News blog
Worthington Nicholls
- BY: Andrew Hore |
- POSTED: 01/02/2008 |
Air conditioning installer Worthington Nicholls continues to lose money.
It made an operating loss of around £1m in the three months to December 2007. It hopes to start breaking even by April. The shares dipped 0.65p to 9.35p.
New management headed by Simon Beart isn’t happy with what it found when it took over running the business. It is rationalising the business by closing trading operations and reduced the number of employees by one-third. This will lead to a cash outflow of £1m. The sale of a small subsidiary brought in £50,000.
Cash has been conserved and net cash is £8m, but there are deferred payments for acquisitions coming up. They could be as much as £3m.
The most striking thing is the lack of accounting expertise at the company both before and after it floated. The new management still feels the accounting standards across the group aren’t good enough for it to assess how the business will do next year.
Worthington Nicholls has spent £400,000 on legal costs, relating to issues of the past management of the group, and there will be more to come.
At least customers still appear to be willing to give Worthington Nicholls work. It has a good market position in the air conditioning sector and, as long as its problems don’t knock customer confidence, it should be able to return to a sounder financial footing.
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