Last checked at 23 Jun 2008 12:54
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: 01625 549082 |