Work Group reports 2015 loss after 'struggling to survive'

“Throughout the course of 2015, we were without doubt struggling to survive and I must thank our people for their commitment and endeavours in achieving the outcome that we did,” said chairman Simon Howard.

“However, our difficult trading conditions were exacerbated by some truly appalling corporate behaviour in the UK.”

Howard pointed the figure at the company’s former banks who did “little to support us despite a relationship going back many years”.

He said their constant change in personnel, interpretation of facility limits to the narrowest extent possible and failure to respond to requests is a “sad reflection on the state of a once reliable business partner”.

“The reality is that they did nothing to help us and in practice nearly caused our demise.”

The company, which supplies employee engagement and recruitment outsourcing services, sold its overseas subsidiaries and UK business to Capita on 31 December. Work Group the disposal was the “culmination of an extremely difficult year”.

Shares are expected to be restored to trading on AIM later on Friday after the publication of the group’s annual report and account to shareholders.

“Following the sale of the group’s businesses to Capita in December 2015, management has been working to manage the remaining assets and liabilities to maximise cash,” said Howard.

“At 30 June 2016 the group's cash balances were approximately £850,000 but there were significant debtor sums outstanding which are being successfully collected. The tail of remaining liabilities, including the lease on premises in Hale Cheshire, are being managed to reduce their cash impact."

The company reported a loss before tax of £1.1m for the year to 31 December 2015, compared to a loss of £3.4m the previous year. Cash at year end was £1.7m, up from £0.1m the prior year.

Group revenue fell 6.5% to £7.1m, reflecting discontinued operations.

Operating expenses, excluding exceptional items, fell to £0.7m from £5.5m but failed to offset the decline in revenue.

Operating losses came to 0.7m, down from £1.2m in 2014.

The group is currently evaluating possible reverse takeover acquisition targets. The chairman warned, however, that following late payments to its smaller suppliers the situation in the UK “will continue to deteriorate.