Managed Support Services sues former accountants
Managed Support Services is taking legal action against the group's former advisor.
Solicitors acting for the building and maintenance services company, formerly known as Worthington Nicholls group, have file a claim against HWCA Ltd and HW Corporate Finance LLP. HWCA Ltd were the group's auditors until November 2007.
Managed Support Services said: 'The group has taken legal advice from Queen's Counsel in respect of certain matters relating to acquisitions made by the previous management team.
'As a result of that advice the Board has instructed solicitors to serve a formal claim under the protocol provisions of the Civil Procedure Rules against HWCA Ltd and HW Corporate Finance LLP. The Board has taken steps with third parties such that legal redress can be pursued vigorously but without distracting management or incurring material cost'.
MSS today announced the group was out of the red, making a pre-tax profit of £1.65m in the year to March 31 2009 on turnover of £26.3m, compared to a loss of £3.2m in the six months to March 31, 2008. The group ended the year with substantial net cash balances of £12m and no debt.
However, the group's MSS Projects division had pulled out of the ventilation business because of 'a combination of high credit risk and low net margins, in a declining market'.
The group also spent £865,000 on redundancies and closures during the year.
On May 1, 2009, the company acquired Delrac Services a London based air conditioning maintenance and service company. This business has been merged with MSS Southern.
MSS Southern will be the development platform for all of the group's activities in the South and is expected to grow.
Chief executive Simon Beart said: 'With the benefit of enlarged cash balances, the Board is now able to review a broad range of acquisitions. Potential transactions are being examined within the building services sector and in other markets where the Board’s management experience is applicable.
He added: 'It is to be hoped that in the next twelve months the scale and activity of the group can be transformed, either by a substantial transaction or by undertaking a range of smaller acquisitions in related markets offering consolidation gains'.
In relation to MSS Facilities, despite market conditions, the board 'expects this unit to grow in the current year and the service offering continues to be expanded, supported by further investment'.
MSS Interiors focuses on commercial and retail fit out for a range of retailers and hotel groups. Linked to the strength of high street spending and investment by retailers in site upgrades, the exposure of this business to the economic downturn meant costs had to be reduced substantially in the last quarter of the year.
In October 2008, the Accountancy and Actuarial Discipline Board said it was launching an investigation into the conduct of a member of HWCA Ltd, in relation to auditing of Worthington Nicholls and approval of documents for its admission to the AIM market.
In June 2008, it was announced that the Serious Fraud Office was probing events at Worthington Nicholls Group during a period from before its listing on AIM in June 2006 and up to November 2007.
On May 1, 2007, the then Worthington Nicholls announced plans for a share placing and three acquisitions, describing current trading as 'strong' but less than two months later, the company released interim results showing an operating loss of £174,000 in the six months to the end of March.
17 June 2009