Worthington Grp Regulatory News (WRN)

8 Nov 2007 10:34

Worthington Group PLC08 November 2007 WORTHINGTON GROUP PLC Interim Report for the half year ended 30 September 2007 CHAIRMAN'S STATEMENT On our reduced operations the Group earned a profit of £20,000 as after all headoffice expenses, compared to a loss of £27,000 for the same period last year. Several strategy changes have been considered during the period to betterutilise our cash reserves but because of our asset value any proposed changeswould probably require a Class 1 circular to shareholders and possibly PensionRegulator approval, incurring significant costs for the Group. However thematter is receiving ongoing attention. Our former business Worthington Manufacturing which was sold to Jessop and Baird(Hong Kong) Ltd entered Administration in September following the refusal of theHong Kong partners to inject additional working capital into the business. Wehad already taken the precaution of providing for the remaining monies owed bythe business in the March 2007 accounts. According to the Statement of Affairsprovided to the Administrator there may be the possibility of some monies beingreturned, the quantum of which is not yet known. Our 44% shareholding in Trimmings by Design which is based in Derby is stilltrading profitably. The outstanding sale monies in respect of the Eccleshill site will now be paidon 1st December following our agreement to extend the repayment date. Wecontinue to charge interest at a penalty rate until then. We have now recently been advised by the Trustees of the results of the fullactuarial review of the Jerome Group Retirement Benefits Scheme as at 5 April2007. This review is undertaken every 3 years and current pension's legislationrequires an assessment of the deficit made based on a new Statutory FundingObjective basis. I am pleased to say that the assumptions used by the Trustees to estimate thedeficit on this basis has produced a result similar to that produced in the 2007Annual report on an IAS 19 basis. We are now required to reach agreement withthe Trustees on a new contribution plan going forward to eliminate the deficitwhich will require Pension Regulator approval. We continue to make contributionscurrently at the rate of £264,000 per annum to the deficit pending theestablishment of a new plan which will be required to be filed with the PensionsRegulator by June 2008. We will continue to negotiate with the Trustees of the Scheme to keep as muchcash within the Group for investment into any suitable new business proposalsthat we may receive. Shareholders must be mindful of the fact that the Trusteesand Pension Regulator will be looking to require the Group to pay off thedeficit over as short a timescale as the Group can afford. We are looking intoways we can deal with the deficit and the Scheme in general and are seekingprofessional pension's advice following the Actuarial review. The pension scheme funding risk continues to represent the principle risk factorfaced by the Group. The investment performance of the scheme assets togetherwith the levels of head office costs and the rental income are monitored closelyby the Board as key performance indicators. Both rental income and head officecosts are in line with our expectations. Over a difficult 6 month period forstock markets the scheme funds achieved a marginally positive return largely inline with benchmark performance. Once the new contribution plan is establishedfor the next three years the Trustees will review the investment managers'performance and make changes if necessary. The Board continues to pursue suitable investment opportunities which mightenhance shareholder value moving forward. During the period we received anindicative offer of £2m for our Keighley property, which we have declined, butthe valuation suggests that we could mortgage the site for around £1.5m to raisecash, if a suitable acquisition is forthcoming. J C Dwek CBEChairman8 November 2007 This interim report may contain forward-looking statements based on currentexpectations of, and assumptions and forecasts made by management. Various knownand unknown risks, uncertainties and other factors could lead to substantialdifferences between the actual future results and, financial situationdevelopment or performance of the Group and the estimates and historical resultsgiven herein. Undue reliance should not be placed on forward looking statementswhich speak only as at the date of this document. We undertake no obligationpublicly to update or revise any forward-looking statements, except as may berequired by law. Worthington Group plc Consolidated Income Statement for the six months ended 30 September 2007 Unaudited Unaudited Audited 6 months ended 6 months ended Year ended 30 September 30 September 31 March 2007 2006 2007 £'000 £'000 £'000Revenue:Continuing operations 77 91 313 Operating (Loss) / profit (52) (168) 36Finance Costs - 12 (48) Finance Income 67 - 107Share of post tax profits/(losses) of associated undertakings 5 129 50Loss on disposal of interest in associates - - (476) Profit/ (loss) before taxation 20 (27) (331) Taxation - - - Profit/ (loss) on ordinary activities after taxation 20 (27) (331) Dividends paid and proposed - - - Retained profit/ (loss) 20 (27) (331) Earnings /(loss) per share 0.2p (0.2p) (2.8p) Recognised gains and losses There are no recognised gains or losses in the half year ended 30 September2007, other than those shown in the above income statement. Worthington Group plc Consolidated Balance Sheetat 30 September 2007 Unaudited Unaudited Audited 30 September 30 September 31 March 2007 2006 2007 £'000 £'000 £'000Non-current assets Property, plant and equipment 1,800 1,866 1,800Interests in associated undertakings 729 775 724 2,529 2,641 2,524Current assets Current asset investments - 1,000 -Trade and other receivables due within 1 year 321 433 321Trade and other receivables due after more than 1 year 800 800 800Cash at bank and in hand 780 117 882 1,901 2,350 2,003 Total assets 4,430 4,991 4,527 Current liabilitiesTrade and other payables 153 207 138Non-current liabilitiesRetirement benefit obligation 1,671 1,826 1,803 Total liabilities 1,824 2,033 1,941 Net assets 2,606 2,958 2,586 Equity Called up share capital 11,807 11,807 11,807Share premium account 9,836 9,836 9,836Capital reserve 128 128 128Revaluation reserve - 624 -Profit and loss account (19,165) (19,437) (19,185) Total Equity 2,606 2,958 2,586 Worthington Group plc Consolidated Cash Flow Statementfor the six months ended 30 September 2007 Unaudited Unaudited Audited 6 months ended 6 months ended Year ended 30 September 30 September 31 March 2007 2006 2007 £'000 £'000 £'000 Reconciliation of (loss)/profit for the period to netcash flow from operating activitiesOperating (loss)/profit for the period (52) (168) 36Depreciation/impairment and goodwill amortisation - 5 (42)Profit on disposal of investment property and plant - - (50)Movement in trade and other receivables 15 34 59Movements in trade and other payables - (285) (67)Pension deficit payments (132) (125) (257)Net cash outflow from operating activities (169) (539) (321) Cash Flow from financing activitiesInterest paid - (23) (21)Proceeds from short term loans - - -Repayments of borrowings - (1,500) (1,788)Net cash used in financing activities - (1,523) (1,809) Cash Flow from investing activitiesInterest received 67 34 67Proceeds from sale of investments - 2,750 3,550Loans to associated undertakings - (75) (75)Net cash inflow from investing activities 67 2,709 3,542 _____ ______ _____Increase/(decrease) in cash and cash equivalents (102) 647 1,412 Reconciliation of movement in shareholders' funds (Loss)/profit for the period 20 (27) ( 331) Net increase/(reduction) in shareholders' funds 20 (27) (331) Movement in reserves - - (68) Opening shareholders' funds 2,586 2,985 2,985 Closing shareholders' funds 2,606 2,958 2,586 Worthington Group plc Notes to the Interim Statements for the six months ending 30th September 2007 1. Basis of Accounting The interim accounts have been prepared in compliance with IAS 34 'InterimFinancial Reporting' and on the basis of accounting policies set out in theGroup's financial statements for the year ended 31 March 2007. The interimaccounts were approved by the Board on 8 November 2007 and are unaudited. Comparative figures for the half year ended 30 September 2006 are extracts fromthe interim accounts for that period and are also unaudited. Comparative figures for the year ended 31 March 2007 have been extracted fromthe financial statements, which have been filed with the Registrar of Companies.The information for the year ended 31 March 2007 does not constitute statutoryaccounts as defined in section 240 of the Companies Act 1985. These were auditedand reported upon without qualification by the auditors and did not contain anystatement under section 237(2) or (3) of the Companies Act 1985. 2. Segmental Analysis The following is an analysis of the revenue and results for the period, analysedby business segment, the Group's primary basis of segmentation. Revenue Revenue Result Result 6 months ended 6 months 6 months ended 6 months ended ended 30/09/07 30/09/06 30/09/07 30/09/06 2007 2006 2007 2006 £'000 £'000 £'000 £'000 Continuing Operations Property 77 91 (52) (168) 3.Earnings/Loss per share Earnings per share is calculated by reference to the average number of shares inissue in the period amounting to 11,807,013 shares (six months to 30 September2006: 11,807,013 shares) and on a profit after taxation of £20,000 (six monthsto 30 September 2006: loss of £27,000). The taxation charge is calculated by applying the directors' best estimate ofthe annual tax rate to the loss or profit for the period. There is no difference between basic and diluted loss per share. 4. Directors' Statement of Responsibilities The Directors' confirm to the best of their knowledge: • The condensed set of financial statement has been prepared in accordancewith IAS 34 Interim Financial Reporting as adopted by the EU; • The interim management report includes a fair review of the informationrequired by DTR 4.2.7R being an indication of important events that haveoccurred during the first 26 weeks of the financial year and their impact on thecondensed set of financial statements and a description of the principal risksand uncertainties for the remaining 26 weeks of the year; and • The interim management report includes a fair review of the informationrequired by DTR 4.2.8R being disclosure of related party transactions andchanges therein since the last annual report. By order of the Board - Joe C Dwek , Chairman 8 November 2007 5. Independent Review Report to Worthington Group plc Introduction We have reviewed the accompanying balance sheet of Worthington Group plc and therelated statements of income, changes in equity and cash flows for the 26 weeksended 30 September 2007, and a summary of significant accounting policies andother explanatory notes. Management is responsible for the preparation and fairpresentation of this interim financial information in accordance withInternational Financial Reporting Standards. Our responsibility is to express aconclusion on this interim financial information based on our review. Scope of Review We conducted our review in accordance with International Standard on ReviewEngagements 2410, "Review of Interim Financial Information Performed by theIndependent Auditor of the Entity." A review of interim financial informationconsists of making inquiries, primarily of persons responsible for financial andaccounting matters, and applying analytical and other review procedures. Areview is substantially less in scope than an audit conducted in accordance withInternational Standards on Auditing and consequently does not enable us toobtain assurance that we would become aware of all significant matters thatmight be identified in an audit. Accordingly, we do not express an auditopinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the accompanying interim financial information does not give a true andfair view the financial position of the entity as at 30 September 2007, and ofits financial performance and its cash flows for the 26 week period then endedin accordance with International Financial Reporting Standards as applicable inthe United Kingdom. UHY Hacker Young 8 November 2007Chartered AccountantsManchester 6. Availability of Interim Report A copy of this report is available on the Group's website atwww.worthingtongroupplc.co.uk and are being sent to shareholders. Copies arealso available from The Secretary, Worthington Group plc, Suite 1, CourthillHouse, 66 Water Lane, Wilmslow, Cheshire SK9 5AP. This information is provided by RNS The company news service from the London Stock Exchange