Watch out for this one floating in the next few days, it could turn out to be the float of the year. Theres not much available on the company yet but I have found the write up below which shows the fantastic potential of this one. Note just how cheap it is.

New Issue: here's one that's more than hot air

Published: 12:45 Monday 27 February 2006
By Cliff Feltham, Companies Correspondent

Owners of thousands of buildings in the UK are facing massive bills over the next few years to comply with new energy standards, which is good news for new AIM entrant Worthington Nicholls.

Air conditioning and ventilation units using ozone depletive gases have to be replaced by systems using more environmentally friendly gases.

The measures are creating a windfall for air conditioning installation companies like Manchester-based Worthington Nicholls which is to float on AIM with a price tag close to 35 million.

The firm, which has been around since the early 1970s, needs extra working capital to cope with the influx of orders which will see this year's turnover climb from 11.7 million to nearly 30 million.

The flotation, sponsored by broker Corporate Synergy, will also allow founder chairman Peter Worthington, who is nearing his 70th birthday, to sell shares worth around 7 million.

After years of steady progress, the firm has seen a huge jump in work triggered by new energy efficient legislation flowing from the Kyoto Agreement.

The deadline for owners of buildings to replace air conditioning, heating, ventilation and chilled water systems using banned gases is the end of 2009.

Chief executive Mark Worthington, son of John, believes there are at least 9,000 buildings in the UK which will have to comply with the new regulations. But the figure could be much higher. ' We are talking billions of pounds here,' he says.

Worthington Nicholls has concentrated on servicing hotel and retail clients which include Hilton, Holiday Inns, Debenhams, Arcadia and Boots.

A new, energy compliant air conditioning plant in a high street store can cost anywhere between 80,000 and 120,000. Re-fitting a Debenhams branch cost 670,000 while hotels can expect to pay around 3,500 a room for a new air conditioning unit.

Worthington Nicholls offers a complete service, designing the system, managing installation and providing regular maintenance. At present income from maintenance contracts is running at around 20% of total sales but that is expected to rise.

The flotation, which is raising a total of 15 million, will also provide a warchest for acquisitions. Two deals have already been lined up with will add another 20 million a year to turnover.

Mark Worthington says there is huge scope for acquisitions. The company claims to be market leader yet it only has a 3% share suggesting plenty of room for consolidation.

The company is making some confident assumptions about future growth. Profits are expected to rise from 3.7 million last year to 8.6 million in the current year to September. By 2008 it is projecting earnings of 12.6 million on sales of 45 million but this does not take into account any contribution from future acquisitions.

Says Worthington: 'Stringent environmental legislation has changed our business. Now the large international hotel and restaurant groups prefer to deal with a single supplier. We believe there is huge scope for expanding not just in the UK but across Europe.'

Price of the shares being placed will be fixed over the new few weeks following investor presentations with dealings due to start in about a month's time.

Please DYOR and do not use money on shares you cannot afford to lose.

cheers GF.

Yes a long termer.

Results this morning ,very much as expected ..

Results slightly better than expected.

First of all lets get this one off out of the way which some may not understand...

1. The exceptional item above of 1,498,000 relates to 1,112,000 for tax
payable on the gifting of shares to employees during the year and 386,000
for directors bonuses pre-reorganisation.

Obviously this affects earnings per share but is a one off, on business pre float.

- Revenues and profit in line with Broker forecasts in fact pre tax profit just above forecasts.

- New business going forward looks positive with tenders for 67 million of new business in place.

- A dividend to be paid which wasnt expected of 0.4p per share 30/3/ 2007.

- Acquisitions on the cards imminent.

Here were the broker forecasts.......

Results for the year to September are slated for publication this month and analysts are looking for adjusted pre-tax profits of 3.6m from 25m sales, giving 4.6p of earnings.


Conclusion......

Thatl do me and I look forward to expansion in Europe and also more earnings enhancing acquisitions as the year goes forward.

rush of sell orders and the price drops - not totally unexpected as results in line - dividend unexpected but not sensational and MM's sensitive to stock situation. Just topped up with 5k @1.16 - interesting next 6 months me thinks. Should be generating good income at thisi time of the year.

AM

Wasn't in. Now am, lovely post results buying opportunity.

all the best

capa

Bounce baby back to 120 / 117 buyers return - a good opportunity

great more buys than sells now 121.50 buy

Ive been in twice and added.

I think some were expecting a bolt on to be confirmed as a bonus.

Looks like a few speculators out which isnt a bad thing for long term investors.

I half expected a drop ,, now its steady as she goes . :-)

Been watching these for a while, now bought a few on the drop for my sipp. Thanks for the research GF.

Cheers SC.

Its a case of waiting here for the next news.

A new bolt on isnt far off, then we can look at the future earnings and look at how we are positioned value wise.

There is no doubt that new would be buyers will be questioning the forward earnings, and yes they are correct to do so.

The fact is though that you are paying for quality here just like you do when you go out to the supermarket.

Do you go for BEST BUY or do you go for Marks And Spencer, my answer would be easily be the latter.

Future earnings and quality warrant a hold, just keep patient and you will be rewarded.

Just recd this e-mail (many thanks wayne)..

from RHPS tip sheet this evening...

WORTHINGTON NICHOLLS (WNG): Worthington Nicholls, which
is now valued at around 78m, made a pre-tax profit of
2m in the year to September 2006, on turnover of 25m.
With some benefit from acquisitions, it is expected to
make 6.2m pre-tax on turnover of 37.5m this year, on
which basis the shares trade on a PE ratio of 21. This
is high, but very well justified by WNG's outstanding
growth prospects. To remind you, these are essentially
driven by two things. Firstly, EU legislation that, for
environmental reasons, requires all air conditioning
systems to be replaced by the end of 2014. And secondly
because hotel owners in particular now regard air
conditioning as essential.

In fact, from January 1st this year the owners of
buildings are being asked by government to provide an
inventory of their air conditioning system, and annual
reports describing actions taken to comply with the new
legislation. This is focusing their minds on the matter,
and to further persuade them to do something about it,
manufacturers of the outlawed R22 refrigerant gas must
stop producing it by the end of 2009, and makers of air
conditioning equipment have stopped making spare parts
for old systems.

So far as hotel owners are concerned, the new owner of
the Travelodge chain has vowed to install air
conditioning in its 20,000 bedrooms. And Premier Travel
Inns, which had to pay refunds to customers who
complained of sweltering in last summer's heat, is also
likely to install air conditioning in its 31,000 rooms.

Worthington Nicholls has far more experience of
installing air conditioning in hotels than any of its
rivals, unlike whom it does not act as a sub-contractor
but has a direct relationship with the hotel owners. So
it is very well placed to pick up more business within
the UK, and also in Europe where the same regulatory and
other demand drivers apply. And at 2,000 per room some
of these contracts could be very significant indeed.

The main problem for Worthington Nicholls is simply how
to take advantage of this vast opportunity. Apart from
buying resources through acquisition and nurturing them
through its own apprenticeship scheme, it is attracting
air conditioning engineers who would rather work, and
stay, in a hotel with all meals provided than be
employed on a building site.

Although the shares have run into some profit-taking
this is a very strong story that is still in its early
chapters. I am going to set a new twelve month target of
200p, so up to a new limit of 130p, BUY. ENDS.

Good news then lads and I feel a lot will be adjusting upwards.

Thanks for posting that GF .

yes excellent spot GF - thanks

Blimey just luck at the volume of buys but the MMs mark it down........ ludicrous.

Nice to see the MMs are playing ball again.

I hope the sell on results brigade have found somewhere better to place their money, I am grateful to them for allowing me to get in yesterday at 1.17 and already showing a profit ;-)

capa

Glad to have you in Capa,

Nice one.

From across the road....

Tipped as BUY in Moneyweek today

keybox - 19 Jan'07 - 22:32 - 817 of 817


Also tipped in Aim & OFEX newsletter
As expected, Worthington has delivered on expectations. The group is confident that the market for installation of air conditioners will remain buoyant. It has recorded 60% growth in the hotel sector and with retailers enjoying a strong Christmas, Worthington is confident that orders from retailers are likely to rise as well. The company is currently looking at three acquisitions and expects to announce news over the next few quarters. Worthington hinted that there could be two potentially large contracts that could change earnings estimates for the current year significantly. Given that over 70% of its turnover for the current year has already been secured, we expect that in the year to September 2007, Worthington will announce profits of 6.2 million and earnings of 6.1p. The following year, earnings are forecast to increase to 7.5p. We tipped the shares at 62p, the stock currently trades at 118.5p. Worthington trades on a 2008 PE of 15. However, this does not discount the potential from acquisitions and the larger contract wins yet to be announced which may well lead us to increase forecasts significantly. Our stance remains unchanged. BUY.