WYG boosted by improved second half performance
Project management consultancy WYG said this morning that action being taken to improve profitability and efficiency across the business is paying off as it reported a strong order book and a rise in revenue.
The Leeds-based group said that after posting a “disappointing” set of results at the half year, there have since been “several positive developments” to ensure it meets the market’s revised expectations of its profit and cash performance.
For the year ended March 31, WYG reported revenue of £154.4m, a rise of 1.7% from £151.8m the year before.
WYG made a statutory operating loss of £4.8m (2017 profit of £2.2m) and a loss before tax of £5.3m (2017: profit of £1.6m) after previously announced £2.5m increase in legacy claim provisions and a £3.2m charge relating to the closure of its North Associates business.
Adjusted operating profit fell to £3.5m from £8.8m, in line with market expectations, while second-half operating profit improved to £2.5m from £1m the previous year.
Adjusted profit before tax declined to £2.9m from £8.2m. However, the second half performance improved, with the group reporting adjusted profit before tax of £2.2m from £700,000.
The group reported a strengthening order book, up 14.7% to £166.4m compared to £145m the year before.
WYG, which has agreed a £35m bank facility with HSBC through to 2022, said an efficiency review is underway, which saw the closure of its loss-making North Associates business and its non-core Romanian and Bulgarian businesses, while it said steps have been taken to flatten the management structure.
Douglas McCormick, chief executive of WYG, said: “These results reflect an improved second half despite the continued delays experienced by our Turkish business. Having posted a disappointing set of results at the half year, the team has taken action to start to offset the issues we highlighted in August and November 2017, and there have since been several positive developments ensuring that we met the market’s revised expectations of our profit and cash performance.
“We have made good progress implementing our strategy; extended our bank facility with HSBC; and completed a significant step to stabilise WYG’s position in light of the potential impact of Brexit.
“Many of the major projects in both of our principal business streams that were delayed in 2017 are now being delivered and our strong order book underpins a significant proportion of FY19’s projected earnings. We have a clear strategy in place, a reshaped leadership team and a strong wider group with deep expertise in our chosen markets. There is plenty of opportunity to build on this robust platform and I believe we are taking the right steps to return to growth in profitability.”
