By Tom Winnifrith, The Sheriff of AIM | Saturday 26 September 2015
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Hat tip to one of our readers who I know works in the small cap area and thus knows his onions for today's bit of Sherlocking on Worthington (WRN). For any Worthington investors this is yet another Red Flag 'fest. For any Rangers (RFC) fans scared that the claims of Law Financial & Craig Whyte may make against the club have any grounds, read this and LOL. Enjoy.
Worthington Group PLC subsidiary and Rangers FC Group sister company Fresh Business Thinking Ltd, (Company number 08249865) is about to be struck off having been founded by Sian James.
So what about the insolvent firm, Business Edge Network Ltd, referred to by Joint Liquidator Brian Johnson as “Business Edge Network Ltd T/A Fresh Business Thinking” (Company number 7417591) with Nick James identified as founding Director?
Allan Biggar (Director of insolvent All About Brands PLC and Equity media Partners) is still a Director, Nick James has resigned.
The last Companies House filing on 17 Jun 2015 for Business Edge Network Ltd is “Voluntary arrangement supervisor’s abstract of receipts and payments to 9 April 2015”.
In this document, Mr Johnson the Liquidator states “when the position since the inception of the Voluntary Arrangement is taken as a whole, the business [Fresh Business Thinking] appears to have just about broken even”.
It appears that between 2012 and April 2015 the Fresh Business Thinking operation only generated £113,000 in total, all paid to creditors. This falls short of the £121k projected for the 3 years to date of the Company Voluntary Arrangement (CVA) and means creditors were receiving as little as 8 pence in the pound. HMRC are the largest creditor owed over £259,000. All About Brands PLC is the second largest creditor, owed £99k, with lots of SMEs owed the balance of Fresh Business Thinking debt which totals more than £500,000.
As Fresh Business Thinking is not meeting it’s agreed financial projections this leads the liquidator to say in his report of April 2015 that “it is probable that the arrangement will need to be extended”.
So why is it that the Worthington Group PLC view is so much more positive in their RNS of September 2014 when they announce the acquisition of Fresh Business Thinking’s Great British Entrepreneur Awards and other seemingly worthless, amateur websites and publications?
Worthington CEO Doug Ware enthuses “The portfolio of media assets are expected to generate net profits of US $1.5m in 2015 having already generated US $345,000 in the six months to end of June 2014, with further substantial growth in 2016 forecast.”
The RNS continues “Upon completion of the transaction, which is subject to shareholders’ approval and the production of a prospectus, the vendors will be issued with 2.5m Worthington ordinary shares.”
If the profits are so good for Worthington PLC, why are HMRC and the other creditors of Business Edge Network Ltd T/A Fresh Business Thinking not seeing more of their debts repaid?
Perhaps it also begs the questions as to why Allan Biggar and Nick James are being gifted 2.5 million shares in Worthington Group PLC, rather than Worthington paying cash for this (apparently profitable / valuable) asset to the Creditors of Business Edge Network Ltd, which may – or may not – be the REAL Fresh Business Thinking)?
As you say Tom, this really stinks.
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