WNG Worthington Nic

RNS Number:6883F
Worthington Nicholls Group plc
15 October 2007


Update Regarding Reviews, Board Composition and Trading

On 19 September 2007, Worthington Nicholls Group plc ("Worthington Nicholls", the
"Company" or the "Group"), installers of air conditioning, heating, ventilation 
and chilled water systems, announced, inter alia, that it was undertaking a 
review of its accounting policies, had initiated a strategic and operational
review and would seek to update the market on these matters and on the likely
outturn for the financial year ending 30 September 2007 by the second half of 
October.

Accounting Policy Review

Following the appointment of Chris Neilson to the Board as Interim Finance 
Director, the Audit Committee appointed KPMG to undertake a targeted accounting review.

As independent advisers, KPMG has assisted management in undertaking a review of
certain accounting matters in relation to the major subsidiaries of the Group. 
These subsidiaries account in aggregate, for approximately 77% of turnover and 
93% of net assets.

The scope of the review was designed primarily to:

1.  determine the suitability of certain accounting policies of the Group
    and review what, if any adjustments, 
    might be required to these policies; and

2.  establish the accounting implications of the findings and any adjustments
    deemed necessary as a result thereof.

Based on the work to date, the board of directors of the Company ("the Board") 
presently estimates that write offs totalling #6.5 million to the Group net assets
at 31 March 2007 are necessary.  The impact of these adjustments on current and
prior years is currently being reviewed.  In addition, a substantial write off to
the goodwill held on the balance sheet is anticipated.

Alongside completing the current review on the remainder of the Group, the Board
has instructed KPMG to assist with a full review of the circumstances that have
led to these adjustments.

Board Composition

Since the Company's announcement on 19 September 2007, Alastair Stoddart has been
involved in the business full time, acting as de facto Executive Chairman.

The Board recognises the need to appoint a strong Chief Executive with public
company experience and the skills, commitment and vision to implement and deliver
a credible, sustainable growth strategy for the Group.  Until such an appointment
is made, Mr Stoddart will continue as the Group's Executive Chairman. Candidates
are currently being interviewed and the Company will make an announcement regarding
this role as soon as an appointment has been made.

In the best interests of the Group and to allow the Board freely to identify and
appoint a replacement, Mark Worthington has stepped down as Chief Executive and
from the Board with immediate effect.  Mr Worthington will remain with the Group,
focused on new business development and client relationships.

Trading update

On the 17 August 2007, the Board announced that it anticipated turnover for the
year to 30 September 2007 would be #31.5 million producing a break-even result. 
Prior to the effects of the write offs referred to above, the Board believes that
the Group will report results that are materially in line with its statement of
17 August 2007.

On 12 October 2007 the Group had net cash balances of #10.8 million after a
recent payment of deferred consideration of #600,000 and corporation tax of
#644,000.  The Board considers that there are sufficient cash resources for the
ongoing requirements of the Group.

Strategic and operational review

The strategic and operational review is ongoing. The Board has appointed KPMG
to assist with this exercise. The findings of this review will be presented to
the Board in due course with material matters being relayed to the market 
as appropriate.

The long-term drivers of the Group's business, including global climatic change,
the resultant legislative changes and the demand for air conditioned environments
from consumers, remain intact.  The Directors believe that these factors continue
to provide an exciting and expanding opportunity which, with the Board's planned
changes to management, should enable the Group to build a successful business.


Enquiries:

Worthington Nicholls Group plc
Alastair Stoddart/Chris Neilson             0870 609 1829

Blue Oar Securities Plc
Rhod Cruwys/Romil Patel                     020 7448 4400

Smithfield Group
Katie Hunt/Miranda Good                     020 7903 0603




                      This information is provided by RNS
            The company news service from the London Stock Exchange

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