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30 Mar 2010 10:09
30 March 2010 Garner plc ("Garner" or the "Company") Trading Update
A board meeting was held today at which the directors of the Company carefully considered the financial position and prospects of BNB Recruitment Consultancy Limited ("BNBRC"), a 100 per cent owned subsidiary of the Company and one of the three companies acquired from BNB Recruitment Solutions plc in December 2008. BNBRC has net current liabilities of approximately £1.6m including £ 879,000 owed to HMRC and £742,000 owed to other Garner group companies. It was agreed that there is no realistic prospect of BNBRC paying these debts and accordingly there is no alternative but to take the necessary steps to place the subsidiary into creditors' voluntary liquidation.
Ernst & Young LLP have been instructed to assist the board of directors with the liquidation process. The employees of BNBRC were recently transferred to another subsidiary of the Company as part of the plan to consolidate the operations of the Garner group of companies. As a result, the liquidation of BNBRC will not impact the trading operations of the Garner group of companies.
Trading within BNBRC in 2009 was worse than anticipated, with the downturn in the economy together with the costs of terminating contracts and restructuring the business resulting in this subsidiary suffering heavy losses. However, the Garner group of companies has made a promising start to 2010 and unaudited consolidated management accounts show that the Company traded profitably at the pre-tax level in the first quarter of the year.
The Company has also been in discussions with the administrators to BNB Recruitment Solutions plc (in administration), to renegotiate the original terms of the acquisition. The Board is pleased to announce that an agreement in principal has been reached to reduce the total consideration payable, subject to the Company securing the necessary funding.
A further announcement will be made in due course.
ENQUIRIES:Garner plc Tel: 020 7629 8822 Andrew Garner/Ben Felton Merchant John East Securities Limited Tel: 020 7628 2200
John East/Simon Clements
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