Work Group posts negligible numbers as it seeks reverse takeover opportunity

Work Group released its final results for the year to 31 December 2016 on Wednesday, with revenue coming in at £0.008m alongside gross profit of £0.003m, compared to figures of £7.1m and £4.5m for the 2015 year, as a result of the sale of its operations at the end of 2015.

The AIM-traded firm said that since completing the sale of the group's UK trading activities and overseas subsidiaries on 31 December 2015, the directors had been managing the legacy assets and liabilities to maximise cash resources, with a view to using them to acquire a new trading business via a reverse takeover.

“Preparing the company for an RTO required the disposal or termination of property leases, the negotiation of residual supply contracts and the termination of infrastructure supply contracts together with the collection of residual debtors and payment of liabilities arising from previous trading activities,” the board explained in its statement.

“Initial cash proceeds of £1.7m were substantially reduced in dealing with these matters and the group has experienced a net outflow in excess of £1.2m over the year.”

The company had remained AIM-quoted, with a defined investing strategy as approved by shareholders at its last AGM.

A number of RTO candidate companies were examined, the board claimed, and finally in August 2016 the company entered into exclusivity arrangements, which included a cost indemnity to cover advisory fees in the event a transaction does not proceed.

“Negotiations and due diligence have been in progress since then and it is anticipated that a definitive contract can be signed shortly.”

At year-end, Work Group had net cash of £0.5m, compared to £1.7m 12 months earlier, and it reported a loss per share of 1.53p, swinging from the 2p earnings made in 2015.