations are in hand for a few alternative scenarios. However, across the road there is a new Asda development, so our site has considerable potential. Currently there are leases on the property which tie in very nicely with the gestation time needed to bring some of these proposals to fruition. In the meantime we have reduced the factory size by demolition, so as to avoid unnecessary business rates on an area which was unlettable. Further office space has been let to fit in with the lease periods of existing tenants.

The Pension Scheme deficit has reduced substantially in the year and the liability in the balance sheet on an IAS 19 basis now stands at £918,000. Despite a fall in the value of the Scheme's investments, due to market conditions, the present value of the scheme liabilities has fallen by a bigger amount. The discount rate used to calculate these future liabilities has increased as a result of the rise in corporate bond yields due to credit market conditions.

Discussions with the Scheme Trustees have now concluded and a new funding plan, as required by pensions legislation, is being implemented to reduce the Scheme deficit. In the 2008 reporting period we paid £264,000 into the Scheme and this was due to increase by 3% under the existing agreement for the forthcoming year. We have now agreed to adjust the contributions going forward to a figure of £140,000 per annum plus a 25% share of the Company's profits each year. 

The pension scheme funding risk continues to represent the principal risk factor faced by the Company. The investment performance of the scheme assets together with the levels of head office costs and the rental income continue to be monitored closely by the Board as key performance indicators. Both rental income and head office costs are in line with our expectations. Now that a new contribution plan has been established for the next three years the Trustees will undertake a review of the investment managers' performance and make changes if they deem it necessary. 

Moving forward the Board intends to use the cash available on the balance sheet to lend commercially for appropriate transactions, possibly for closed loop bridging loans where there is little risk and where proof of funds for repayment exists. 

2008 has been a frustrating year as we have not found a viable proposition for the future development of the Company and in the last six months we have been even stricter on our due diligence given the current economic uncertainties. However, given the tight credit environment we are now living with I believe the Company's cash and assets will help attract more suitable acquisition opportunities than we have seen thus far. 

J C Dwek CBE

Chairman

23 June 2008

Worthington Group plc

Income Statement

for the year ended 31 March 2008

			Notes		2008  £'000		2007  £'000
							As re-stated
Continuing Operations
Revenue			2		146		313
Cost of sales					(43)		(31)
					_______		_______
Gross profit					103		282
Administrative expenses					(204)		(210)
					_______		_______
Operating (loss)/profit					(101)		72
Investment revenues			3		123		107
Finance costs			4		(39)		(48)
Share of results of associates					66		79
Loss on disposal of interest in associates			5		_____-		(488)
Profit/(loss) before taxation					49		(278)
Taxation			6		____-		_____-
Profit/(loss) after taxation for the current year					__49		__(278)
Earnings/ (loss) per ordinary  Share - basic and fully diluted			7		0.4p		(2.4)p

There were no recognised gains or losses during the year other than those reported above.

All items are derived from continuing operations.  

Worthington Group plc

Statement of Recognised Income and Expense

		2008		2007
		£'000		£'000
Actuarial Gain/(loss) on retirement benefit obligation		660		(82)
Prior period adjustment		_383		___-
Net income/(expense) recognised directly in equity		1,043		(82)
Profit/(loss) for the financial year		___49		_(278)
Total recognised income and expense for the period		_1,092		_(360)

During the year ended 31 March 2008 the Company changed its accounting policy in respect of investments in associates. The Company previously measured its investments in associates at cost. The Company no longer produces consolidated financial statements following the solvent liquidation of it's subsidiaries in March 2007 and in accordance with IAS 28 'Investment in associates' now accounts for investments in associates under the equity method with the share of associates profit or loss included in the Company income statement for the year.  

Worthington Group plc

Balance Sheet

At 31 March 2008

	2008			2007
	£'000	£'000		£'000	£'000
				As re-stated
Non-current assets
Investment property	1,800			1,800
Interests in associates	805			783
Other financial assets	____800			____800
		3,405			3,383
Current assets
Trade and other receivables	32			321
Cash and cash equivalents	___1,000			____882
		__1,032			__1,203
Total assets		4,437			4,586
Current liabilities
Trade and other payables	____166			__139
	____166			__139
Non-current liabilities
Retirement benefit obligation	___918			__1,803
	___918			__1,803
Total liabilities		(1,084)			(1,942)
Net assets		_3,353			_2,644
Equity
Called up share capital		11,807			11,807
Share premium account		9,836			9,836
Profit and loss account		(18,290)			(18,999)
Total Equity		__3,353			__2,644

Worthington Group plc 

Cashflow Statement

for the year ended 31 March 2008

	2008			2007
		£'000			£'000
				As re-stated
Cash flow from operating activities
Operating (loss)/profit		(101)			72
Depreciation		-			10
Movement in trade and other receivables		289			4
Movement in trade and other payables excluding pension obligation		27			(115)
Payments to pension scheme		(264)			(257)
Net cash outflow from operating activities		(49)			(286)
Cash flow from financing activities
Interest paid		-			(21)
Repayment of short term loans		-			(229)
Repayment of bank borrowings		____-			(1,500)
Net cash used by financing		____-			(1,750)
Cashflow from investing activities
Interest received		123			67
Receipts from subsidiary undertaking		-			3,625
Loans to associates		-			(75)
Dividends received from associated undertakings		____44			_____-
Net cash generated by investing activities		___167			_3,617
Increase in cash and cash equivalents		118			1,581
Cash and cash equivalents at beginning of year		__882			__(699)
Cash and cash equivalents at end of year		1,000			___882

Worthington Group plc

Notes forming part of the preliminary announcement for the year ended 31 March 2008

1.   Basis of preparation

The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS) and the International Reporting Interpretations Committee ( IFRIC) interpretations applicable at the balance sheet date, and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS. The principal accounting policies adopted by the Company are set out in the Company's Annual Report and have been applied consistently throughout the reporting period.

The financial information in this announcement, which was approved by the Board of Directors on 23 June 2008, does not constitute the Company's statutory accounts for the years ended 31 March 2008 or 2007, but is derived from these accounts.

Statutory accounts to 31 March 2007 have been delivered to the Registrar of Companies and those for 2008 will be delivered following the Company's annual general meeting. The auditors have reported on these accounts; their reports were unqualified and did not contain statements under S237(2) or (3) of the Companies Act 1985.

The financial information has been prepared on the historical cost basis, modified to include the revaluation of certain fixed assets.

2.   Segmental Analysis

The Company has selected business as the primary segment and geography as its secondary segment. Disclosure is in accordance with International Accounting Standard 14. The Company only has one business relating to property rental and management and all operations are continuing and in the UK.

3.   Investment Revenues

	2008	2007
	£'000	£'000
Loan note interest	52	52
Interest on bank deposits	___71	___55
	__123	__107

4.   Finance Costs 

	2008	2007
	£'000	£'000
Bank loans and overdrafts repayable within 5 years	-	21
Pension scheme net finance charge	39	27
	39	48

5.  Loss on disposal of interests in associates

	2008	2007
	£'000	£'000
Loans to associate written off	-	75
Provision against loans to associate	-	300
Fixed asset impairment provisions	-	61
Redundancy and other costs of disposal	____-	___52
	____-	__488

6.   Taxation

No corporation charge has been provided for 2008 or 2007 as a result of the availability of various reliefs.

7.    Earnings per share

The earnings per share has been calculated using the weighted average number of shares in issue during the relevant financial periods. The weighted average number of shares in issue during the year was 11,807,013 (2007: 11,807,013) and the profit after taxation was £49,000 ( 2007: loss £278,000). 

There is no difference between the basic and diluted loss per share in either year.

8.     Copies of the Annual Report

Copies of the Annual Report are available from the Company Secretary at the registered office which is situated at Suite 1, Courthill House, 66 Water Lane, Wilmslow, Cheshire, SK9 5AP. The annual report and AGM notices will also be available for download on the Company's website www.worthingtongroupplc.co.uk

Enquiries:		Worthington Group plc
Joe Dwek CBE, Chairman		Tel: [phone]

 

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