WNG Worthington Nic

RNS Number:3432H
Worthington Nicholls Group plc
09 November 2007

                         Worthington Nicholls Group Plc
                   ("Worthington Nicholls" or the "Company")

                           NOTICE OF GENERAL MEETING

On 24 October 2007, the Board announced that it had received a notice from the
Requisitioning Group requisitioning a general meeting to consider resolutions
for:

*    the removal from office as directors of the Company of Alastair Stoddart, 
     Christopher Neilson, David Levis and Stephen Mulligan; and

*    the appointment as directors of the Company of Simon Delaval Beart,
     Ian Rodney Mann and Thomas William Good.

The purpose of this announcement is to:

1.   provide details of the General Meeting to consider the Resolutions;
2.   provide Shareholders with an overview of the processes undertaken and the 
     measures implemented by the Board since its interim results announcement 
     made on 29 June 2007;
3.   inform Shareholders of the considerable progress made by the Board in 
     identifying a Chief Executive and a permanent Finance Director for
     the Company; and
4.   provide a recommendation and practical advice to Shareholders as to how to 
     vote on the Resolutions.

General Meeting

On 8 November 2007 the Company posted a circular to Shareholders to consider the
resolutions as briefly described above.  The General Meeting will be held at 10:
00am on 6 December 2007 at Halliwells LLP, St. James Court, Brown Street,
Manchester M2 2JF.

Action taken by the Board

Following the adverse reaction of the market to the Company's announcement of
its interim results in June 2007 the Board has been working strenuously to
stabilise the business, to identify the strengths and weaknesses within the
business and to provide solutions to the issues identified during this process.
The action taken to date can be summarised under the following headings:

Strategic and Operational Review

In September 2007 the Board initiated a strategic and operational review, which
is an ongoing exercise.  The Group's strategy has been to grow organically
within a favourable regulatory and market framework both in the UK and Europe
and by selective acquisitions of businesses operating in markets related to air
conditioning services.

The Group has made good progress with its strategy by acquiring five businesses,
which, in the Board's opinion, have strengthened the capability of the Group.
At the same time, regrettably, the Group's trading performance has been
adversely impacted by:

*         contract delays;
*         poor operational execution; and
*         the unseasonal weather conditions this summer.

The Board has concluded to undertake the following:

*         cease acquisition activity until the newly acquired companies are
          fully integrated into the Group;
*         stabilise trading performance; and
*         strengthen the Board.

In addition, we have identified four specific areas where the introduction of
best practice to common functions across the Group could, in the near term, make
our controls more robust and save costs as follows:

*         improving management of contracts;
*         reviewing under performing businesses;
*         resource utilisation; and
*         integration of acquisitions and centralisation of core skills.

Throughout the review, management has been working to secure orders and
contracts from its continuing customer relationships. The Board also continues
to believe in the strength of the business opportunities available to the Group.

Financial Review

The audit committee commissioned KPMG to undertake a review of certain of the
Group's accounting practices and as a result we advised Shareholders in October
that net assets should be written down by #6.5 million.  The majority of this
amount relates to accounting calculations that had the effect of advancing the
recognition of income.  These accounting practices have now ceased, which should
provide management and Shareholders with greater clarity as regards the
financial performance of the Company in the future.

Further details of these matters will be contained within the Company's audited
accounts for the year ended 30 September 2007.

Strengthening the Board

On 3 July 2007, I was appointed Chairman of the Company, with Peter Worthington,
the founder of the Company retiring from the Board.

Having recognised the need to strengthen the Board, on 19 September 2007, Chris
Neilson joined the Board as interim Finance Director in order to provide
stability to the Company. The Board also tasked Chris with the implementation of
the financial review by KPMG and to oversee that process.

Since then, the Board has been working to identify a new Chief Executive with a
remit to implement change, strengthen trading performance and restore
credibility with stakeholders, in particular institutional investors.  Mark
Worthington stepped down as Chief Executive and from the Board on 15 October
2007 to facilitate this process.

Identifying a new Chief Executive

On 29 October 2007, the Board announced it was in a process of identifying a
suitable Chief Executive and permanent Finance Director for the Company. The
Board announced that it was following a two stage process in finding a suitable
Chief Executive and permanent Finance Director for the Company; the first is to
establish each individual's suitability and availability for the role, the
second is to provide the most suitable candidates with further information on
the Company in order for them to formulate a strategy for the Company.

This process produced a shortlist of three candidates for the Chief Executive
role, each of whom the Board considered had skills and the support of a team to
implement a strategy to manage the Company out of its current situation and to
recover shareholder value.

Following further discussions with all candidates, the Board has concluded that
Simon Beart, together with William Good and Rodney Mann, present the most
compelling alternative for the Company. Biographies of Mr Beart, Mr Good and Mr
Mann are set out below:

Simon Delaval Beart ACA

Simon Beart qualified as a Chartered Accountant with PricewaterhouseCoopers in
1984.  In 1992, he co-founded the international packaging group Britton Group
plc, which was listed on the Official List and was subsequently acquired by a
listed US corporation in 1998 for #250 million.

He was appointed deputy chairman and group finance director of XKO Group plc in
1999 and chief executive officer in late 2000. XKO Group plc was a software and
maintenance service business.  Following the downturn in the software sector in
2000, Simon successfully turned round and rebuilt XKO Group plc, and following
the sale of most of its software and maintenance service assets, developed it
into a focused utilities services business (subsequently renamed Revenue
Assurance Services plc).  The enlarged group was sold to Spice plc for #110m in
October 2007.

Simon is also a director of The Throgmorton Trust, an investment trust listed on
the Official List which specialises in small and mid cap growth companies.

Thomas William Good ACMA

William Good qualified as a management accountant in 1991.   From 1996 to 2000
he was group financial accountant of Card Clear plc.   In 2000, he became group
finance director of Retail Decisions plc, a fully listed software and services
group, following its demerger from Card Clear plc.

He was appointed group finance director of XKO Group plc (subsequently renamed
Revenue Assurance Services plc) in early 2004 and worked with the chief
executive officer, Simon Beart, to rebuild and refocus the group.  The group was
successfully sold in October 2007 to Spice plc for #110m.

Ian Rodney Mann

Rodney Mann worked at Grand Metropolitan between 1965 and 1995 where he held
positions as managing director of the Norwich Brewery (1982 to 1985), the Ushers
Brewery (1985 to 1989) and Inntrepreneur and Tenanted Estates (1991 to 1993).
Between 1995 and 1998, he was a non-executive director of Shepard Neame Limited
and he was non-executive chairman of Avebury Group plc.

Mr Mann joined XKO Group plc as a director in 1999 and became non executive
chairman in 2005.

The Board is extremely conscious that the recent stock exchange announcements
and the requisitioning of the General Meeting have created concern and
uncertainty for its stakeholders.  Therefore, in the long-term interests of the
Group, the Board is in discussions with Mr Beart and his team to effect an
orderly hand over of the management of the Company, whereupon Mr Beart, Mr Good
and Mr Mann will be appointed, respectively, to the positions of Chief
Executive, Finance Director and Deputy Chairman of the Company.  This process
has now commenced and all parties are working towards Mr Beart, Mr Good and Mr
Mann being appointed to their roles ahead of the General Meeting.  At that time,
I would revert to my former role as Non Executive Chairman of the Company to
ensure continuity during the early stages of the new team's tenure.

Upon the appointment of Messrs Beart, Good and Mann as directors of the Company,
Stephen Mulligan, David Levis and Christopher Neilson will resign as directors
of the Company with immediate effect.

Conclusion

The Board expects the orderly hand over of the management of the Company to Mr
Beart and his team referred to above to be completed ahead of the General
Meeting.  In these circumstances and as stated above, Mr Beart and his team
would be appointed as directors, and Messrs, Levis, Mulligan and Neilson would
resign.  Alastair Stoddart would remain on the Board as Non Executive Chairman.

In order to satisfy the provisions of the Companies Act 2006, the General
Meeting will take place despite the Board's intention to appoint Mr Beart and
his team to the Board.  In light of this, the Board draws particular attention
to the recommendation section set out below and urges Shareholders to vote in
accordance with its recommendations.

Recommendation

Following a thorough review of the business and the options available to the
Company, the Board believes that 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.  In Messrs Beart, Good and Mann the Board believes it has
the team capable of bringing stability to the business and, thereafter, of
building a business capable of taking advantage of these opportunities and
rebuilding Shareholder value.

Accordingly, your Board unanimously recommends that you:

1.       vote in favour of resolutions 6, 7 and 8 to appoint Simon Beart,
William Good and Rodney Mann as directors of the Company as they have undertaken
to do in respect of their own beneficial shareholdings and interests of their
families, amounting to, in aggregate, 2,146,071 Ordinary Shares, representing
2.38 per cent. of the Ordinary Shares;

2.       vote against resolution 1 to remove Alastair Stoddart from the office
of director of the Company as they have undertaken to do in respect of their own
beneficial shareholdings and interests of their families, amounting to, in
aggregate, 2,146,071 Ordinary Shares, representing 2.38 per cent. of the
Ordinary Shares.

In the event that, as expected, Simon Beart, Rodney Mann and William Good are
appointed as directors prior to the General Meeting, the Board would not intend
to put Resolutions 6, 7 and 8 to the meeting.  The Board also expects that prior
to the General Meeting, Messrs Levis, Mulligan and Neilson will resign as
directors of the Company.  In the event that such resignations have taken place
prior to the General Meeting, the resolutions relating to their removal will not
be put to the General Meeting.

To the extent that the Resolutions are put to the meeting, the Board have
undertaken to vote in accordance with their recommendations above in respect of
their own beneficial shareholdings, amounting to, in aggregate, 2,146,071
Ordinary Shares, representing 2.38 per cent. of the Ordinary Shares.

The Board confirms that Mark Worthington has undertaken to vote in accordance
with the Board's recommendations in respect of his 7,445,500 Ordinary Shares,
representing 8.25 per cent. of the voting rights of the Company.

 Simon Beart, the proposed Chief Executive, said:

"The new team is very pleased to have reached agreement with the Board and we
look forward to re-building shareholder value as soon as possible.  Worthington
Nicholls is in a very attractive industry and we remain convinced that with the
right processes and controls, there is a great opportunity for shareholders".

Alastair Stoddart, Chairman, added:

"I am delighted that we have been able to resolve the process of identifying a
suitable Chief Executive and permanent Finance Director for the Company and that
we have found such strong candidates. As a team we will now be able to move
forward together and in the best interests of all our stakeholders."


Enquiries, please contact:

Worthington Nicholls Group                        0870 609 1829
Alastair Stoddart, Chairman
Chris Neilson, Finance Director

Smithfield Consultants                            020 7360 4900
Reg Hoare / Will Henderson

Blue Oar Securities                               020 7448 4400
Rhod Cruwys / Romil Patel



                                        DEFINITIONS

"Circular"                              the document dated 8 November 2007, addressed to the
                                        Shareholders

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

"Directors" or "Board"                  the directors of the Company at the date of this
                                        announcement

"Ordinary Shares"                       the 90,203,976 Ordinary Shares in issue on the date of
                                        this document

"General Meeting"                       the general meeting of the Company convened for 10:00am
                                        on 6 December 2007, (notice of which was sent to
                                        Shareholders on 8 November 2007) and any adjournment
                                        thereof

"Group"                                 the Company and its subsidiary undertakings at the date
                                        of this announcement

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

"Resolutions"                           the resolutions set out in the notice of General Meeting
                                        as sent to Shareholders 8 November 2007

"Requisitioning Group"                  certain shareholders, whom on 24 October 2007,
                                        requisitioned a general meeting of the Company to
                                        consider the Resolutions

"Shareholders"                          holders of Ordinary Shares

"UK"                                    the United Kingdom of Great Britain and Northern Ireland




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

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