Trading Statement
March 30 2010 - 5:09AM
UK Regulatory
TIDMGAR
30 March 2010
Garner plc
("Garner" or the "Company")
Trading Update
A board meeting was held today at which the directors of the Company carefully
considered the financial position and prospects of BNB Recruitment Consultancy
Limited ("BNBRC"), a 100 per cent owned subsidiary of the Company and one of
the three companies acquired from BNB Recruitment Solutions plc in December
2008. BNBRC has net current liabilities of approximately GBP1.6m including GBP
879,000 owed to HMRC and GBP742,000 owed to other Garner group companies. It was
agreed that there is no realistic prospect of BNBRC paying these debts and
accordingly there is no alternative but to take the necessary steps to place
the subsidiary into creditors' voluntary liquidation.
Ernst & Young LLP have been instructed to assist the board of directors with
the liquidation process. The employees of BNBRC were recently transferred to
another subsidiary of the Company as part of the plan to consolidate the
operations of the Garner group of companies. As a result, the liquidation of
BNBRC will not impact the trading operations of the Garner group of companies.
Trading within BNBRC in 2009 was worse than anticipated, with the downturn in
the economy together with the costs of terminating contracts and restructuring
the business resulting in this subsidiary suffering heavy losses. However, the
Garner group of companies has made a promising start to 2010 and unaudited
consolidated management accounts show that the Company traded profitably at the
pre-tax level in the first quarter of the year.
The Company has also been in discussions with the administrators to BNB
Recruitment Solutions plc (in administration), to renegotiate the original
terms of the acquisition. The Board is pleased to announce that an agreement in
principal has been reached to reduce the total consideration payable, subject
to the Company securing the necessary funding.
A further announcement will be made in due course.
ENQUIRIES:
Garner plc Tel: 020 7629 8822
Andrew Garner/Ben Felton
Merchant John East Securities Limited Tel: 020 7628 2200
John East/Simon Clements
END
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