Trading Statement

Worthington Nicholls Group plc
07 December 2007


                         Worthington Nicholls Group Plc
                   ('Worthington Nicholls' or the ' Company')
                             Current Trading Update


7 December 2007


INTRODUCTION

In the announcement dated 15 October 2007 (the 'Trading Update'), the Company
disclosed inter alia, proposed write-downs to net assets of £6.5 million as at
31 March 2007.  These proposed write-downs were disclosed following the
Directors' own review and took into account a draft report dated 12 October 2007
prepared by KPMG as independent advisers who had been asked to conduct a review
of certain asset categories in the balance sheet of the principal trading
company as at 31 March 2007.

On 21 November 2007, Simon Beart, William Good and Rodney Mann (the 'New 
Board'), were appointed to the Board.  The Company's shares were suspended from
trading on AIM on 3 December 2007.

The New Board has reviewed the write-downs, and believes that additional
disclosures to the Trading Update are required.  In addition, following further
work, by both KPMG and the New Board, further provisions and write-downs are
believed necessary.

This announcement sets out the New Board's current estimate of the write-downs
that it anticipates will be required.  The New Board is not anticipating that
further material write-downs, other than as disclosed in this announcement, will
be required.


WRITE DOWNS / PROVISIONS

Initial provisions included in the Trading Update figure of £6.5 million as
announced on 15 October 2007 were as follows:


                                                                                                    As at 31 March 2007
                                                                                                                 £'000s

Matched costs*                                                                                                    3,100
Trade debtors and retentions                                                                                        760
Specific contract issue                                                                                             699
Unallocated accrued income                                                                                          500
Stock and WIP                                                                                                       776
Debit notes not recovered                                                                                           300
Other                                                                                                               365

Total                                                                                                             6,500



* Matched costs was the name given by the Company to expenditure carried forward
to be matched against future revenue.  This expenditure should have been
expensed.

The scope of the independent review commissioned from KPMG was limited to
consideration of some of the principal assets in the balance sheet of
Worthington Nicholls Group Plc and a brief review of the Woods Holdings Wilmslow
Limited (and its subsidiaries) ('Woods') which was acquired by the Group in May
2007.  The scope of the independent review did not cover the rest of the Group.

After further review the New Board currently estimates that adjustments of
aggregate £15.9 million will be required to reduce the net assets as reported in
the management accounts as at 30 September 2007.  These adjustments are stated
before taking into account impairment of goodwill and taxation matters:


Estimated adjustments required to the September 2007 Management Accounts

                                                31 March 07       30 September 07        Total
                                            Per 15 Oct 2007  Management Accounts*   Provisions
                                               announcement
                                                     £'000s                £'000s       £'000s

Matched costs                                         3,100                              3,100
Trade debtors and Retentions                            760                3,000         3,760
Specific contract issue                                 699                                699
Unallocated accrued income                              500                2,700         3,200
Stock and WIP                                           776                  200           976
Debit notes not recovered                               300                                300
Other items                                             365                   800        1,165
Fixed Assets                                                                  800          800
Other Prepayments                                                             400          400
Loss making contracts                                                       1,500        1,500
                                                      _____                 _____       ______
Total                                                 6,500                9,400        15,900



* Further work will be carried out to determine the allocation of these
adjustments between the different accounting periods.


PREVIOUS YEARS' TRADING

The accounting adjustments outlined above include amounts to be allocated in
respect of prior-year accounting periods.

The amount of matched costs included in debtors was £0.7 million at 1 October
2005 and £3.1 million at 30 September 2007.  The New Board will not carry
forward any element of matched costs relating to pre-contract expenditure.

In addition, across the Group, debtors over 90 days currently amount to £2
million and unpaid retentions are currently being written off which have been
taken to profit in at least the last two accounting periods to 30 September
2007.


YEAR ENDED 30 SEPTEMBER 2007

In the Trading Update the previous Board stated that 'prior to the effects of
the write offs referred to above (£6.5million as disclosed in the Trading
Update) the Board believes that the Group will report results that are
materially in line with its statement of 17 August 2007', being a break-even
result.

This indication of break-even trading was stated as prior to the effects of the
write-offs then disclosed.  A significant element of these write-offs relate to
trading issues in the year ended 30 September 2007, including unallocated
accrued income of £500,000 and an increase in matched costs in the year of
approximately £715,000, as detailed above.  This result also included a
pre-acquisition, exceptional profit of approximately £476,000 generated by a
property sale in respect of a recently-acquired subsidiary.


CARRYING VALUE OF INVESTMENTS

As a result of work conducted by both KPMG and the New Board, and on the basis
of the Group's current trading, the New Board believes that the carrying value
of the Group's trading subsidiaries, per the management accounts as at 30
September 2007, which is in excess of approximately £45 million, is likely to be
significantly overstated.

An impairment review, audited by Deloitte, will be conducted and the appropriate
adjustments will be disclosed in the Report and Accounts of the Group for the
year ended 30 September 2007.


Forensic Investigation

KPMG has examined some but not all of the circumstances surrounding the need for
provisions and write-downs across the Group.  KPMG has drawn the New Board's
attention to various accounting matters including, inter alia, the accounting
for matched costs and accrued income in Worthington Nicholls Group Plc and the
available support for some of the reported numbers.  The Company is taking
further professional advice, to establish, inter alia the implications relating
to the accounting matters referred to above.


Management

The former Chief Executive, Mark Worthington, has been dismissed.

Alastair Stoddart, until recently the acting Executive Chairman, has resigned.

Rodney Mann will, therefore, become Chairman.   The New Board is expected to
make other senior management changes and replacements shortly.


Advisers

The Company will be appointing Deloitte as auditors in replacement for HWCA Ltd
of Preston Lancashire and has appointed Osborne Clarke as group legal advisers.
  As stated previously, Cenkos Securities plc has been appointed as the
Company's Nominated Adviser in place of Blue Oar Securities plc.


Year End

The new Board believes that it is inappropriate for a business such as the
Worthington Nicholls Group to have a 30 September year end requiring annual
results and update during the December/January period.

Accordingly, it is proposed that the Group's year end and that of all its
subsidiaries be moved to 31 March.  The Group will, therefore, publish audited
accounts for the year ending 30 September 2007 and for the six month period to
31 March 2008.


CASH BALANCES

The Group has net cash balances of approximately £10 million.  This amount does
not include a repayment mortgage of approximately £1.06 million in respect of an
investment property held on the balance sheet at a value of approximately £1.5
million, loan notes redeemable in May 2008 to the value of £675,000 and hire
purchase liabilities to the value of approximately £150,000.  The New Board is
not aware of any further material indebtedness.

The Board has reviewed the liabilities potentially payable under the earn outs
relating to previous acquisitions.  These payments are currently not estimated
to exceed £3 million in aggregate and are expected to be satisfied in cash over
the next two years, subject to agreed profit targets being achieved.


PROSPECTS AND FINANCIAL STATUS


The New Board intends to adjust rapidly the fixed cost base where appropriate,
generating immediate monthly cash savings.  The changes to financial process and
management will take a period of time but these are challenges with which the
New Board is familiar.

The group remains robustly financed with substantial cash balances and the New
Board believes that the group is one of the larger and more experienced
competitors in its markets, with considerable engineering and technical skills.

The Board does not expect service levels or engineering skills to be adversely
affected as result of recent changes and the adjustment to the cost base. The
Group will, therefore, continue to manage existing business for customers and
continues to seek to win new business including bidding for at least two large
new contracts.

Following this statement the New Board has requested that trading in its
ordinary shares on AIM be restored.  It is anticipated that trading in the
Company's shares will be resumed at 7:00 a.m. on 10 December 2007.


For further information, please contact:

Worthington Nicholls Group plc
Simon Beart, Chief Executive
07710 444370

Cenkos Securities plc
Nicholas Wells
020 7397 8900




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