Placing and trading update

Worthington Nicholls Group plc
10 November 2006



                           Worthington Nicholls Group

    Placing of 6,666,667 new Ordinary Shares at 90 pence per share to raise
                                   £6,000,000
                                 Trading update
                    Notice of Extraordinary General Meeting

                         Nominated Adviser and Broker:
                             Corporate Synergy Plc


Worthington Nicholls Group plc ('Worthington Nicholls' or 'the Group'), one of
the UK's leading independent installers of air conditioning, heating,
ventilation and chilled water systems, announces today that the Group has,
subject to shareholder approval, raised £6 million, before expenses, by way of a
placing of 6,666,667 new Ordinary Shares at 90p per new Ordinary Share, in order
to increase Group working capital and provide further funding for identified
acquisitions.


Highlights:
                                                           
  • raised £6 million with institutions at 90p

  • financial results for the year ended 30 September 2006 will be in line
    with market expectations

  • the Group's quotation register is significantly ahead when compared to the
    same time last year

  • although Project Air will not have a material impact on the results of the
    Group for the year ended 30 September 2006, it has performed ahead of
    Directors expectations for the 3 months since acquisition

  • further acquisitions have been identified which the Directors believe
    would impact positively on Group results going forward


Mark Worthington, Chief Executive of Worthington Nicholls, said:

'With £6 million of new funds secured we will be able to accelerate our growth,
particularly if we can deliver the attractive acquisitions that have been
identified.'


Placing statistics:

Placing Price                                                                                            90p

Number of Ordinary Shares in issue prior to the Placing                                           66,165,049

Number of Placing Shares to be issued pursuant to the Placing                                      6,666,667

Number of Ordinary Shares in issue following the Placing                                          72,831,716

Percentage of enlarged issued share capital represented by the Placing Shares                          9.15%

Approximate proceeds of the Placing available to the Company (net of expenses)                  £5.7 million
Market capitalisation following the Placing at the Placing Price                               £65.5 million



Enquiries:

Worthington Nicholls                                            0870 609 1829
Mark Worthington, Chief Executive
David Levis, Corporate Director

Gresham PR Ltd                                                  020 7404 9000
Neil Boom / Tanya Feness

Corporate Synergy                                               020 7448 4400
Rhod Cruwys / Romil Patel


Information on Worthington Nicholls can be accessed via the Group's website:
www.worthington-nicholls.co.uk


Further information:


Background

The entire issued share capital of the Company was admitted to trading on AIM in
June 2006 raising £6.6 million, after expenses, in order to fund growth and to
provide working capital for the Group. The Group operates as principal
contractor for delivery of end to end solutions in the air conditioning market,
from initial survey through design and specification to installation and ongoing
maintenance.

The Group's customers include a range of blue-chip companies operating in a
number of different market sectors including hotel and leisure, retail,
restaurants, manufacturing and technology industries.

The Group's aim is to become the pre-eminent support services supplier in the
heating, ventilating and air conditioning sector in Europe.


Current trading and prospects


Organic growth

The Directors are happy to announce that the Company's financial results for the
year ended 30 September 2006 will be in line with market expectations.

This is particularly pleasing considering the significant demands that the AIM
admission process put on the management of the business. The fact that the
business continued to make progress during this year is a testament to the
quality and commitment of everyone within the Group.

The Directors are excited by the current prospects of the Group. The emphasis on
the quality of client service has led to a high percentage of reoccurring
revenue with existing customers, which means that the quotation register is
significantly ahead when compared to the same time last year.  In addition to
its existing hotel chain customers, the Group is currently in discussions with a
further 5 hotel chains which, in aggregate, own in excess of 90 hotels.


Acquisitions

On 26 June 2006 the Company acquired the entire issued share capital of Project
Air Limited which prior to completion, acquired the assets of its associated
partnership (together referred to as 'Project Air'). Project Air is a specialist
installer of air conditioning systems to the retail sector. Its customers
include well-known high street retailers, such as Phones 4 U, Hamleys, The Bear
Factory and TM Lewin.

In the year to 30 April 2006, Project Air reported turnover of approximately
£3.5 million generating approximately £0.79 million in post-tax profits.

The Directors have been very pleased with the performance of Project Air for the
three months since the acquisition. Project Air has provided a valuable route
into the commercial air conditioning market. The results of Project Air are
ahead of our expectations although they will not have a material impact on the
results of the Company for the year ended 30 September 2006.

The admission of the Company to AIM has seen the profile of the Group increase
with customers, potential customers and other companies operating in the air
conditioning, ventilation and heating sector. This increased profile has led to
a number of companies in the sector approaching the Group with a view to
exploring the possibility of joining the Group.

The Directors have been actively assessing these targets, focusing on how they
would fit within the Group's current operations and whether acquisition of the
targets would  enhance earnings of the Shareholders.

In this respect, the Directors are in active discussions with a number of target
businesses and are confident that the Company will be able to conclude two
acquisitions within this quarter which will meet such requirements. Brief
details of these acquisitions are:

  • target 'A' (''Target A''), which acts as a building/fit out sub-contractor
    based in Kent and for the 8 month period to 31 August 2006 had a turnover of
    approximately £2.7 million. The Group already works closely with Target A
    and has historically accounted for a large percentage of Target A's
    turnover; and

  • target 'B' (''Target B''), which acts as an electrical sub-contractor
    based in London and for the year to 31 July 2006 had a turnover of
    approximately £0.8 million. Target B is a NIC EIC (National Inspection
    Council for Electrical Installation Contracting) approved contractor. The
    Directors believe that a successful acquisition of Target B would enable the
    Group, in the future, to retain a significant proportion of the electrical
    work that, in the previous financial year, had to be subcontracted outside
    of the Group.

The Directors anticipate that these acquisitions will positively affect the
financial results of the Group and help develop the Group's order book, through
access to a wider client base and an increase in the services which the Group
can offer to its customers.


Reasons for the placing and use of proceeds

Owing to market demand for the Company's shares and the acquisition
opportunities available to the Company, the Directors consider that the Placing
is in the best interests of the Group.

The Company raised £6.6 million, after expenses, on admission of the entire
issued share capital of the Company to trading on AIM in June 2006. The monies
raised by the Group have been used by the Group as follows:

  • £3 million for the acquisition of Project Air;

  • £1 million to repay the Group's bank facility; and

  • £2.6 million towards working capital to fund growth of the Group.

The Directors intend to utilise the net proceeds of the Placing, being
approximately £5.7 million, to pursue additional, identified acquisition
opportunities and to provide additional working capital to assist further
expansion of the Group.


Admission to AIM

Application will be made to the London Stock Exchange for all the Placing Shares
to be admitted to trading on AIM.  Conditional upon the passing of the
Resolutions, Admission is expected to become effective and trading in the
Placing Shares to commence on AIM on 5 December 2006.


EGM

An EGM of the Company is to be held at 10.00 a.m. on 4 December 2006 at St.
James's Court, Brown Street, Manchester M2 2JF.   The following Resolutions will
be proposed at the EGM:

(i) resolution number 1 will be proposed as an ordinary resolution to increase
the authorised share capital of the Company from £850,000 to £900,000, by the
creation of 5,000,000 Ordinary Shares each ranking pari passu in all respect
with the Existing Ordinary Shares;

(ii) resolution number 2 will be proposed as an ordinary resolution for the
purpose of authorising the Directors, pursuant to section 80 of the Act to allot
relevant securities up to £238,500 in nominal amount; and

(iii) resolution number 3 will be proposed as a special resolution for the
purpose of empowering the Directors, pursuant to section 95 of the Act to allot
equity securities (as defined in the Act) outside Shareholders' statutory
pre-emption rights under the Act to the extent specified in the resolution.


Appendix

                                          DEFINITIONS

'Admission'                             admission of the Placing Shares to trading on AIM and
                                        becoming effective in accordance with the AIM Rules

'AIM'                                   AIM, a market operated by the London Stock Exchange

'the Company' or 'Worthington Nicholls' Worthington Nicholls Group plc (registered in England
                                        and Wales under company number 5697574)

'Corporate Synergy'                     Corporate Synergy Plc, nominated adviser and broker to
                                        the Company (registered in England and Wales under
                                        company number 2617599)

'CREST'                                 the computer based system and procedures which enable
                                        title to securities to be evidenced and transferred
                                        without a written instrument and which is operated by
                                        CrestCo Limited, the operator of CREST

'Directors' or 'Board'                  the directors of the Company at the date of this
                                        document

'Enlarged Share Capital'                the issued ordinary share capital of the Company
                                        immediately following Admission including the Placing
                                        Shares

'Extraordinary General Meeting' or 'EGM the extraordinary general meeting of the Company
'                                       convened for 10.00 a.m. on 4 December 2006, notice of
                                        which is set out at the end of this document

'Existing Ordinary Shares'              the 66,165,049 Ordinary Shares in issue on the date of
                                        this document

'Group'                                 the Company and its subsidiaries and subsidiary
                                        undertakings at the date of this document

'London Stock Exchange'                 London Stock Exchange plc

'Ordinary Shares'                       the ordinary shares of 1 pence each in the capital of
                                        the Company

'Placing'                               the conditional placing by Corporate Synergy of the
                                        Placing Shares at the Placing Price in accordance with
                                        the Placing Agreement

'Placing Price'                         90 pence per new Ordinary Share

'Placing Shares'                        the 6,666,667 new Ordinary Shares to be issued pursuant
                                        to the Placing

'Resolutions'                           the resolutions set out in the notice of Extraordinary
                                        General Meeting at the end of this document

'Shareholders'                          holders of Ordinary Shares




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