One of the UK’s leading air conditioning installers has been forced to pull
out of the AIM index, as the fallout from a revenue recognition scandal
Earlier this year, Worthington Nicholls was forced to ring in the changes as
a result of its woes a move that eventually claimed the scalps of FD Tim Hunt
and chief executive Mark Worthington.
In September, Worthington Nicholls’ audit committee hired KPMG to undertake a
review of its accounting practices, advising shareholders in October that it
would face an asset write-down of £6.5m.
Worthington Nicholls said previously: ‘The majority of this amount relates to
accounting calculations that had the effect of advancing the recognition of
income. These accounting practices have now ceased, which should provide
management and shareholders with greater clarity as regards the financial
performance of the company in the future.’
Despite the company’s optimism, the troubled builder has now had to cease the
trading of its shares on the alternative investment market.
After only being appointed in January, Hunt was edged out on 19 September
when the board decided his focus should be on the ‘financial operational
aspects’ of the business as head of finance. Chris Neilson took over as stopgap
FD and was tasked with overseeing a financial review by KPMG.
On 24 October 2007, the board announced it had received a notice from an
activist group of shareholders demanding that the board be strengthened.
At the end of November, interim FD Christopher Neilson was replaced by Thomas
Good, and chartered accountant Simon Beart was named chief executive.
The company has indicated that it will make a further announcement on the
issues later this week.
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