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Worthington Group (WRN)

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Tuesday 31 July, 2012

Worthington Group

Final Results

RNS Number : 9300I
Worthington Group PLC
31 July 2012
 



Worthington Group plc ("the Company")

 

Results for the Year Ended 31 March 2012

 

Chief Executive's Statement

 

The year ending 31st March 2012 has been an eventful year for the Company which has been followed by the departure of the incumbent Board on 1st June 2012, just 2 months after the year end.

 

The Company recorded a loss for the year of £625,000 (2011: profit of £2,077,000) which was largely due to increased pension costs, and professional fees and costs involved in the proposed development of our Keighley site.

At the year end, our cash balances had increased slightly to £264,000, from £247,000 in 2011. Unfortunately, for actuarial reasons, the Pension Scheme deficit increased from £2,842,000 in 2011 to £3,933,000 at the end of 2012. The pension scheme funding risk continues to represent the principle risk factor faced by the Company.  The Company pays £110,000 per annum to the Pension Scheme plus 20% of any pre tax profits made in the year. The Company also pays the annual PPF levy previously borne by the Scheme. We continue to monitor closely the performance of the Scheme's investments which total £7.9m (2011: £8.3m).  Early in 2012,  the Trustees of the Scheme were in the process of advancing a secured loan of circa £3m to Rangers Football Club ("RFC"), on very advantageous terms, when RFC was placed into Administration on 14th February 2012. The loan had never completed, but the Administrators of  RFC, Duff & Phelps, now have these funds in their solicitor's client's account and the recovery of these monies is subject to ongoing legal proceedings. Our legal team are confident that the £3m will be recovered, plus interest & costs.

 

Following the departure of the main tenant from the Keighley site in 2011, and in order to save business rates on an empty property, the site has now been mostly cleared. This was carried out at nil cost to the Company, and the rental income has now ceased. In 2011, the Company had every reason to believe that a planning application for a multi-use development, to include a Cinema, a Hotel, Retail outlets, Industrial and some Residential, would be favourably received by the local authority planners.  However, when the plans were submitted to the council planning office, the Company was informed that a more suitable multi - use site had been identified, and that an application for purely residential use, approximately 200 homes, was now in favour. The Company was therefore asked to withdraw its application and resubmit for this alternative use. Whilst it is unfortunate that the site no longer has the potential originally envisaged, there is still considerable value in the land for residential use. A large amount of the work done thus far for the planning application can, however, be used in this new application. The Board is currently considering how to achieve the highest possible return from the Keighley site for the Company.

 

Trimmings By Design ("TBD") is an associated company, in which the Company holds a 44% shareholding and also has a seat on the Board. During the year, the Company received a dividend of £44,000 from TBD (2011:  nil). The Board of TBD are to be congratulated on maintaining profitability and delivering a return for the Company, I wish them the very best for the future.  By working closely with the Board of TBD, I am confident that our return from this investment can be enhanced, and also continue to be a regular source of income for the Company in the years to come.

 

As I mentioned on my appointment on 1st June 2012, I have introduced several potential acquisitions to the Company and we are currently progressing to due diligence on two potential unquoted opportunities. Announcements will follow if, and when, appropriate. To increase shareholder value, it is important to bring other businesses into the Group in order to generate healthy profits.

 

Your new Board is committed to increasing shareholder value in the Company.  I am confident that, over the coming year, much progress will be made, and a secure future for your Company will be made possible.

 

Doug Ware

 

Chief Executive                     31 July 2011



Worthington Group plc

 

 

Income Statement

for the year ended 31 March 2012

 

 

 

 

 

Total

Total

 

 

2012

2011

 

Note

£'000

£'000

 

 

 

 

Revenue

2

43

140

 

 

 

 

Cost of sales

 

(115)

(154)

 

 

_________

_________

Gross loss

 

(72)

(14)

 

 

 

 

Administrative expenses

 

(165)

(151)

Share based payment

 

(166)

-

Pension expenses

 

(235)

32

 

 

_________

_________

Operating (loss) / profit

 

(638)

(133)

 

 

 

 

Investment revenues

3

87

88

Fair value gain on investment property

4

-

2,200

Pension Finance costs

5

(101)

(110)

Share of results of associate

6

27

32

 

 

_________

_________

(Loss)/profit before taxation

 

(625)

2,077

 

 

 

 

Taxation

8

-

-

 

 

_________

_________

(Loss)/profit after taxation for year

 

(625)

2,077

 

 

_________

_________

 

 

 

 

(Loss)/earnings per ordinary share from continuing operations

 

 

 

 

 

 

 

- Basic

9

(5.3p)

17.6p

-Fully diluted

9

 N/A

N/A

 

                                                                                                                             

All items are derived from continuing operations.

 

 

Statement of Comprehensive Income



For the year ended 31 March 2012





2012

2011



£

£

(Loss)/profit for the year


(625)

2,077





Actuarial (loss)/profit on retirement benefit obligation


(979)

328



_______

_______

Total comprehensive (loss) /income for the year


(1,604)

2,405





Attributable to:




Owners of the parent


(1,604)

2,405



_______

_______

 

 

Statement of Financial Position




For the year ended 31 March 2012










2012

2012

2011

2011


£'000

£'000

£'000

£'000






Non-current assets





Investment property

-


4,000


Interests in associates

140


157


Other financial assets

800


800



_____


_-___









940


4,957

Current assets





Inventories

4,000


-


Trade and other receivables

34


483


Cash and bank balances

264


247



_____


_-___




4,298


730



_____


_____

Total assets


5,238


5,687






Current liabilities





Trade and other payables

106


208



_____


_____








106


208



_____


_____


Non-current liabilities





Retirement benefit obligation

3,933


2,842



_____


_____



3,933


2,842



_____


_____







Total liabilities


(4,039)


(3,050)



_____


_____






Net assets


1,199


2,637



_____


_____

Equity





Called-up share capital


1,181


1,181

Share premium account


9,836


9,836

Other reserve


10,626


10,626

Share based payment


166


-

Retained earnings


(20,610)


(19,006)



_____


_____






Total equity


1,199


2,637



_____


_____

 

 

 

                                                                                                          

Changes in Equity







For the year ended 31 March 2012
























Share




Share

Share

Other

Based

Retained



Capital

Premium

Reserve

Payment

Earnings

Total


£'000

£'000

£'000

£'000

£'000









At 1 April 2010

11,807

9,836

-

-

(21,411)

232








Purchase and cancellation







of deferred shares

(10,626)

-

10,626

-

-

-








Total comprehensive income for the year

-

-

-

-

2,405

2,405


_____

_____

_____

_____

_____

_____








At 31 March 2011

1,181

9,836

10,626

-

(19,006)

2,637








Share based compensation

-

-

-

166

-

166








Total comprehensive income for the year

-

-

-

-

(1,604)

(1,604)


_____

_____

_____

_____

_____

_____








Balance as at 31 March 2012

1,181

9,836

10,626

166

(20,610)

1,199


_____

_____

_____

_____

_____

_____

 

 

 

 

Cash Flow Statement



for the year ended 31 March 2012







2012

2011


£'000

£'000

Cash flow from operating activities



Operating loss

(638)

(133)

Movement in trade and other receivables

99

(71)

Movement in trade and other payables

(102)

109

Share based payment

166

-

Receipts from/(payments to) pension scheme 

11

(180)


_____

_____

Net cash outflow from operating activities

(464)

(275)




Cash flows from investing activities



Interest received

87

41

Dividends received

44

-

Loans advanced

-

(350)

Loans repaid

350

-


_____

_____

Net cash generated /(used) by investing activities

481

(309)







Increase/(decrease) in cash and cash equivalents

17

(584)

Opening cash and cash equivalents

247

831


_____

_____

Closing cash and cash equivalents

264

247


_____

_____




 


Worthington Group plc

 

Notes forming part of the preliminary announcement for the year ended 31 March 2012.

 

 

1. Basis of preparation

 

Worthington Group plc is a company incorporated in the United Kingdom. The Company has its primary listing on the London Stock Exchange.

 

The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

 

The financial information in this announcement, which was approved by the Board of Directors on  31 July 2012, does not constitute the Company's statutory accounts for the years ended 31 March 2012 or 2011, but is derived from these accounts.

 

Statutory accounts to 31 March 2011 have been delivered to the Registrar of Companies and those for 2012 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 S498 of the Companies Act 2006.

 

The financial information has been prepared on the historical cost basis, except for the revaluation of certain properties and assets. The principle accounting policies applied in the preparation of the consolidated financial statements are consistent with those set out in the statutory accounts for 2011.

 

 

2. Operating segments

 

The Company has adopted IFRS 8 with effect from 1 April 2009. IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Company that are regularly reviewed by the Chief Executive to allocate resources and assess performance. 

 

As a result, following adoption of IFRS 8, the Company's only reportable segment remains property rental and management in the UK.

 

 

3. Investment Revenues




2012

2011


£'000

£'000

Loan note interest

52

52

Interest and arrangement fees on bridging loans

35

35

Interest on bank deposits

-

1


_____

_____


87

88


_____

_____










4. Investment property

2012

2011


£'000

£'000




Fair value at 31 March

-

4,000


_____

_____




 

The directors understand that the local planning authority's current view is that the preferred use for the property in Keighley is now for high density residential development, as opposed to the multi use development previously sought. The directors are currently considering the best way to maximise value from the property with this change of use.  Previously, in 2011, the property had been valued at £4m. After correspondence with the directors who held office at the relevant date, the current directors see no reason to change this view; however, when the exact density and mix of housing is known, this value may well increase or decrease.

 

Revenues receivable in respect of the property amounted to £43,000 (2011: £140,000). Operating costs in respect of the property amounted to £115,000 (2011: £154,000). The operating costs in 2012 included costs related to the planning application including architects and legal fees and monies paid to Corporate Services Associates Ltd for consultancy services.

 

After the tenant vacated the remaining building on the property in the summer of 2011, the building was demolished. This was in order to save business rate costs on unoccupied property pending planning and redevelopment of the site. Rental income has therefore now ceased. The demolition was achieved without cost as a result of salvage sales of materials on the clearance of the site.

 

The directors are presently continuing to progress planning permission for a development on the site, but consider that, in due course, the site will be sold rather than the Company building out the project itself. Accordingly at 31 March 2012 the property has been reclassified from an investment property to inventories in current assets at the director's valuation of £4m pending an eventual sale.

 

 

5. Pension Finance Costs




2012

2011


£'000

£'000




Pension scheme net finance charge

101

110


_____

_____




6. Share of results of associates




2012

2011


£'000

£'000




Share of profits

48

57

Associates' net finance costs

(21)

 (25)


_____

_____


27

32


_____

_____







7. Inventories

2012

2011


£'000

£'000




Inventories

4,000

-


_____

_____

 

 

Inventories comprise land for redevelopment which has been transferred in at the director's valuation of £4m and this will be the base cost from 1 April 2012.

 

8. Taxation

 

No corporation charge has been provided for 2012 or 2011 as a result of the availability of various reliefs.

 

 

 

9. Earnings per share

 

The earnings per share has been calculated using the weighted average number of ordinary shares in issue during the relevant financial periods. The weighted average number of shares in issue during the year was 11,807,014 (2011:11,807,013) and the loss after taxation was £625, 000 (2011: profit £2,077,000). There is no difference between the basic and diluted losses per share in either year.

 

 

10.  Related party transactions

 

During the year the sum of £50,000 (2011: £88,000) was paid to Corporate Services Associates Ltd for services in respect of Anthony Cooke and Peter Townsend. Peter Townsend is a director and shareholder of Corporate Services Associates Ltd.

 

During the year the sum of £5,000 (2011: £nil) was paid to Richmond Corporate Developments Limited for the services in respect of Anthony Cooke.

 

Included in other financial assets are loan notes of £800,000 (2011: £800,000) due from Trimmings by Design Limited an associated company in which the Company has a 44% interest.  The loan notes are subject to interest at 6.5% amounting to an interest revenue for the period of £52,000 (2011: £52,000) and as at the period end there was £13,000 (2011:  £13,000) of unpaid interest within Trade and other receivables.

 

 

11. Statement of Directors' responsibilities

 

Each of the Directors confirms that to the best of their knowledge:

 

1.      The financial statements within the full Annual Report and Accounts from which the financial information within this Final Results announcement has been extracted, have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

 

2.      The management report, which is incorporated into the Directors' Report, includes a fair review of the development and performance of the business and the position of the Company taken as a whole, together with a description of the principal risks and uncertainties

 

 

12. Copies of the Annual Report

 

Copies of the Annual Report will be available from the Company Secretary at the registered office which is situated at 1 The Green, Richmond, Surrey TW9 1PL. The annual report and AGM notices will also be available for download on the Company's website www.worthingtongroupplc.co.uk at the appropriate time.

 

 

 


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