WSE Work Service S.a.

Western Selection P.L.C.

Preliminary announcement of unaudited results for the year ended 30^th June 2015

Western’s objective is to generate growth in value for shareholders over the medium to long term and pay a progressive dividend. 

Our business model is to take sizeable minority stakes in relatively small companies, usually immediately before or as their shares come to market, and have directors in common through which we can provide advice and support for these growing companies.  These may or may not become associated companies.  The aim is that these Core Holdings will grow to a stage at which our support is no longer required and our stake can then be sold over time into the market. 

Companies that are targeted as Core Holdings will have an experienced management team, a credible business model and also good prospects for growth.  Core Holdings may be in any sector where management feels it has specific competence.

Our objective is not to build a diversified portfolio, but to identify a limited number of good opportunities for growth in value.  This may well see risk concentrated even further than it has previously been.

To acquire these stakes in new core investment holdings, we need to be able to react quickly, and therefore to have readily available funds to invest.  To achieve this we will maintain a Treasury Operation consisting of a mix of cash, debt facilities and liquid investments.

Results for the year

The Company’s profit for the year before exceptional items was £159,000 (2014 - £202,000).  During the year Mr D. C. Marshall stepped down as a director of Creston. Western subsequently sold its investment in Creston plc for £4,040,000, realising an exceptional gain of £2,615,000.  After this exceptional item our profit for the year was £2,774,000 compared to a profit last year after exceptional items of £803,000.

Dividend income from Core Holdings has increased slightly to £238,000 from £229,000 last year.  Dividend income from Treasury Operations decreased slightly from £97,000 last year to £85,000.  Administrative expenses have increased by 3% reflecting the full year impact of last year’s increase in directors’ fees.

Shareholders’ funds per share have fallen substantially from 102p to 75p primarily due to the fall in value of our investment in Northbridge Industrial Services plc.  We continue to believe in the long term prospects for Northbridge Industrial Services plc.

Dividend

The Company paid an interim dividend of 1.05p per share on 27^th March 2015.

A final dividend of 1.05p per share is proposed, making 2.1p for the year, compared to 2.0p for 2014.  The dividend will be paid on 4^th December 2015 to shareholders on the register at the close of business on 20^th November 2015.

Core Holdings

Northbridge Industrial Services plc (“Northbridge”)

Northbridge hires and sells specialist industrial equipment to a global customer base.  It has offices or agents in the U.K., U.S.A., Dubai, Germany, Belgium, France, Australia, Singapore, India, Brazil, Korea and Azerbaijan.  Customers include utility companies, the oil and gas sector, shipping, construction and the public sector. The product range includes loadbanks, transformers, generators, compressors, loadcells and oil tools.  Further information about Northbridge is available on their website: www.northbridgegroup.co.uk.

Northbridge will announce its unaudited interim profits after tax for the six months ended 30^th June 2015 on 30^th September 2015.

Western acquired a further 25,000 Northbridge shares on 2 June 2015 for £52,000 bringing its holding to 1,900,000 shares.  Western’s holding is 10.2% of Northbridge’s issued share capital.  The value of this investment at 30^th June 2015 was £3,895,000 (2014 - £9,750,000) being 29% (2014 - 53%) of Western’s net assets.

Mr D. C. Marshall is a non-executive director of Northbridge.

Swallowfield plc (“Swallowfield”)

Swallowfield is a market leader in the development, formulation, manufacture and supply of cosmetics, toiletries and related household products for global brands and retailers operating in the cosmetics, personal care and household goods market. Further information about Swallowfield is available on their website: www.swallowfield.com.

Swallowfield announced its annual results to 30^th June 2015 on 22^nd September 2015 and recorded a profit after tax of £746,000 compared to a profit of £157,000 for the comparable period last year.  No dividends were received from Swallowfield during the year (2014 – nil).  Profits are expected to recover further in the current year and dividends are expected to be resumed shortly.

At the reporting date, Western owned 1,869,149 shares which is 16.5% of Swallowfield’s issued share capital.  The market value of this investment on 30^th June 2015 had increased by 11% to £2,019,000 from the value at June 2014 of £1,813,000. This is 15% (2014 - 10%) of Western’s net assets.

Mr E. J. Beale is a non-executive director of Swallowfield.

Bilby Plc (“Bilby”)

In July 2015 we invested £1,500,000 in acquiring 1,875,000 shares in Bilby which is 5.5% of their issued share capital. 

Bilby is an established, and award winning, provider of gas installation, maintenance and general building services to local authority and housing associations across London and South East England.  They have a strategy of growing organically and by acquisition.  Further information about Bilby is available on their website: www.bilbyplc.com.

Bilby announced its results for the 14 month period to 31st March 2015 on 23^rd June 2015 showing a profit after tax of £1,552,000.  It has announced a dividend of 2.32p per share payable in August which will provide us with income of £43,500.

Hartim Limited (“Hartim”)

Hartim is the unquoted holding company for Tudor Rose International Limited (“TRI”) which was founded in 1984.  It works closely with a number of leading UK branded fast moving consumer goods companies, offering a complete sales, marketing and logistical service.  Based in Stroud, Gloucestershire, TRI sells into 78 countries worldwide including USA, Spain, Portugal, Italy, Czech Republic, Russia, Turkey, South Africa, Saudi Arabia, UAE, Malaysia, Australia and China. 

Western holds 49.5% of Hartim, which has a 31st December year end, and which generated trading profits before tax in the year to 30th June 2015 of £68,000.  Turnover in the period was £18,022,000 (2014 - £20,448,000).  Western’s share of a loss after tax, including a charge for disallowed tax losses, for the twelve months to 30th June 2015 was £5,000 (2014 –profit of £382,000, after exceptional profit on former Australian subsidiary of £337,000) and the book value of the investment at 30th June 2015 was £1,223,000 (2014 - £1,228,000) being 9% (2014 - 7%) of Western’s assets.

Western has two nominees on the Board of Hartim: Mr E. J. Beale and Mr L. H. Marshall (a director of City Group P.L.C., Western’s company secretary).

Industrial & Commercial Holdings PLC (“ICH”)

ICH is a small unquoted PLC in which Western holds a 29.9% interest.  It owns land with potential for residential planning permission at Milngavie, adjacent to Dougalston golf course, just north east of Glasgow.  ICH is currently making representations for its land to be included in the local authority’s next five year plan, but it may take some time for permission to be received.  Mr D. C. Marshall and Mr J. M. Robotham are directors of ICH.

City Group P.L.C.

Western holds 48.6% and London Finance & Investment Group P.L.C. (Western’s largest shareholder) holds 51.4% of City Group P.L.C., which provides head office and company secretarial services to both these and

other companies.  City Group P.L.C. acts as a shared cost centre for related party clients and sells surplus time to unrelated clients. Mr E. J. Beale is Chief Executive of City Group P.L.C. and Mr D.C. Marshall and Mr J.M. Robotham are directors of City Group P.L.C.

Treasury Operations

Treasury operations comprise bank borrowing facilities of £1,500,000 and liquid investments. At the year end we held cash balances of £3,889,000 (2014 – nil) and liquid investments valued at £2,450,000 (2014 - £2,910,000).  We had no debt at 30th June 2015 (2014 - £590,000).  Since the year end cash balances have reduced by £1,500,000 due to the investment in Bilby.

Outlook

The outlook for the global equity markets uncertain.  In the short term our shareholders funds per share will continue to remain volatile reflecting movements in the market and the non-liquidity of its Core Holdings.  We are invested in sensible businesses whose value we expect will shine through in the medium to long term, despite any short term hiccups.

D.C. Marshall
Chairman

Unaudited Statement of Comprehensive Income

Unaudited Statement of Changes in Equity

Unaudited Statement of Financial Position

Unaudited Statement of Cash Flow

Note (a)           Analysis of cash and cash equivalents

Notes:-

Copies of this notification are held at the Company’s office, 6 Middle Street, London, EC1A 7JA (tel. 020 7796 9060) and are available for a period of 14 days from the date of this announcement.

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