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.

The original statement was either misleading on purpose or the Finance director is in competent , take your pick.

Either way it stinks.

And the other directors helped them selfs to a load of cheap shares on the back of this !

this thread is beginning to sound like the seo one!

The institutions that bought into the May placing at 170p must have been impressed to see directors buying at 111p at the end of June!

A bit of luck, being in the right place at the right time !

And the other directors helped them selfs to a load of cheap shares on the back of this !

Good point flipper........

I sold most of my holding just as the sp began to slide but, like GF, still have a rump of "free" WNG shares. Let's hope this is just a short-term corporate blip and that normal (upward) service will be resumed shortly. That doesn't make it any more palatable though, and I agree there may well be more to this episode than meets the eye. And is it my imagination or are these sort of cock-ups happening more often these days?

panlj
what more to this episode than meets the eye do you think may be happening.in your view.

Nothing concrete, micky. But with the bigwigs hoovering up all those cheap shares after the initial, disappointing statement and before the rosier, sp-boosting one, it does make you wonder... I guess I'm just fed up with the slapdash stewardship of some of the firms I've invested in recently. There's only so much research you can do - you just can't legislate for incompetence (or worse), can you?

There appears to be some sort of business model followed by some companies floating on AIM whereby they use floatation funds raised to buy up smaller companies in fragmented business sectors. Often companies bought are grossly overvalued and the buyer ends up with large amounts of intangible assets on their balance sheet, then they discover that the orders or contracts in the books of the company acquired do not materalise or sales forecasts have been overestimated. Next stage is change in the directorate, shortly to be followed by the inevitable profit warning(s).

You're right there, Halifax. The secret is to bail out before the inevitable happens! As you pointed out, SMC adopted an even more ambitious approach than WNG - with catastrophic results.
It's an infuriating fact that, though we can crunch the numbers and come up with forecasts etc to back our investment choices, at some point, you also have to rely on the judgement of those appointed to run things. Unfortunately, as we've seen to our cost here and elsewhere, many of them simply aren't up to it.

It appears to be the case paul.

I cannot believe the news we were given today.

The RNS should have been checked by both the CEO and the finance director before it was sent for publication.

Ill leave others to debate why this didnt happen.

MR Worthington
It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently."

Good point Mickey.

Wasnt it Buffet Warren who coined that one?.

yes your right G/F and he no nothing...........,-))

If I were a gambling man in general, which I am not only holding , as I do, just two highly speculative stocks in a portfolio of now 27 I would be be tempted to conclude that it would be the better option to cut my losses and sell Worthington Nicholls.

The whole thing does not really look that rosey right now.


At one time just after the highly the disappointing interims, it did appear to me that the fall was way over done right down to 111p as it was- Also given that the brokers were still fully behind their previous forecasts.

So I decided to sit back and watch a while. Ever ready for a bottom fishing opportunity as I am.

But during that time things has manifestly altered significantly despite Director's buying, which should now be seen as a quick fix proping up exercise.

Now we have Broker Panmure Gordon cutting its forecasts by 11%, and the projected SP down to 175p. and that now looks highly suspect and even more so without a major influx of solid new orders.

I am all for trusting that the new chairman can get to grips with things in a company that perhaps has undoubtedly seen a rapid expansion---maybe too much so and perhaps in doing so lost both its way and managerial control----its only time that will tell now---and sadly I woiuld not be prepared to sit and wait to find out at these current levels.

80p has a nice soild sounder ring to it right now, especailly as the SP went below a 100p The other question is obviously has the management has lost credibility as there was no hint of any interim disappointments. If they have indeed lost it, the market will be a hard scoulder and so I would not like to forecast a bottom under such circumstances

But I will keep watching-

However, the directors themselves bought at 111p, so even though this might have been a manoeuvre to prop up confidence, they themselves will want to see a profit. It is likely they will have seen 111p as a good entry point.

yes but please dont forget that they conveniently overlooked 60 million ish of contracts in the pipeline, then they took 5 days to come clean with a correction.

I think they could well be saving face---clearly the jury is out on them now---the future depends on the verdict!

Pro TAer Zak Mir as just posted this on SC site...

Zak Mir



Reged: 28/06/07
Posts: 7
Re: (WNG) WORTHINGTON NICHOLLS, Float Of The Year? [Re: Tom Winnifrith]
#394282 - 05/07/07 10:23 AM Edit Reply Quote



Thank you for the "for what its worth" on WNG. The current position with the shares at 111p is that they are both well above 100p support and very oversold with a RSI of 25. There is also bullish divergence between this low and the one in June. Indeed a return to the old June support zone in teh 130p's is the most likely scenario to come.