Worthington Grp Regulatory News (WRN)

18 Jun 2009 16:40



Worthington Group plc ("the Company")

Results for the Year Ended 31 March 2009

Head office rent receipts net of property and other costs produced a surplus of £10,000 for the year (2008: £23,000) before adjusting for non cash items - which are discussed in detail below. After allowing for non cash charges the Company produced a loss for the period of £487,000 (2008: profit of £49,000). 

Net asset value has decreased by £2,266,000 in the year to £1,087,000 (2008: £3,353,000), mainly as a result of a fall in the value of the pension scheme assets following a turbulent year in the markets, which adversely affected the values of most classes of asset. 

Trimmings by Design ("Trimmings"), in which we have a 44% shareholding, had a difficult year, as did many similar companies, as a result of reduced demand from its retail customers. We received a cash dividend from them of £66,000 in the year (2008: £44,000). However, Trimmings produced a loss for the year, with our share of the trading losses included in these accounts amounting to £56,000 (2008: Profit £66,000). Given the loss incurred and a forecasted loss for the coming year we have made an impairment provision of £145,000 against the goodwill on our balance sheet together with additional provisions of £109,000 against the value of goodwill sitting on the balance sheet of Trimmings itself. 

Turning to the pension scheme the income and expenditure account, in accordance with IAS 19, includes a non cash charge of £166,000 (2008: £39,000) in respect of the pension scheme net finance cost. Payments into the scheme to reduce the deficit during the period amounted to £223,000 (2008: £ 264,000) but despite this the scheme deficit on an IAS 19 basis increased to £2,641,000 (2008: £918,000).  Whilst the scheme liabilities reduced slightly the value of the scheme assets fell considerably as a result of the market turbulence, resulting in the large increase in the deficit.

The pension scheme funding risk continues to represent the principal risk factor faced by the Company. The investment performance of the scheme assets against benchmarks, together with the levels of head office costs and the rental income continue to be monitored closely by the Board as key performance indicators.

We continue to investigate various planning schemes to realise the maximum value out of the Keighley site but we will have to be patient whilst we wait for the property market to improve. Meanwhile the property is almost fully let to established tenants. Both rental income and head office costs were in line with our expectations. 

Since the year end we have received a settlement offer in respect of the legal claim made by us relating to the incorrect registering of a legal charge over the assets sold to the joint venture, Worthington Manufacturing. Following negotiation we have now agreed to settle the matter for a modest sum after costs. The financial statements for the year include a credit of £40,000 in this respect.

Finally, in the last few weeks, we have agreed and completed the lending on a closed bridging loan of £600,000 at attractive interest rates, secured via a first charge over the property. The professional valuation of the property is substantially in excess of the loan advanced.

We continue to look for acquisition opportunities whilst we look at various schemes to develop the Keighley property and will continue to utilise the cash reserves to generate the best returns we can whilst not exposing them to undue risk. 

J C Dwek CBE

Chairman

18 June 2009

Worthington Group plc

Income Statement

for the year ended 31 March 2009

			Note		2009  £'000		2008  £'000
Revenue			2		142		146
Cost of sales					(83)		(43)
					_______		_______
Gross profit					59		103
Administrative expenses					(149)		(204)
					_______		_______
Operating loss					(90)		(101)
Investment revenues			3		79		123
Finance costs			4		(166)		(39)
Share of results of associate					(56)		66
Provision for impairment losses			5		(254)		-
(Loss)/profit before taxation					(487)		49
Taxation			6		-		-
(Loss)/profit after taxation for current year					(487)		49
(Loss)/earnings per ordinary  share from continuing operations
- Basic			7		(4.1p)		0.4p
- Fully diluted			7		(4.1p)		0.4p

All items are derived from continuing operations.

Worthington Group plc

Statement of Recognised Income and Expense

		2009		2008
		£'000		£'000
Actuarial (loss)/ gain on retirement benefit obligation		(1,779)		660
Prior period adjustment		-		383
Net (expense)/income recognised directly in equity		(1,779)		1,043
(Loss)/profit for the financial year		(487)		49
Total recognised income and expense for the period		(2,266)		1,092

Worthington Group plc

Balance Sheet

At 31 March 2009

	2009			2008
	£'000	£'000		£'000	£'000
Non-current assets
Investment property	1,800			1,800
Interests in associate	429			805
Other financial assets	800			800
		3,029			3,405
Current assets
Trade and other receivables	85			32
Cash and cash equivalents	796			1,000
		881			1,032
Total assets		3,910			4,437
Current liabilities
Trade and other payables	182			166
	182			166
Non-current liabilities
Retirement benefit obligation	2,641			918
	2,641			918
Total liabilities		(2,823)			(1,084)
Net assets		1,087			3,353
Equity
Called up share capital		11,807			11,807
Share premium account		9,836			9,836
Retained earnings		(20,556)			(18,290)
Total Equity		1,087			3,353

Worthington Group plc 

Cashflow Statement

for the year ended 31 March 2009

	2009			2008
		£'000			£'000
Cash flow from operating activities
Operating loss		(90)			(101)
Movement in trade and other receivables		(40)			289
Movement in trade and other payables excluding pension obligation		17			27
Payments to pension scheme		(223)			(264)
Net cash outflow from operating activities		(336)			(49)
Cashflow from investing activities
Interest received		66			123
Dividends received from associated undertakings		66			44
Net cash generated by investing activities		132			167
(Decrease)/increase in cash and cash equivalents		(204)			118
Cash and cash equivalents at beginning of year		1,000			882
Cash and cash equivalents at end of year		796			1,000

Worthington Group plc

Notes forming part of the preliminary announcement for the year ended 31 March 2009

1. Basis of preparation

The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS). The financial statements have also been prepared with IFRSs as adopted by the European Union and therefore comply with Article 4 of the EU IAS regulation.

The financial information in this announcement, which was approved by the Board of Directors on 18 June 2009, does not constitute the Company's statutory accounts for the years ended 31 March 2009 or 2008, but is derived from these accounts.

Statutory accounts to 31 March 2008 have been delivered to the Registrar of Companies and those for 2009 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, except for the revaluation of certain properties and 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

	2009	2008
	£'000	£'000
Loan note interest	52	52
Interest on bank deposits	27	71
	79	123

4. Finance Costs 

	2009	2008
	£'000	£'000
Pension scheme net finance charge	166	39
	166	39

5. Impairment losses recognised 

	2009	2008
	£'000	£'000
Goodwill written off	145	-
Provision against goodwill in balance sheet of associate	109	-
	254	-

Following losses made in the current year by Trimmings by Design Limited and a budgeted loss for the 2009/10 year the Directors consider there has been an impairment of goodwill recognised in the Company's balance sheet. Accordingly full provision has been made against the carrying value of goodwill of £145,000 in respect of its associate with a corresponding charge to the income statement.

In addition the Directors have reviewed the net assets of Trimmings by Design and have made provision for the goodwill on its balance sheet. A further charge of £109,000 has therefore been recognised to reflect this. 

6. Taxation

No corporation charge has been provided for 2009 or 2008 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 (2008: 11,807,013) and the loss after taxation was £487,000 (2008: profit of £49,000). 

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
David Shalom , Finance Director	Tel: 07912 777470

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