Final Results

RNS Number : 9300I

Worthington Group PLC

31 July 2012

 



Worthington Group plc ("the Company")

Results for the Year Ended 31 March 2012

Chief Executive's Statement

The year ending 31^st March 2012 has been an eventful year for the Company which has been followed by the departure of the incumbent Board on 1^st June 2012, just 2 months after the year end.

The Company recorded a loss for the year of £625,000 (2011: profit of £2,077,000) which was largely due to increased pension costs, and professional fees and costs involved in the proposed development of our Keighley site.

At the year end, our cash balances had increased slightly to £264,000, from £247,000 in 2011. Unfortunately, for actuarial reasons, the Pension Scheme deficit increased from £2,842,000 in 2011 to £3,933,000 at the end of 2012. The pension scheme funding risk continues to represent the principle risk factor faced by the Company.  The Company pays £110,000 per annum to the Pension Scheme plus 20% of any pre tax profits made in the year. The Company also pays the annual PPF levy previously borne by the Scheme. We continue to monitor closely the performance of the Scheme's investments which total £7.9m (2011: £8.3m).  Early in 2012,  the Trustees of the Scheme were in the process of advancing a secured loan of circa £3m to Rangers Football Club ("RFC"), on very advantageous terms, when RFC was placed into Administration on 14^th February 2012. The loan had never completed, but the Administrators of  RFC, Duff & Phelps, now have these funds in their solicitor's client's account and the recovery of these monies is subject to ongoing legal proceedings. Our legal team are confident that the £3m will be recovered, plus interest & costs.

Following the departure of the main tenant from the Keighley site in 2011, and in order to save business rates on an empty property, the site has now been mostly cleared. This was carried out at nil cost to the Company, and the rental income has now ceased. In 2011, the Company had every reason to believe that a planning application for a multi-use development, to include a Cinema, a Hotel, Retail outlets, Industrial and some Residential, would be favourably received by the local authority planners.  However, when the plans were submitted to the council planning office, the Company was informed that a more suitable multi - use site had been identified, and that an application for purely residential use, approximately 200 homes, was now in favour. The Company was therefore asked to withdraw its application and resubmit for this alternative use. Whilst it is unfortunate that the site no longer has the potential originally envisaged, there is still considerable value in the land for residential use. A large amount of the work done thus far for the planning application can, however, be used in this new application. The Board is currently considering how to achieve the highest possible return from the Keighley site for the Company.

Trimmings By Design ("TBD") is an associated company, in which the Company holds a 44% shareholding and also has a seat on the Board. During the year, the Company received a dividend of £44,000 from TBD (2011:  nil). The Board of TBD are to be congratulated on maintaining profitability and delivering a return for the Company, I wish them the very best for the future.  By working closely with the Board of TBD, I am confident that our return from this investment can be enhanced, and also continue to be a regular source of income for the Company in the years to come.

As I mentioned on my appointment on 1^st June 2012, I have introduced several potential acquisitions to the Company and we are currently progressing to due diligence on two potential unquoted opportunities. Announcements will follow if, and when, appropriate. To increase shareholder value, it is important to bring other businesses into the Group in order to generate healthy profits.

Your new Board is committed to increasing shareholder value in the Company.  I am confident that, over the coming year, much progress will be made, and a secure future for your Company will be made possible.

Doug Ware

Chief Executive                     31 July 2011

Worthington Group plc

Income Statement for the year ended 31 March 2012
		Total	Total
		2012	2011
	Note	£'000	£'000
Revenue	2	43	140
Cost of sales		(115)	(154)
		_________	_________
Gross loss		(72)	(14)
Administrative expenses		(165)	(151)
Share based payment		(166)	-
Pension expenses		(235)	32
		_________	_________
Operating (loss) / profit		(638)	(133)
Investment revenues	3	87	88
Fair value gain on investment property	4	-	2,200
Pension Finance costs	5	(101)	(110)
Share of results of associate	6	27	32
		_________	_________
(Loss)/profit before taxation		(625)	2,077
Taxation	8	-	-
		_________	_________
(Loss)/profit after taxation for year		(625)	2,077
		_________	_________
(Loss)/earnings per ordinary share from continuing operations
- Basic	9	(5.3p)	17.6p
-Fully diluted	9	N/A	N/A

All items are derived from continuing operations.

Statement of Comprehensive Income
For the year ended 31 March 2012
		2012	2011
		£	£
(Loss)/profit for the year		(625)	2,077
Actuarial (loss)/profit on retirement benefit obligation		(979)	328
		_______	_______
Total comprehensive (loss) /income for the year		(1,604)	2,405
Attributable to:
Owners of the parent		(1,604)	2,405
		_______	_______

Statement of Financial Position
For the year ended 31 March 2012
	2012	2012	2011	2011
	£'000	£'000	£'000	£'000
Non-current assets
Investment property	-		4,000
Interests in associates	140		157
Other financial assets	800		800
	_____		_-___
		940		4,957
Current assets
Inventories	4,000		-
Trade and other receivables	34		483
Cash and bank balances	264		247
	_____		_-___
		4,298		730
		_____		_____
Total assets		5,238		5,687
Current liabilities
Trade and other payables	106		208
	_____		_____
	106		208
	_____		_____
Non-current liabilities
Retirement benefit obligation	3,933		2,842
	_____		_____
	3,933		2,842
	_____		_____
Total liabilities		(4,039)		(3,050)
		_____		_____
Net assets		1,199		2,637
		_____		_____
Equity
Called-up share capital		1,181		1,181
Share premium account		9,836		9,836
Other reserve		10,626		10,626
Share based payment		166		-
Retained earnings		(20,610)		(19,006)
		_____		_____
Total equity		1,199		2,637
		_____		_____

Changes in Equity
For the year ended 31 March 2012
				Share
	Share	Share	Other	Based	Retained
	Capital	Premium	Reserve	Payment	Earnings	Total
	£'000	£'000	£'000	£'000	£'000
At 1 April 2010	11,807	9,836	-	-	(21,411)	232
Purchase and cancellation
of deferred shares	(10,626)	-	10,626	-	-	-
Total comprehensive income for the year	-	-	-	-	2,405	2,405
	_____	_____	_____	_____	_____	_____
At 31 March 2011	1,181	9,836	10,626	-	(19,006)	2,637
Share based compensation	-	-	-	166	-	166
Total comprehensive income for the year	-	-	-	-	(1,604)	(1,604)
	_____	_____	_____	_____	_____	_____
Balance as at 31 March 2012	1,181	9,836	10,626	166	(20,610)	1,199
	_____	_____	_____	_____	_____	_____

Cash Flow Statement
for the year ended 31 March 2012
	2012	2011
	£'000	£'000
Cash flow from operating activities
Operating loss	(638)	(133)
Movement in trade and other receivables	99	(71)
Movement in trade and other payables	(102)	109
Share based payment	166	-
Receipts from/(payments to) pension scheme	11	(180)
	_____	_____
Net cash outflow from operating activities	(464)	(275)
Cash flows from investing activities
Interest received	87	41
Dividends received	44	-
Loans advanced	-	(350)
Loans repaid	350	-
	_____	_____
Net cash generated /(used) by investing activities	481	(309)
Increase/(decrease) in cash and cash equivalents	17	(584)
Opening cash and cash equivalents	247	831
	_____	_____
Closing cash and cash equivalents	264	247
	_____	_____

Worthington Group plc

Notes forming part of the preliminary announcement for the year ended 31 March 2012.

1. Basis of preparation

Worthington Group plc is a company incorporated in the United Kingdom. The Company has its primary listing on the London Stock Exchange.

The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

The financial information in this announcement, which was approved by the Board of Directors on  31 July 2012, does not constitute the Company's statutory accounts for the years ended 31 March 2012 or 2011, but is derived from these accounts.

Statutory accounts to 31 March 2011 have been delivered to the Registrar of Companies and those for 2012 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 S498 of the Companies Act 2006.

The financial information has been prepared on the historical cost basis, except for the revaluation of certain properties and assets. The principle accounting policies applied in the preparation of the consolidated financial statements are consistent with those set out in the statutory accounts for 2011.

2. Operating segments

The Company has adopted IFRS 8 with effect from 1 April 2009. IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Company that are regularly reviewed by the Chief Executive to allocate resources and assess performance. 

As a result, following adoption of IFRS 8, the Company's only reportable segment remains property rental and management in the UK.

3. Investment Revenues
	2012	2011
	£'000	£'000
Loan note interest	52	52
Interest and arrangement fees on bridging loans	35	35
Interest on bank deposits	-	1
	_____	_____
	87	88
	_____	_____
4. Investment property	2012	2011
	£'000	£'000
Fair value at 31 March	-	4,000
	_____	_____

The directors understand that the local planning authority's current view is that the preferred use for the property in Keighley is now for high density residential development, as opposed to the multi use development previously sought. The directors are currently considering the best way to maximise value from the property with this change of use.  Previously, in 2011, the property had been valued at £4m. After correspondence with the directors who held office at the relevant date, the current directors see no reason to change this view; however, when the exact density and mix of housing is known, this value may well increase or decrease.

Revenues receivable in respect of the property amounted to £43,000 (2011: £140,000). Operating costs in respect of the property amounted to £115,000 (2011: £154,000). The operating costs in 2012 included costs related to the planning application including architects and legal fees and monies paid to Corporate Services Associates Ltd for consultancy services.

After the tenant vacated the remaining building on the property in the summer of 2011, the building was demolished. This was in order to save business rate costs on unoccupied property pending planning and redevelopment of the site. Rental income has therefore now ceased. The demolition was achieved without cost as a result of salvage sales of materials on the clearance of the site.

The directors are presently continuing to progress planning permission for a development on the site, but consider that, in due course, the site will be sold rather than the Company building out the project itself. Accordingly at 31 March 2012 the property has been reclassified from an investment property to inventories in current assets at the director's valuation of £4m pending an eventual sale.

5. Pension Finance Costs
	2012	2011
	£'000	£'000
Pension scheme net finance charge	101	110
	_____	_____
6. Share of results of associates
	2012	2011
	£'000	£'000
Share of profits	48	57
Associates' net finance costs	(21)	(25)
	_____	_____
	27	32
	_____	_____
7. Inventories	2012	2011
	£'000	£'000
Inventories	4,000	-
	_____	_____

Inventories comprise land for redevelopment which has been transferred in at the director's valuation of £4m and this will be the base cost from 1 April 2012.

8. Taxation

No corporation charge has been provided for 2012 or 2011 as a result of the availability of various reliefs.

9. Earnings per share

The earnings per share has been calculated using the weighted average number of ordinary shares in issue during the relevant financial periods. The weighted average number of shares in issue during the year was 11,807,014 (2011:11,807,013) and the loss after taxation was £625, 000 (2011: profit £2,077,000). There is no difference between the basic and diluted losses per share in either year.

10.  Related party transactions

During the year the sum of £50,000 (2011: £88,000) was paid to Corporate Services Associates Ltd for services in respect of Anthony Cooke and Peter Townsend. Peter Townsend is a director and shareholder of Corporate Services Associates Ltd.

During the year the sum of £5,000 (2011: £nil) was paid to Richmond Corporate Developments Limited for the services in respect of Anthony Cooke.

Included in other financial assets are loan notes of £800,000 (2011: £800,000) due from Trimmings by Design Limited an associated company in which the Company has a 44% interest.  The loan notes are subject to interest at 6.5% amounting to an interest revenue for the period of £52,000 (2011: £52,000) and as at the period end there was £13,000 (2011:  £13,000) of unpaid interest within Trade and other receivables.

11. Statement of Directors' responsibilities

Each of the Directors confirms that to the best of their knowledge:

1.      The financial statements within the full Annual Report and Accounts from which the financial information within this Final Results announcement has been extracted, have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

2.      The management report, which is incorporated into the Directors' Report, includes a fair review of the development and performance of the business and the position of the Company taken as a whole, together with a description of the principal risks and uncertainties

12. Copies of the Annual Report

Copies of the Annual Report will be available from the Company Secretary at the registered office which is situated at 1 The Green, Richmond, Surrey TW9 1PL. The annual report and AGM notices will also be available for download on the Company's website www.worthingtongroupplc.co.uk at the appropriate time.

Enquiries:
Anne Alesbury, PD Cosec Ltd - Company Secretary           Roland Cornish, Beaumont Cornish	Tel: [phone] Tel: [phone]
Website:          www.worthingtongroupplc.co.uk

 

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