Worthington results drop £5m after accounting errors
Accounting errors have wiped £5m off the full-year results of household goods and textiles manufacturer Worthington.
The group, which works with Marks & Spencer’s suppliers, was forced to revise its profit-and-loss account to show a pre-tax loss of £6.91m compared to a profit of £2.71m the previous year. Finance director Gavin Kaye said the move followed publication of a trading statement in February which prompted a widespread internal investigation.
Examination of the group’s assets revealed two ‘fundamental errors’ in the accounts. The first related to a difference in the bank reconciliation with the debtor ledgers. The second was a correction of an inappropriate basis of absorption of overheads into stock, which produced an incorrect valuation.
These errors, along with a change in Worthington’s accounting policy for design and development costs, amounted to £5.03m.
The period was a ‘very difficult trading year’, the company said, with a setback in retail trade in the second half of the year causing ‘severe disruption’, which affected the group’s performance.
Exceptional write-offs and provisions totalled £5.4m compared to an estimate of some £4m.
As part of the group’s de-gearing plan, it will dispose of some operating subsidiaries, creating a smaller group operating in niche markets.
Worthington has also relocated its headquarters from London to West Yorkshire to save around £500,000 a year.