Kazera Global Regulatory News (KZG)

9 Nov 2007 07:01

Worthington Nicholls Group plc09 November 2007 Worthington Nicholls Group Plc ("Worthington Nicholls" or the "Company") NOTICE OF GENERAL MEETING On 24 October 2007, the Board announced that it had received a notice from theRequisitioning Group requisitioning a general meeting to consider resolutionsfor: • the removal from office as directors of the Company of Alastair Stoddart, Christopher Neilson, David Levis and Stephen Mulligan; and • the appointment as directors of the Company of Simon Delaval Beart, Ian Rodney Mann and Thomas William Good. The purpose of this announcement is to: 1. provide details of the General Meeting to consider the Resolutions;2. provide Shareholders with an overview of the processes undertaken and the measures implemented by the Board since its interim results announcement made on 29 June 2007;3. inform Shareholders of the considerable progress made by the Board in identifying a Chief Executive and a permanent Finance Director for the Company; and4. provide a recommendation and practical advice to Shareholders as to how to vote on the Resolutions. General Meeting On 8 November 2007 the Company posted a circular to Shareholders to consider theresolutions as briefly described above. The General Meeting will be held at 10:00am on 6 December 2007 at Halliwells LLP, St. James Court, Brown Street,Manchester M2 2JF. Action taken by the Board Following the adverse reaction of the market to the Company's announcement ofits interim results in June 2007 the Board has been working strenuously tostabilise the business, to identify the strengths and weaknesses within thebusiness and to provide solutions to the issues identified during this process.The action taken to date can be summarised under the following headings: Strategic and Operational Review In September 2007 the Board initiated a strategic and operational review, whichis an ongoing exercise. The Group's strategy has been to grow organicallywithin a favourable regulatory and market framework both in the UK and Europeand by selective acquisitions of businesses operating in markets related to airconditioning services. The Group has made good progress with its strategy by acquiring five businesses,which, in the Board's opinion, have strengthened the capability of the Group.At the same time, regrettably, the Group's trading performance has beenadversely impacted by: • contract delays;• poor operational execution; and• the unseasonal weather conditions this summer. The Board has concluded to undertake the following: • cease acquisition activity until the newly acquired companies are fully integrated into the Group;• stabilise trading performance; and• strengthen the Board. In addition, we have identified four specific areas where the introduction ofbest practice to common functions across the Group could, in the near term, makeour controls more robust and save costs as follows: • improving management of contracts;• reviewing under performing businesses;• resource utilisation; and• integration of acquisitions and centralisation of core skills. Throughout the review, management has been working to secure orders andcontracts from its continuing customer relationships. The Board also continuesto believe in the strength of the business opportunities available to the Group. Financial Review The audit committee commissioned KPMG to undertake a review of certain of theGroup's accounting practices and as a result we advised Shareholders in Octoberthat net assets should be written down by £6.5 million. The majority of thisamount relates to accounting calculations that had the effect of advancing therecognition of income. These accounting practices have now ceased, which shouldprovide management and Shareholders with greater clarity as regards thefinancial performance of the Company in the future. Further details of these matters will be contained within the Company's auditedaccounts for the year ended 30 September 2007. Strengthening the Board On 3 July 2007, I was appointed Chairman of the Company, with Peter Worthington,the founder of the Company retiring from the Board. Having recognised the need to strengthen the Board, on 19 September 2007, ChrisNeilson joined the Board as interim Finance Director in order to providestability to the Company. The Board also tasked Chris with the implementation ofthe financial review by KPMG and to oversee that process. Since then, the Board has been working to identify a new Chief Executive with aremit to implement change, strengthen trading performance and restorecredibility with stakeholders, in particular institutional investors. MarkWorthington stepped down as Chief Executive and from the Board on 15 October2007 to facilitate this process. Identifying a new Chief Executive On 29 October 2007, the Board announced it was in a process of identifying asuitable Chief Executive and permanent Finance Director for the Company. TheBoard announced that it was following a two stage process in finding a suitableChief Executive and permanent Finance Director for the Company; the first is toestablish each individual's suitability and availability for the role, thesecond is to provide the most suitable candidates with further information onthe Company in order for them to formulate a strategy for the Company. This process produced a shortlist of three candidates for the Chief Executiverole, each of whom the Board considered had skills and the support of a team toimplement a strategy to manage the Company out of its current situation and torecover shareholder value. Following further discussions with all candidates, the Board has concluded thatSimon Beart, together with William Good and Rodney Mann, present the mostcompelling alternative for the Company. Biographies of Mr Beart, Mr Good and MrMann are set out below: Simon Delaval Beart ACA Simon Beart qualified as a Chartered Accountant with PricewaterhouseCoopers in1984. In 1992, he co-founded the international packaging group Britton Groupplc, which was listed on the Official List and was subsequently acquired by alisted US corporation in 1998 for £250 million. He was appointed deputy chairman and group finance director of XKO Group plc in1999 and chief executive officer in late 2000. XKO Group plc was a software andmaintenance service business. Following the downturn in the software sector in2000, Simon successfully turned round and rebuilt XKO Group plc, and followingthe sale of most of its software and maintenance service assets, developed itinto a focused utilities services business (subsequently renamed RevenueAssurance Services plc). The enlarged group was sold to Spice plc for £110m inOctober 2007. Simon is also a director of The Throgmorton Trust, an investment trust listed onthe Official List which specialises in small and mid cap growth companies. Thomas William Good ACMA William Good qualified as a management accountant in 1991. From 1996 to 2000he was group financial accountant of Card Clear plc. In 2000, he became groupfinance director of Retail Decisions plc, a fully listed software and servicesgroup, following its demerger from Card Clear plc. He was appointed group finance director of XKO Group plc (subsequently renamedRevenue Assurance Services plc) in early 2004 and worked with the chiefexecutive officer, Simon Beart, to rebuild and refocus the group. The group wassuccessfully sold in October 2007 to Spice plc for £110m. Ian Rodney Mann Rodney Mann worked at Grand Metropolitan between 1965 and 1995 where he heldpositions as managing director of the Norwich Brewery (1982 to 1985), the UshersBrewery (1985 to 1989) and Inntrepreneur and Tenanted Estates (1991 to 1993).Between 1995 and 1998, he was a non-executive director of Shepard Neame Limitedand he was non-executive chairman of Avebury Group plc. Mr Mann joined XKO Group plc as a director in 1999 and became non executivechairman in 2005. The Board is extremely conscious that the recent stock exchange announcementsand the requisitioning of the General Meeting have created concern anduncertainty for its stakeholders. Therefore, in the long-term interests of theGroup, the Board is in discussions with Mr Beart and his team to effect anorderly hand over of the management of the Company, whereupon Mr Beart, Mr Goodand Mr Mann will be appointed, respectively, to the positions of ChiefExecutive, Finance Director and Deputy Chairman of the Company. This processhas now commenced and all parties are working towards Mr Beart, Mr Good and MrMann being appointed to their roles ahead of the General Meeting. At that time,I would revert to my former role as Non Executive Chairman of the Company toensure continuity during the early stages of the new team's tenure. Upon the appointment of Messrs Beart, Good and Mann as directors of the Company,Stephen Mulligan, David Levis and Christopher Neilson will resign as directorsof the Company with immediate effect. Conclusion The Board expects the orderly hand over of the management of the Company to MrBeart and his team referred to above to be completed ahead of the GeneralMeeting. In these circumstances and as stated above, Mr Beart and his teamwould be appointed as directors, and Messrs, Levis, Mulligan and Neilson wouldresign. Alastair Stoddart would remain on the Board as Non Executive Chairman. In order to satisfy the provisions of the Companies Act 2006, the GeneralMeeting will take place despite the Board's intention to appoint Mr Beart andhis team to the Board. In light of this, the Board draws particular attentionto the recommendation section set out below and urges Shareholders to vote inaccordance with its recommendations. Recommendation Following a thorough review of the business and the options available to theCompany, the Board believes that the long-term drivers of the Group's business,including global climatic change, the resultant legislative changes and thedemand for air conditioned environments from consumers, remain intact. TheDirectors believe that these factors continue to provide an exciting andexpanding opportunity. In Messrs Beart, Good and Mann the Board believes it hasthe team capable of bringing stability to the business and, thereafter, ofbuilding a business capable of taking advantage of these opportunities andrebuilding Shareholder value. Accordingly, your Board unanimously recommends that you: 1. vote in favour of resolutions 6, 7 and 8 to appoint Simon Beart,William Good and Rodney Mann as directors of the Company as they have undertakento do in respect of their own beneficial shareholdings and interests of theirfamilies, amounting to, in aggregate, 2,146,071 Ordinary Shares, representing2.38 per cent. of the Ordinary Shares; 2. vote against resolution 1 to remove Alastair Stoddart from the officeof director of the Company as they have undertaken to do in respect of their ownbeneficial shareholdings and interests of their families, amounting to, inaggregate, 2,146,071 Ordinary Shares, representing 2.38 per cent. of theOrdinary Shares. In the event that, as expected, Simon Beart, Rodney Mann and William Good areappointed as directors prior to the General Meeting, the Board would not intendto put Resolutions 6, 7 and 8 to the meeting. The Board also expects that priorto the General Meeting, Messrs Levis, Mulligan and Neilson will resign asdirectors of the Company. In the event that such resignations have taken placeprior to the General Meeting, the resolutions relating to their removal will notbe put to the General Meeting. To the extent that the Resolutions are put to the meeting, the Board haveundertaken to vote in accordance with their recommendations above in respect oftheir own beneficial shareholdings, amounting to, in aggregate, 2,146,071Ordinary Shares, representing 2.38 per cent. of the Ordinary Shares. The Board confirms that Mark Worthington has undertaken to vote in accordancewith the Board's recommendations in respect of his 7,445,500 Ordinary Shares,representing 8.25 per cent. of the voting rights of the Company. Simon Beart, the proposed Chief Executive, said: "The new team is very pleased to have reached agreement with the Board and welook forward to re-building shareholder value as soon as possible. WorthingtonNicholls is in a very attractive industry and we remain convinced that with theright processes and controls, there is a great opportunity for shareholders". Alastair Stoddart, Chairman, added: "I am delighted that we have been able to resolve the process of identifying asuitable Chief Executive and permanent Finance Director for the Company and thatwe have found such strong candidates. As a team we will now be able to moveforward together and in the best interests of all our stakeholders." Enquiries, please contact: Worthington Nicholls Group 0870 609 1829Alastair Stoddart, ChairmanChris Neilson, Finance Director Smithfield Consultants 020 7360 4900Reg Hoare / Will Henderson Blue Oar Securities 020 7448 4400Rhod Cruwys / Romil Patel DEFINITIONS "Circular" the document dated 8 November 2007, addressed to the Shareholders "Company" or "Worthington Nicholls" Worthington Nicholls Group plc (registered in England and Wales under company number 5697574) "Directors" or "Board" the directors of the Company at the date of this announcement "Ordinary Shares" the 90,203,976 Ordinary Shares in issue on the date of this document "General Meeting" the general meeting of the Company convened for 10:00am on 6 December 2007, (notice of which was sent to Shareholders on 8 November 2007) and any adjournment thereof "Group" the Company and its subsidiary undertakings at the date of this announcement "Ordinary Shares" the ordinary shares of 1 pence each in the capital of the Company "Resolutions" the resolutions set out in the notice of General Meeting as sent to Shareholders 8 November 2007 "Requisitioning Group" certain shareholders, whom on 24 October 2007, requisitioned a general meeting of the Company to consider the Resolutions "Shareholders" holders of Ordinary Shares "UK" the United Kingdom of Great Britain and Northern Ireland This information is provided by RNS The company news service from the London Stock Exchange