Final Results

Worthington Group PLC
07 July 2006



Worthington Group plc ('the Company')



Results for the Year Ended 31 March 2006



07 July 2006



At the recent EGM, the sales of the properties at Fence Avenue in Macclesfield
and Eccleshill in Bradford were approved by shareholders. The sale of Fence
Avenue has now completed and the proceeds of £2,750,000 have been utilised in
repaying all Group borrowings, leaving a residual credit balance of
approximately £350,000. The completion of the sale of Eccleshill for £1,050,000
before costs has been delayed by a few weeks to allow completion of planning
formalities and is now expected to complete by the end of July 2006.



For the first time since I joined the Group, we are free of all debt and the
associated costs relating thereto, having repaid some £20m to lenders - a major
achievement given the ongoing issues that we have had to resolve, in a fast
contracting UK textile industry.



The results themselves are a historical reflection of the finalisation of many
outstanding issues and obviously include a number of non-recurring items and
adjustments to bring these financial statements into line, for the first time,
with International Financial Reporting Standards ('IFRS'). The principal change
to the financial statements involves the recognition of the pension deficit of
£1,951,000 on the balance sheet for the first time.



The profits for the current year include losses of £354,000 relating to the
write down in the value of the Fence Avenue premises together with a gain of
£1,068,000 arising from the revaluation of the Keighley property. Head office
expenses, excluding pension deficit contributions, accounted for a loss of
£310,000. The balance relates to the Group's share of losses from associated
companies, namely Trimmings by Design and Worthington Manufacturing Ltd together
with the contribution from Worthington Manufacturing for the period to 31 July
2005 prior to the joint venture.



Group expenses other than pensions are now at their lowest possible level and
are covered by the current rental income from the Keighley property.



Therefore in summary an overall profit of £274,000 was recorded for the year (
2005: loss of £1,154,000 after re-statement in accordance with IFRS) to 31 March
2006 taking all these factors into account.



Our investments in associated companies now comprise Trimmings by Design in
Derby and Worthington Manufacturing in Macclesfield, the latter was created as a
joint venture with a Hong Kong partner in July 2005 following the transfer of
the name, certain fixed assets and the goodwill of our former subsidiary. Both
companies had a difficult trading  year resulting in the recognition of our
share of the losses in the profit and loss account of £121,000 after interest
charges. However the future looks better for them both following the
introduction of structural changes and rationalisation of their cost bases and
we expect to continue receiving dividends from Trimmings by Design in the coming
year.



I am also pleased to report that the wind down of assets and liabilities at our
former subsidiary Worthington Manufacturing has been achieved at full value with
only some £60,000 of book debts and stocks left to realise from a gross value of
some £1,200,000 in July 2005. Talks continue with our Hong Kong joint venture
partner as to the future of Worthington Manufacturing as provided for in the
original agreement - although the proceeds may be reduced by pro rata redundancy
liabilities and our share of losses which are still under discussion.



At 31 March 2006 the Board took the decision to have all the remaining
properties in the Group valued at the year end following the need for formal
valuations for the purposes of the circular. In addition to the gains and losses
on the properties above taken through the income statement, a surplus on
revaluation has been taken to reserves amounting to £624,000 in respect of the
current asset investment property at Eccleshill.



The Keighley site continues to provide a rental income and has now been revalued
to £1,800,000 on an open market basis. However, this is a valuable site and has
potential for further uplift if residential planning can be obtained. We must
now seriously consider applying for such a change of use which will probably be
refused in the first instance, but persistence on appeal might eventually
succeed. It is a brown field site surrounded by residential housing and fits in
with the Government criteria for housing development but currently lies within
an area designated for industrial zoning, meaning we must take a two to three
year view.



The pension scheme continues to be a corporate liability. Not only do we need to
continue to fund the deficit but we also have to fund the associated costs of
administrating and running the scheme which amount to some £60,000 per annum -
included in head office costs. Furthermore the introduction of the pension
protection levy may add to this burden in the coming year. and we await the
assessment of what, in our view, is effectively an unfair tax on the scheme. The
methodology adopted by rating firms which determine the level of levy also in
our view lacks transparency. Our actuaries estimate that this charge may be in
the region of £40,000 per annum.



During the year we have looked at several interesting propositions but without
success. Once the funds come in from the sale of Eccleshill we will be in a much
better position to acquire a business which might resurrect our fortunes. This
so far has not proved to be an easy task.





J C Dwek

Chairman

7 July 2006





Worthington Group plc



Consolidated Income Statement

for the year ended 31 March 2006


                                                                                             Re-stated
                                                                2006                              2005

                                                Notes          £'000                             £'000

Revenue                                                        1,596                             4,908
Cost of sales                                                (1,019)                           (3,714)
Gross profit                                                     577                             1,194


Operating costs - continuing operations                        (346)                             (210)
Exceptional item - continuing operations          2              714                                 -
Operating costs - discontinued operations                      (445)                           (1,253)
Exceptional item - discontinued operations        2               -                              (872)

Group operating profit/(loss)                                    500                           (1,141)

Share of (losses)/profits of associated
undertakings                                                     (90)                               149

Total operating profit / (loss): Group and
share of associated undertakings                                 410                             (992)

Interest payable and similar charges:
   Group                                                       (105)                              (86)
   Share of interest of associated                              (31)                              (32)
undertaking

Profit/(Loss) on ordinary activities before                      274                           (1,110)
taxation

Taxation                                          3               _                                 _
Share of taxation of associated undertaking                       -                                (44)

                                                               

Profit/(Loss) on ordinary activities after                       274                           (1,154)
taxation

Dividends payable                                                  -                                 -
Retained profit /(loss) for the year                             274                           (1,154)


Earnings /(Loss) per share-basic                  4             2.3p                            (9.8p)



The Group has no recognised gains or losses in the preceding year other than
those reported above. For the current year a statement of changes in equity is
disclosed below.





Consolidated Balance Sheet

At 31 March 2006


                                                                                                       Re-stated
Note                                                      2006                                           2005
                                                       £'000      £'000                              £'000      £'000

Non-current assets
Tangible assets                                        1,871                                         1,013
Investments: Interest in associated undertakings         646                                           811
                                                                  2,517                                          1,824
Current assets
Current asset investments                              3,750                                         3,480
Trade and other receivables due within 1 year            387                                         1,455
Trade and other receivables due after more than 1        805                                           869
year
Cash at bank and in hand                                 -                                               1
                                                                  4,942                                          5,805
Total assets                                                      7,459                                          7,629

Current liabilities
Trade and other payables                                 493                                         1,009
Bank overdrafts and loans                              2,030                                           971
                                                       2,523                                         1,980
Non-current liabilities
Bank loans                                                 -                                         1,321
Retirement benefit obligation                          1,951                                         2,313
                                                       1,951                                         3,634
Total liabilities                                               (4,474)                                        (5,614)

Net assets                                                        2,985                                          2,015

Equity
Called up share capital                                          11,807                                         11,807
Share premium account                                             9,836                                          9,836
Capital redemption reserve                                          128                                            128
Revaluation Reserve                                                 624                                              -
Profit and loss account                                        (19,410)                                       (19,756)


Total Equity                                                      2,985                                          2,015





Consolidated Cashflow Statement

for the year ended 31 March 2006

                                                                                                    Re-stated
                                                                2006                                       2005
                                                         £'000    £'000                            £'000     £'000

Net cash outflow from operating activities                         (13)                                      (230)

Cashflow from financing activities
Interest paid                                                      (99)                                      (138)
Proceeds from short term loans                                      179                                         50
Repayment of borrowings
                                                                   (77)                                      (328)
Net cash generated/( used) by financing                              3                                       (416)
                                                                     

Cashflow from investing activities
Interest received                                                    53                                         52
Proceeds on disposal of plant and equipment                         403                                        121
Purchase of plant and equipment                                       -                                       (38)
Investments and loans in associated undertakings                  (300)                                          -
Dividends received from associated undertakings                      44                                         66
                                                                    200                                        201

Increase/(decrease) in cash and cash equivalents                    190
                                                                                                             (445)


Statement of Changes in Equity


                                                                                                       As restated
                                                                2006                                          2005
                                                                  £'000                                      £'000

Retained profit for the financial year                              274                                     (1154)
Revaluation of Property                                             624                                          -
Movement in retirement benefit obligation                           362                                          -
Prior Year adjustment                                             (290)                                          -
                                                                                                               
                                                                   
Total Recognised gains in the year                                  970                                        970

Reconciliation
Opening reserves at 1 April 2005                                  2,015                                      3,169
Total Recognised gains in the year                                  970                                    (1,154)
Closing reserves at 31 March 2006                                 2,985                                      2,015



The prior year adjustment in the Group accounts relate to provisions against
historic balances relating to dormant subsidiaries to be liquidated which only
came to light when preparing to strike them off .





Notes forming part of the preliminary announcement for the year ended 31 March
2006



1.          Accounts



     These financial statements have been prepared for the first time in
accordance with International Financial Reporting Standards ( IFRS) and the
International Financial Reporting Interpretations Committee (IFRIC)
interpretations applicable at the balance sheet date, and with those parts of
the Companies Act 1985 applicable to companies reporting under IFRS. They have
been prepared under the historical cost convention and in accordance with
current IFRS, and are covered by IFRS 1, 'First-time Adoption of International
Financial Reporting Standards'. The Group is required to provide comparative
information for the prior reporting period the year ended 31 March 2005.



     The policies have been consistently applied to all the periods presented.
The Group's consolidated financial statements were prepared in accordance with
United Kingdom Generally Accepted Accounting Principles (UK GAAP) until 31 March
2005. UK GAAP differs in some areas from IFRS. In preparing the 2006
consolidated financial statements, management has amended certain accounting and
valuation methods applied in the UK GAAP financial statements to comply with
IFRS. The comparative figures in respect of 2005 were restated to reflect these
adjustments as disclosed in the reconciliations, and descriptions of the effect
of the transition from UK GAAP to IFRS on the Group's equity and its net income
and cash flows. A reconciliation of these changes is disclosed as Note 7.





Notes forming part of the preliminary announcement for the year ended 31 March
2006 (Cont.)





The adoption of the above IFRS did not result in substantial changes to the
Group's accounting policies under UK GAAP and as set out in the Group's
financial statements for the year ended 31 March 2005. A summary of the changes
is presented below:

• IAS 1 'Presentation of Financial Statements' and IAS 7 'Cash Flow Statements'
have affected the overall presentation and certain disclosures.

• IAS 14 'Segment Reporting' has no material effect on the Group's policy. The
Group continues to operate in property development and textiles which has been
identified as the Group's primary segment. Geography is the Group's secondary
segment.

• IAS 16 'Property plant and Equipment' The Group has adopted the revaluation
model with gains in value being taken to reserves and losses to the income
statement as required by the standard.

• IAS 26 'Accounting and Reporting by Defined Benefit Plans'. The Group adopted
the disclosure requirements of IAS 26 during the year and has recognised the
pension scheme deficit on the Balance Sheet.



• IAS 40 'Investment Property'. The Group has adopted the fair value model of
accounting for investment property and the gain arising from the movement in
fair value over cost is recognised in the income statement.



     The financial information included within the preliminary announcement does
not constitute the group's audited statutory accounts for the financial year
ended 31 March 2006. The financial information for 2005 is derived from the
statutory accounts for that period as adjusted for IFRS. Full audited accounts
of Worthington Group plc in respect of that period (which received an
unqualified audit opinion and did not contain a statement under either section
237 (2) or (3) of the Companies Act 1985) have been delivered to the Registrar
of Companies. The statutory accounts for 2006 will be finalised on the basis of
the financial information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of Companies following the
Company's annual general meeting. The board of directors approved this
preliminary announcement on 7 July 2006.



The Group currently meets its day to day working capital requirements from its
cash reserves. This follows the sale of Fence Avenue on 6 June 2006 for
£2,750,000 the proceeds of which have been utilised to eliminate Group
borrowings in full leaving a net cash surplus. On this basis, the Directors
consider it appropriate to prepare the financial

statements on the going concern basis.





Notes forming part of the preliminary announcement for the year ended 31 March
2006 (Cont.)





2.          Exceptional items


                                                                                     2006         2005
                                                                                    £'000        £'000
Redundancy costs                                                                        -        (215)
Impairment of fixed assets                                                              -        (629)
Other closure costs                                                                     -         (28)
Write down of current asset investment                                              (354)            -
Gain on revaluation of Keighley property                                            1,068            -

Exceptional gain /(loss)                                                              714        (872)



3.         Taxation

                                                                                     2006         2005
                                                                                    £'000        £'000
Adjustments in respect of prior periods                                                 -            -
Share of tax in associated undertaking                                                  -         (44)
                                                                                        -         (44)


4.         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 (2005: 11,807,013) and
the earnings after exceptional items and taxation was £274,000 (2005:
(£1,154,000) ).


There is no difference between the basic and diluted loss per share in either
year.



5.         Reconciliation of operating profit /(loss) to net cash inflow from
operating activities


                                                                                    2006          2005
                                                                                   £'000         £'000
Operating profit/(loss)                                                              500       (1,141)
Depreciation/impairment, amortisation of goodwill and revaluation
adjustments                                                                        (660)           782
Pension scheme net finance charge                                                     55             -
Movement in trade and other receivables                                            1,177         1,087
Movement in trade and other payables                                             (1,085)         (958)
Net cash outflow from operating activities                                          (13)         (230)
                                                                                    




Notes forming part of the preliminary announcement for the year ended 31 March
2006 (Cont.)



6.         Reconciliations of movements in shareholder' funds and between IFRS
and UK GAAP.


The tables below set out the reconciliation between the IFRS accounting
standards adopted on 1st April 2005 and the UK GAAP accounting standards
previously used in the preparation of the Group's accounts.




                                                           31 March  2006  31 March  2005
                                                                    £'000           £'000

Profit/(loss) before Taxation under IFRS                              274         (1,154)

Retirement benefit contribution adjustment                              -           (355)

Profit/(loss) before taxation under UK GAAP                           274         (1,509)

Net Assets

Net assets under IFRS                                               2,985           2,015

Retirement benefit obligation                                           -           2,313

Net assets under UK GAAP                                            2,985           4,328

Capital and Reserves

Shareholders funds under IFRS                                       2,985           2,015

Retained earnings adjustment                                            -           2,313

Shareholders funds under UK GAAP                                    2,985           4,328




                                                                   2006               2005
                                                                  £'000              £'000
Reconciliation of movements in shareholders' funds
Opening shareholders' funds at 1 April under IFRS                 2,015              3,169
Prior Year adjustment                                             (290)                  -


Opening shareholders' funds at 1 April under IFRS as              1,725              3,169
re-stated
Revaluation of Properties                                           624                  -
Movement in retirement benefit reserve                              362                  -
Profit/ ( loss) after tax for current year
                                                                    274             (1,154)
Closing shareholders' funds at 31 March under IFRS                2,985              2,015




Notes forming part of the preliminary announcement for the year ended 31 March
2006 (Cont.)



7.         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.



Enquiries:



Worthington Group plc


Joe Dwek CBE, Chairman                        Tel: [phone]




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