2014-08-29 13:57:01 -
Interim Financial Statements for six months ended 31st March 2014
Chief Executive’s Statement
I am pleased to be able to say that in the period covered by this Interim Report and Accounts the Company has made considerable steps forward. The key highlights are.
We are acquiring substantial assets in a diverse portfolio of industry sectors in the UK and world-wide.
New investments - we are in advanced discussions with partners in the energy, mining and media sectors and expect to make a number of announcements very soon which will add to revenues in the next six months.
Oil and gas – we are close to completing a major oil and gas investment and expect to be able to announce details before the end of September.
- at the time of writing we have reached agreement in principle to acquire a significant interest in an exploration company with exciting prospects in the rare earth sector. We expect to be in a position to make an announcement in relation to this transaction with the next seven days.
Media – we have reached broad agreement in principle to acquire a portfolio of media businesses and negotiations are expected to be completed shortly.
Litigation funding – we have broadened our legal claims portfolio so that claims in our litigation division now include both UK claims and also international claims with a total claims value of more than £30m.
We expect to be able to update shareholders in relation to our claims portfolio shortly.
As a result of these efforts, I am able to announce first half profits of £8.7m
Interim profits for half year ended 31 st March 2014 of £8.7m against a loss in 2012/13 of £5.3m
That has lead us to be able to strengthen our Balance Sheet
Our net asset position is now £5.9m as at 31 st March 2014 up from -£3.5m for the 18 month period ended 30 th September 2013.
Pension fund resolution is also imminent
It has been our priority to both reach a fair settlement for the pension fund recipients whilst capping our liabilities. I am very pleased to say we have found a solution to the deficit that balances both needs. The solution proposed is expected to have a positive effect on the Group’s balance sheet but is not yet reflected in our accounts. More details will be announced shortly.
On 16 th April 2013, the Company acquired 26% of the shares in Law Financial Ltd in exchange for £250,000 of Unsecured Convertible Loan stock 2020, with an option to acquire the remaining 74% of the shares by 31 st October 2013. This option was exercised on 28 th October 2013 and the remaining shares were acquired in exchange for £750,000 of Unsecured Convertible Loan Stock 2020. The Unsecured Loan Stock 2020 includes warrants to subscribe for 20m ordinary shares in the Company at an exercise price of 5p each, subject to a share capital re-organisation being approved by shareholders.
On 4 th March 2014, in order to fund corporate finance activities, the Company issued £130,570 of Unsecured Convertible Loan Stock 2021 which was subsequently converted into 1,305,700 ordinary 10p shares in the Company on 21 st March 2014 at a conversion price of 10p per Worthington share.
On 14 th April 2014, the Company issued £302,400 and £24,000 of the unissued Secured Convertible Loan Stock 2019 to European and Asian Ltd (the holding company of Mandolyn Ltd of which Doug Ware is a director) and Richard Spurway, a director, respectively. The consideration for the issue was the cancellation of the remaining notice period on their respective contracts. This was in order to secure the remaining monies due to the respective parties in accordance with their contracts should their roles be terminated and/or their contracts not be honoured for any reason. They have agreed to surrender all the loan stock for nil consideration once an agreement is reached with the Pension Trustee, the Pension Regulator and the PPF. This would enable the re-structuring of the Company with the scheme being transferred into the PPF.
In May 2014, contracts were exchanged for the sale of our Keighley freehold property for £475,000, completion of the sale is due before the end of September 2014.
In July 2014 the Company sold its shares in Trimmings for £1 and accepted the sum of £399,999 in settlement of the unsecured loan stock which was not due for repayment by Trimmings until 31 December 2200.
Interest will be paid up to 30 June 2014 on the loan notes in addition to the receipt of a final management charge of £71,750 plus VAT. The directors believe that the realisation of cash from this historic investment is in the best interests of the Company. Accordingly a provision against the carrying value of the investment of £237,000 has been made together with a provision for the write down in the value of the loan notes of £400,001 following the sale agreement.
Finally, in presenting this interim report I am delighted to be able to inform shareholders that the Company is in good shape, going forward into the coming months with a clear strategy and a secure footing. I appreciate that for many of you this moment has been long awaited and I’d like to thank all our stakeholders for remaining loyal to us during this period when, at times, it must have appeared as though not much was happening. With rising economic confidence in the UK and many opportunities for us both here at home and internationally I believe we have an excellent future ahead of us.
Doug Ware Chief Executive 20 August 2014
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