Final Results

Worthington Nicholls Group plc 17 January 2007 RNS Release 17 January 2007 Worthington Nicholls Group plc Preliminary Results for the year ended 30 September 2006 and Pipeline 2007 Worthington Nicholls Group plc ('Worthington Nicholls' or 'Group'), one of the UK's leading installers of air conditioning, heating, ventilation and chilled water systems, announces preliminary results for the period ended 30 September 2006. Financial and business highlights •Pro forma annualised turnover of £25 million •Pro forma annualised operating profit of £3.67 million •Dividend of 0.4 pence per ordinary share to be paid on 30 March 2007 •Admitted to AIM in June 2006, raising £7.5 million of new capital and £ 12.5 million of replacement capital from institutional and other investors •In December 2006, completed a further placing raising £6 million of new capital towards identified acquisitions •Acquired Project Air Limited and Lumenglow Limited •Pipeline of new business for 2007 currently at £28.5 million with live tenders for £67 million worth of additional business Peter Worthington, Chairman of Worthington Nicholls, said: 'With the monies raised in the share placings, we now have in place the financial resources to make further acquisitions. Indeed, we are currently looking closely at a number of identified targets. Our focus is on companies operating in our main hotel market sector but we will also look to reduce shareholder risk through diversification into additional sectors, as we demonstrated with the acquisition of Project Air Limited, which strengthened our penetration in the retail sector. 'Working in Europe is also likely to be increasingly strategically important to the Group as we expand. Having already secured our first European contract we will look to take advantage of further opportunities as they arise. We look forward to 2007 with confidence and great excitement, and believe it will be a year in which we make further strong progress.' Enquiries, please contact: Worthington Nicholls 0870 609 1829 Mark Worthington, Chief Executive David Levis, Corporate Director Gresham PR Ltd 020 7404 9000 Neil Boom / Laura Black Corporate Synergy 020 7448 4400 Rhod Cruwys / Romil Patel Chairman's statement We are delighted to present our first set of financial results since our shares were admitted to AIM. Worthington Nicholls has enjoyed a highly successful year in which the Group has continued to make considerable progress. On a personal note, I would like to take this opportunity to welcome on board our new shareholders, and of course, to thank all our staff for their continued hard work and dedication. Results for the year ended 30 September 2006 Worthington Nicholls Group plc was incorporated on 3 February 2006 and commenced trading on 6 June 2006, following its admission to trading on AIM. As required by the Companies Act legislation, the Group has prepared consolidated financial information for the period from incorporation to 30 September 2006. These statutory numbers are set out at the end of this announcement. Trading for this period generated turnover of £8 million million and earnings before interest and tax of £1.4 million. The board of directors of the Group ('the Board') considers, however, that the statutory numbers do not provide shareholders with the most meaningful financial information to enable them to assess properly the performance of the Group. The Board has, therefore, prepared unaudited pro forma financial information for the 12 months ended 30 September 2006. This information is prepared on the basis that all companies within the Group were part of the Group for the full 12 month period commencing on 1 October 2005 and contributed to the performance of the Group for the full year to 30 September 2006, except for Project Air Limited, whose figures are included from the date of acquisition in June 2006. The pro forma financial results for the 12 months ended 30 September 2006 show that the Group delivered growth in line with market expectations. Group turnover was £25 million, pro forma annualised gross profit was £7.2 million and earnings before interest and tax was £3.7 million. The Board is also very pleased to announce that as a result of the profits achieved above, it is proposing to pay a dividend of 0.4p per share which will be made on 30 March 2007 to shareholders on the register at the close of business on 2 March 2007. The Annual General Meeting of Worthington Nicholls will be held at the offices of Halliwells LLP, St. James's Court, Brown Street, Manchester on 23 March 2007 at 10.00 a.m. Pipeline Our pipeline is looking extremely promising and is due mainly to repeat business with existing customers, and a healthy flow of new tenders generated by the full-time Group sales team introduced over the past six months. The new contract wins announced in December 2006 are testament to the sales team's success and we are excited about the level of tenders now being received and our increased conversion rate. Currently, our 2007 new business pipeline shows that we have already converted £28.5 million of orders into contracted revenues with live tenders for £67 million worth of additional new business. Fund raising and acquisitions In conjunction with admitting our shares to trading on AIM in June, we were able to raise £7.5 million from institutional and other shareholders. This capital has helped to fund acquisitions and facilitated organic expansion through the provision of working capital, which is necessary to any company seeking to grow quickly. Later in the year, the Group raised an additional £6 million to take advantage of a number of clearly identified acquisition opportunities which would deepen our presence in the hotel and retail markets. As shareholders are aware, since flotation, we have announced the acquisition of two companies, Project Air Limited and Lumenglow Limited, and anticipate being in the position to complete further acquisitions in 2007. Project Air Limited In June, shortly after joining AIM, we were pleased to announce the completion of our first acquisition through the £4.6 million purchase of the entire issued share capital of Project Air Limited, a strongly profitable specialist installer of air conditioning systems to the retail sector. Project Air's customers include well-known high street retailers, including Phones 4 U, Hamleys, The Bear Factory and TM Lewin. We are expecting to deliver further growth through Project Air's customers and resource base in addition to enhancing both turnover and profitability. Lumenglow Limited In December, the Group made its second acquisition, purchasing the entire issued share capital of Lumenglow Limited ('Lumenglow'), a specialist electrical contractor. Whilst this was a smaller acquisition than the first, it was no less significant. As a supplier to the Group since 2003, we were very familiar with the quality of service delivered by Lumenglow's skilled electricians. In addition to acquiring experienced electricians who have Joint Industry Board for the Electrical Contracting Industry accreditation, it is anticipated that we will enhance Group profits in the current year by substantially reducing our outlay on electrical subcontracting. Before acquiring Lumenglow, the Group had subcontracted around £3 million of electrical work to suppliers other than Lumenglow. Acquiring Lumenglow gives us a significant opportunity to bring these works in-house, thus enhancing profitability. The Lumenglow acquisition is also important strategically, bolstering the Group's presence in London and the South East. Contract Wins During December we were delighted to announce five new hotel group contracts worth in the region of £2.3 million. The contracts were for the provision of installation and maintenance of new and replacement air conditioning systems with five new hotel group clients and was in line with the Group budget for new business in the hotel sector in 2007. With each new hotel or retail group client, Worthington Nicholls aims to secure preferred supplier status, guaranteeing additional contracts through the provision of excellent service, with a strong focus on each customer's particular requirements. Our largest contract, was the full mechanical services installation at the 49 bedroom Hotel du Vin in Cheltenham, and was valued at £860,000. Earlier this month we announced our first European contract win when we secured a contract to install new and replacement air conditioning systems with Grand City Hotels & Resorts at the Park Hotel in Amsterdam, worth approximately €350,000. Grand City Hotels & Resorts is a management company of hotels in The Netherlands and Germany, based in Berlin. The hotels managed by the group operate under various brands including Steigenberger, Ramada, Intercity Hotels, Comfort Inn, Quality Hotels, Mercure, Best Western and Ibis. The Grand City Hotels & Resorts estate has approximately 3,000 bedrooms in Germany. Having won the mandate for the Park Hotel in Amsterdam, the Group is confident that this will pave the way for further expansion into Western Europe. Following these new contracts, Worthington Nicholls is now the retained contractor to 16 hotel groups and 16 retail chains. Board Appointment We have strengthened our Board with the appointment of Mr Tim Hunt as Finance Director from his previous position as non-executive director of the Group. Tim joined us from The John David Group plc and before that worked for major accountancy group KPMG. He has assumed responsibility for all financial aspects of the Group moving forward. We look forward to benefiting from Tim's experience, particularly in acquiring companies and in financial systems' integration. Future Prospects The Board is confident that the Group will continue to benefit from strong demand driven by environmental legislation and from an increased requirement for comfort cooling in hotels, retail outlets and offices. We have already benefited from being in a market sector that is enjoying growth driven by European legislation banning the use of less environmentally friendly R22 refrigerant gases by the end of the decade. Removing R22 usually requires the replacement of entire air conditioning systems, a major exercise for hoteliers and retailers and one where they could naturally look to Worthington Nicholls for support. Once replaced, the new air conditioning systems require regular maintenance. We are pleased to report that recurring revenue streams from maintenance contracts still account for a significant proportion of annual revenue and our aim is to continue to grow this side of our business. Clearly the boost to trade provided by R22 is a great opportunity and we are gearing up to take full advantage of it through organic expansion and by making further acquisitions. With the monies raised in the share placings, we now have in place the financial resources to make further acquisitions. Indeed, we are currently looking closely at a number of identified targets. Our focus is companies operating in our main hotel market sector but we will also look to reduce shareholder risk through diversification into sub sectors, as we demonstrated with the acquisition of Project Air, which strengthened our presence in the retail sector. Working in Europe is also likely to be increasingly of strategic importance to the Group as we expand. Having already secured our first European contract we will look to take advantage of further opportunities as they arise. We look forward to 2007 with great confidence, and expect it to be a year in which we make further strong progress. Peter Worthington Group Chairman 17 January 2007 Worthington Nicholls Group plc Preliminary Financial Statement 30 September 2006 Pro Forma Profit and Loss Account Year ended 30 September 2006 £'000s Turnover 24,841 Cost of sales (17,543) _______ Gross profit 7,298 Administrative expenses - normal (3,619) Administrative expenses - exceptional (1,498) Other operating income - Operating profit Before exceptional items 3,679 Exceptional item (note 1) (1,498) _______ Operating profit 2,181 Other interest receivable and similar income 10 Interest payable and similar charges (233) _______ Profit on ordinary activities before taxation 1,958 Taxation on profit on ordinary activities (363) _______ Retained profit 1,595 _______ Notes 1. The exceptional item above of £1,498,000 relates to £1,112,000 for tax payable on the gifting of shares to employees during the year and £386,000 for directors bonuses pre-reorganisation. Worthington Nicholls Group plc Preliminary Financial Statement 30 September 2006 Consolidated Balance Sheet 30 September 2006 £'000s Fixed assets Intangible assets 28,713 Tangible assets 1,770 _______ 30,483 _______ Current assets Stocks 581 Debtors and prepayments 10,235 Cash at bank and in hand 519 _______ 11,335 Creditors: amounts falling due within one year (7,316) _______ Net current assets 4,019 _______ Total assets less current liabilities 34,502 Creditors: amounts falling due after more than one year (1,462) _______ Net assets 33,040 _______ Capital and reserves Called up share capital 662 Share premium account 30,802 Merger reserve 588 Profit and loss account 988 _______ Equity shareholders' funds 33,040 _______ Worthington Nicholls Group plc Preliminary Financial Statement 30 September 2006 Pro Forma Cash Flow Statement Year ended 30 September 2006 £'000s Net cash outflow from operating activities (2,706) Returns on investments and servicing of finance Interest received 11 Interest paid (209) Interest element of hire purchase contracts (24) _______ (222) _______ Taxation - _______ Capital expenditure and financial investment Purchase of tangible fixed assets (88) Proceeds on disposal of tangible fixed assets 2 _______ (86) _______ Acquisitions Cash consideration (net of cash balances acquired) (3,273) _______ _______ Net cash outflow before management of liquid resources and financing (6,287) _______ Financing Repayment of loans and borrowings (16) Proceeds from issue of equity shares (net of expenses) 7,052 Capital element of hire purchase repayments (29) _______ 7,007 _______ Increase in cash in the period 720 _______ Worthington Nicholls Group plc Preliminary Financial Statement 30 September 2006 Pro Forma Analysis of Net Debt 01 October Cash flow Acquisitions Year ended £000's (excluding cash and other changes) 2005 £'000s 30 September £000's 2006 £'000s Cash at bank and in hand 50 8 461 519 Overdraft (1,218) 251 - (967) (1,168) 259 461 (448) Debt due within one year (35) 16 - (19) Debt due after one year (1,402) - - (1,402) Obligations under hire purchase contracts (118) 29 (15) (104) Net debt (2,723) 304 446 (1,973) The following information is the audited financial results for Worthington Nicholls Group plc for the period from incorporation to 30 September 2006: STATUTORY ACCOUNTS FROM 3 FEBRUARY TO 30 SEPTEMBER 2006 Worthington Nicholls Group plc Preliminary Financial Statement 30 September 2006 Consolidated Profit and Loss Account Note 03 February 2006 to 30 September 2006 £'000s Turnover 7,997 Cost of sales (5,375) _______ Gross profit 2,622 Administrative expenses (1,275) Other operating income 16 _______ Operating profit 1,413 Other interest receivable and similar income 10 Interest payable and similar charges (76) _______ Profit on ordinary activities before taxation 1,347 Taxation on profit on ordinary activities (359) _______ Retained profit 988 _______ Earnings per ordinary share: - Basic 1 3.23p - Diluted 3.14p Turnover and operating profit derive wholly from operations acquired during the period. The Group has no recognised gains or losses other than the results reported above. The results above also represent the historic cost profit. Worthington Nicholls Group plc Preliminary Financial Statement 30 September 2006 Consolidated Balance Sheet 30 September 2006 £'000s Fixed assets Intangible assets 28,713 Tangible assets 1,770 _______ 30,483 _______ Current assets Stocks 581 Debtors and prepayments 10,235 Cash at bank and in hand 519 _______ 11,335 Creditors: amounts falling due within one year (7,316) _______ Net current assets 4,019 _______ Total assets less current liabilities 34,502 Creditors: amounts falling due after more than one year (1,462) _______ Net assets 33,040 _______ Capital and reserves Called up share capital 662 Share premium account 30,802 Merger reserve 588 Profit and loss account 988 _______ Equity shareholders' funds 33,040 _______ RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS As at 30 September 2006 30 September 2006 £'000s Retained profit for the period 988 New share capital subscribed 32,052 _______ Net movement in equity shareholders' funds 33,040 Opening equity shareholders' funds - _______ Closing equity shareholders' funds 33,040 _______ Worthington Nicholls Group plc Preliminary Financial Statement 30 September 2006 Consolidated Cash Flow Statement 03 February 2006 to 30 September 2006 £'000s Net cash outflow from operating activities (2,457) Returns on investments and servicing of finance Interest received 10 Interest paid (55) Interest element of hire purchase contracts (6) _______ (51) _______ Taxation - _______ Capital expenditure and financial investment Purchase of tangible fixed assets (10) _______ (10) _______ Acquisitions Cash consideration (net of cash balances acquired) (16,259) _______ _______ Net cash outflow before management of liquid resources and financing (18,777) _______ Financing Repayment of loans and borrowings (12) Proceeds from issue of equity shares (net of expenses) 18,352 Capital element of hire purchase repayments (11) _______ 18,329 _______ Decrease in cash in the period (448) _______ RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES for the period ended 30 September 2006 03 February 2006 to 30 September 2006 £'000s Operating profit 1,413 Depreciation 27 Decrease in stocks 303 Increase in debtors (3,355) Decrease in creditors (845) Net cash outflow from operating activities (2,457) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT for the period ended 30 September 2006 03 February 2006 to 30 September 2006 £'000s Decrease in cash in the period (448) Cash flow from decrease in debt and lease 23 financing New hire purchase agreements (15) Hire purchase agreements, loans and loan note (1,533) acquired with subsidiary undertakings Increase in net debt in the period (1,973) Net debt at start of period - Net debt at end of period (1,973) Worthington Nicholls Group plc Preliminary Financial Statement 30 September 2006 Analysis of Net Debt 03 February Cash flow Acquisitions 30 September £'000s (excluding cash and other changes) 2006 £'000s 2006 £'000s £'000s Cash at bank and in hand - 519 - 519 Overdraft - (967) - (967) - (448) - (448) Debt due within one year - 12 (31) (19) Debt due after one year - - (1,402) (1,402) Obligations under hire purchase contracts - 11 (115) (104) Net debt - (425) (1,548) (1,973) NOTES TO THE FINANCIAL STATEMENTS 1 Earnings per ordinary share Basic earnings per ordinary share represents the profit for the period of £988,000 divided by the weighted average number of ordinary shares in issue of 30,548,045. The diluted earnings per ordinary share is based on 31,450,900 ordinary shares, the difference to the basic calculation representing the additional shares that would be issued on the conversion of all the dilutive potential ordinary shares. There is no material difference to earnings if all the dilutive potential ordinary shares are converted. 2 Accounts These figures are abridged versions of the Group's full accounts for the period ended 30 September 2006 and do not constitute the Group's statutory accounts within the meaning of Section 240 of the Companies Act 1985. The Group's auditors have audited the statutory accounts for the Group and have issued an unqualified audit opinion thereon within the meaning of Section 235 of the Companies Act 1985 and have not made any statement under Section 237 (2) or (3) of the Companies Act 1985 for the period ended 30 September 2006. Statutory accounts for the period ended 30 September 2006 will be delivered to the Registrar of Companies following the Annual General Meeting. Copies of the full accounts will be sent to shareholders in due course. Additional copies will be available from Worthington Nicholls Group Plc, Ground Floor, Barons Court, Manchester Road, Wilmslow, Cheshire SK9 1BQ. This information is provided by RNS The company news service from the London Stock Exchange

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