Kazera Global Regulatory News (KZG)

29 Jun 2007 07:02

Worthington Nicholls Group plc29 June 2007 Worthington Nicholls Group plc Interim results for the period ended 31 March 2007 Worthington Nicholls Group plc ("Worthington Nicholls", the "Company" or "Group"), one of the UK's leading installers of air conditioning, heating, ventilationand chilled water systems, announces interim results for the period ended 31March 2007. Interim financial and business highlights: • Turnover of £8.8 million • Gross profit of £2.8 million • Loss before interest and tax of £174,000 • Raised £6 million before expenses towards identified acquisitions • Expansion into Europe implemented • Acquired Lumenglow Limited (December 06) Post-interim financial and business highlights: • Approximately £34 million of revenue in total currently invoiced or contracted to year end • Current new business pipeline of £61.3 million • Raised a further £20 million before expenses for working capital requirements and additional acquisitions in May 2007 • Current cash bank balance of approximately £13 million • Acquired Woods Holdings Wilmslow Limited, Euro Property Services (London) Limited and Classic Interiors Contractors Limited in May 2007 • Secured first ever 'F' gas compliance contract with IHG Managed Services, part of the global Intercontinental Hotels Group Peter Worthington, Chairman of Worthington Nicholls, said: "Having secured our first 'F' gas contract recently, we believe this regulationdriven market will be a strong driver for future growth, and we are devotingconsiderable marketing and sales resource to this opportunity. Looking forward, further acquisitions are an important part of our growthstrategy and we are currently reviewing a number of potential targets. I am verypleased with the development of the Group to date and have full confidence ofits continued performance in the future." Enquiries, please contact: Worthington Nicholls 0870 609 1829Mark Worthington, Chief ExecutiveDavid Levis, Corporate Director Gresham PR 020 7404 9000Neil Boom Blue Oar Securities 020 7448 4400Rhod Cruwys / Romil Patel Chairman's statement Worthington Nicholls Group plc has had a productive period in the half-year to31 March 2007. Moreover, since the six-month period under review the Group hasalso completed a further three acquisitions, taking the total number ofcompanies acquired since Worthington Nicholls joined AIM last June to five. Integration of the recent acquisitions is progressing well, and we are of theopinion that they will all prove to be positive additions to the Group. We arealso encouraged by the fact that the two companies we acquired in 2006 areperforming well, and that our operational management and staff have theambition, skills and experience that will enable us to become Europe's leadingindependent installers of air conditioning systems in hotels, shops and offices. Also in the period reviewed there was a successful share placing in December2006 which raised a total of £6 million before expenses for identifiedacquisitions. This was followed by a more recent placing in May 2007 whichraised an additional £20 million before expenses, giving the Group thesignificant cash resources for further acquisitions and continued organicexpansion. Results for the interim period ended March 2007 The financial results for the six months ended 31 March 2007 show that the Groupdelivered revenues of £8.8 million, gross profit of £2.8 million and a lossbefore interest and tax of £174,000. As the Company was only incorporated on 3February 2006 and the Group was only formed on 6 June 2006, there is nocomparative information available for the six months to 31 March 2006. Our investors may be aware that we generally see a split in turnover which isweighted towards the second half of the year. This year, the split has been morepronounced than normal, which is largely due to a number of the large contractsfinishing at roughly the same time, causing a lag before we were able to starton new contracts. Work on these new contracts has now begun. The Board does not believe it is likely that the second half weighting trendwill become more pronounced going forward and that this anomaly is likely to bea one-off caused by the way the contracts have fallen this financial year. The Group has seen a rapidly increasing revenue run rate to date with Q1 revenueof £2.6 million and Q2 revenue of £6.2 million. Post the interim period, theGroup has achieved revenue of approximately £10 million to date in Q3 and sofar, has approximately a further £15 million in revenue already contracted andscheduled to take place within the financial period ending 30 September 2007. Today, we can report that currently we have submitted tenders for approximately£61.3 million worth of additional new business. This represents a decrease of£23.7 million in the new business pipeline figure from that reported in April2007's trading statement, which is a function of the Company's ability toconvert its business pipeline into contracted revenue. Of the £23.7 milliondecrease in the pipeline, £8.42 million of this has been converted intocontracted revenue, representing a conversion rate of 36%. We expect profit margins across the Group to remain stable for the full year asa whole recognising the benefit derived from the increased run rate of revenuein the second half of the financial year. In the interim period to 31 March2007, the Group recorded administrative expenses of approximately £3 million.The increased overheads, relative to revenue, are due to costs associated withinvesting in a new sales team and contracts commencing in the second half of thefinancial year. Given the projected revenue run rate increase from contracted revenue and thenew business pipeline, we are looking forward to a busy end to the year. Our cash position at the end of March 2007 showed we had £0.5 million in thebank. Following a placing in May 2007, raising £19 million (net of expenses),the Group currently has approximately £13 million of cash in the bank. From theproceeds of the placing, £3.5 million has been utilised in completing the 3 mostrecent acquisitions and £2.5 million has been used to repay short-term bankborrowings. It is the intention of the Company to utilise its strong balance sheet and itsfinancial resources to continue to expand the Group through both organic growthand acquisitions. New Contracts Earlier this month we announced the signing of a significant maintenancecontract with IHG Managed Services, part of the global Intercontinental HotelsGroup. This was a key milestone in our development of the Group, not onlybecause of the nine-year length of the contract, but also because it is thefirst major contract that will enable us to help our client comply with the newEuropean Union 'F' gas legislation, which comes into force on 4 July 2007 anddemands the phasing out and replacement of R22 refrigerant gases with moreenvironmentally-friendly alternatives. Worthington Nicholls sees the R22 replacement market as a very significantpotential driver of new growth, the market for which independent analysts valueat over £7 billion in the UK alone. As a group, we have been actively highlighting our services to existing andpotential clients to enable them to comply with this legislation. Naturally, wewere delighted to have secured this first 'F' gas compliance contract with IHGManaged Services. Another strategically significant contract win was the installation of new andreplacement air conditioning systems into the Park Hotel in Amsterdam. ParkHotel is owned by Grand City Hotels & Resorts, which has a hotel estate ofapproximately 3,000 additional bedrooms in Germany. Having won the mandate forthe Park Hotel in Amsterdam, we hope to secure further hotel contracts fromGrand City Hotels & Resorts in Western Europe. During the period under review, the Group has also secured additional contractsfrom Q2 Solutions Pty Limited, De Vere, Hotel du Vin, the Paramount Group, QHotels Group and the Malmaison chain. Dividend Our policy is to pay a full-year dividend only. Accordingly, at this stage inthe Group's development, we do not propose an interim dividend Future Prospects Having secured our first 'F' gas contract recently, we believe this market willbe a strong driver for future growth, and we are devoting considerable marketingand sales resource to this regulation driven market. Looking forward, further acquisitions are an important part of our growthstrategy and we are currently reviewing a number of potential targets. I am verypleased with the development of the Group to date and have full confidence ofits continued performance in the future. Peter WorthingtonGroup Chairman29 June 2007 FINANCIAL RESULTS: CONSOLIDATED PROFIT AND LOSS ACCOUNT Unaudited 6 months ended 31 March 2007 Note £'000s Turnover 8,841Cost of sales (6,039) _______Gross profit 2,802 Administrative expenses (3,024)Other operating income 48 _______Operating (loss)/profit (174) Other interest receivable and similar income 2Interest payable and similar charges (125) _______(Loss)/profit on ordinary activities before (297)taxationTaxation on (loss)/profit on ordinary activities 2 89 _______Retained (loss)/profit (208) _______ Earnings per ordinary share:- Basic 3 (0.29p)- Diluted 3 (0.28p) The Group has no recognised gains or losses other than the results reportedabove. The results above also represent the historic cost profit. CONSOLIDATED BALANCE SHEET Unaudited 31 March 2007 £'000sFixed assetsIntangible assets 29,051Tangible assets 1,914 _______ 30,965 _______Current assetsStock and work in progress 944Debtors and prepayments 12,792Cash at bank and in hand 485 _______ 14,221Creditors: amounts falling due within one year (4,964) _______Net current assets 9,257 _______ 40,222 Total assets less current liabilitiesCreditors: amounts falling due after more than one year (1,458) _______Net assets 38,764 _______Capital and reservesCalled up share capital 735Share premium account 36,772Merger reserve 663Profit and loss account 594 _______Equity shareholders' funds 38,764 _______ RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS Unaudited 31 March 2007 £'000s Retained (loss)/profit for the period (208)Equity dividend paid (294)FRS20 - Share based payments 109New share capital subscribed (net of expenses) 6,042Transfer to merger reserve 75 _______Net movement in equity shareholders' funds 5,724Opening equity shareholders' funds 33,040 _______Closing equity shareholders' funds 38,764 _______ CONSOLIDATED CASH FLOW STATEMENT Unaudited 31 March 2007 £'000s Net cash outflow from operating activities (4,052) Returns on investments and servicing of financeInterest received 2Interest paid (91)Interest element of hire purchase contracts (34) _______ (123) _______Taxation (328) _______Capital expenditure and financial investmentPurchase of tangible fixed assets (252) _______ (252) _______AcquisitionsCash consideration (net of cash balances acquired) (182) _______DividendsEquity dividend paid (294) _______Net cash outflow before management of liquid (5,231)resources and financing _______FinancingRepayment of loans and borrowings (18)Proceeds from issue of equity shares (net of 6,042expenses)Capital element of hire purchase repayments 46 _______ 6,070 _______Increase in cash in the period 839 _______ ANALYSIS OF NET DEBT Unaudited 30 September Cash flow Acquisitions/ 31 March 2006 Transfers 2007 £'000s £'000s £'000s £'000s Cash at bank and in 519 (44) 10 485handOverdraft (967) 935 (62) (94) (448) 891 (52) 391Debt due within oneyear (19) 18 (130) (131)Debt due after oneyear (1,077) - 30 (1,047)Loan notes (325) - - (325)Obligations under hirepurchase contracts (104) (46) (19) (169) Net debt (1,973) 863 (171) (1,281) NOTES TO THE INTERIM FINANCIAL RESULTS 1 Basis of preparation The Group's Interim Results consolidate the results of the Company and itssubsidiary companies made up to 31 March 2007. The information set out does not constitute statutory accounts within themeaning of Section 240 of the Companies Act 1985. The interim financial information has been prepared on the basis of accountingpolicies set out in the statutory accounts for the period ended 30 September2006, with the exception of accounting for share based payments. This followsthe adoption of Financial Reporting Standard 20 (FRS 20 - Share-based Payments)for the year ending 30 September 2007. In accordance with the standard, the costof share options awarded to employees measured by reference to their fair valueat the date of grant is recognised over the vesting period of the options basedon the number of options which, in the opinion of the Directors, will ultimatelyvest. The cost of the share options is charged to the profit and loss accountand transferred within reserves. No adjustment is required to comparative figures for the period ended 30September 2006. 2 Taxation The charge for taxation on the loss for the 6 months ended 31 March 2007 isbased on an effective rate of 30% which has been calculated by reference to theprojected charge for the full year. 3 Earnings per ordinary share Basic earnings per ordinary share represents the loss for the period of £208,000divided by the weighted average number of ordinary shares in issue of70,744,110. The diluted earnings per ordinary share is based on 73,646,717 ordinary shares,the difference to the basic calculation representing the additional shares thatwould be issued on the conversion of all the dilutive potential ordinary shares.There is no material difference to earnings if all the dilutive potentialordinary shares are converted. 4 Comparative period The Company's comparative interim period to 31 March 2006 showed a profit andloss of nil, as, at the date of such reporting the Group had not yet beenformed. As such, no comparative information has been disclosed. 5 Accounts and interim announcement Copies of the Interim Report will be sent to all shareholders in due course.Additional copies will be available from Worthington Nicholls Group Plc, GroundFloor, Barons Court, Manchester Road, Wilmslow, Cheshire SK9 1BQ. This information is provided by RNS The company news service from the London Stock Exchange