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.

GF agree longterm prospects of wng look good but was of the opinion that a downward correction was taking place- hence my bailing out shortterm. No doubt i will be back once i feel corner has turned

Good on you Robin.

Nevertheless. A bit odd to see the valuation now down by 30%.
The extra 20 mill they had to raise lately seems to have undermined confidence.
Fundamentals still hold good, imo, but the sp drop comes as a bit of a surprise.

Didn't think i'd see these down at this level again ,,are we having a bit of a market wobble ?? ,,i may look at a re buy here.

Ive been thinking the same Jimmy.

138p to buy and analysts and tipsters have a short term target of between 200p and 225p.

Problem is with the US having a few jitters it could drop a little further but underlying value, a forward P/E of 17 to sept 2008 makes it look cheap at this moment in time.

What's the EPS growth, gf, i.e. PEG?

PE based on current year forecast is 25.5 , growth next year forecast at about 60% .

Heads these tails BPRG

:-)

the SP has at last dropped to my chosen entry point so I am in this morning. A touch tardy, but in anyway.
Alan

Big Al,

if you go on concensus broker forecasts the figures are as follows..

to 30/sept/ 2007 EPS 5.79p P/E 23 PEG 0.3 EPS growth 79%

to 30/sept/2008 EPS 8.33p P/E 16 PEG 0.4 EPS growth 44%

ROCE 32.7%.

The figure I used yesterday was my own spreadsheet forecast and being a cagey devil I have some very conservative margins employed.

On fundies this one is looking rather cheap again.

Forgot to mention Money Week tipped it last friday...

"In January, it secured its first continental European hotel contract and in April confirmed that current trading was strong.In the year to September 2007, house broker BlueOar is looking for adjusted earnings per share of 5.8p, rising 57% to 9.1p in 2008 leaving WNG.L on a prospective p/e ratio of 18.2. Worthington Nicholls is a medium term buy at 165.75p."

I am very happy to be in at this price, GF.
Just ticked off I missed it at the begining due to a lack of liquidity on my part.
Confident of 30%+ from here. Anything more is a bonus.

Id still be a little wary of sentiment in the market place as a whole h6.

As like hyleo mentioned yesterday we may not be out of the woods just yet and he was right about that on his post although I have to say this time I couldnt agree with his TA perspective on this stock.

Im just hoping we have got the timing right.

Gotta say I am not known for my short term timing!!!
But I am a medium - long term investor and I usually look to get in somewhere near the bottom, get my cash back out at a perceived high, and leave a rump of free shares.
You are right, short term could see a lower SP, but I am looking at a longer trek than that and feel happy that the plan will work.
Famous last words.
Alan

Thanks guys. I do like PEGs. ;-))

I've kept my eye on this lot for a wee while and have been awaiting a pullback to consider whether it was worth an entry.

It's moved up the pecking order somewhat. ;-))

Goldfinger, I think we are not out of the woods yet given the situation in USA...we are in for a rocky ride tomorrow. Hang on tight.

I appear to have taken a position first thing this morning so we'll see how it goes. Nice early pullback to enter too. ;-))

I got 139p Thusday ... what you get cheapskate ?

138.5.

;-))))

Turned positive.