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WYG Plc Trading Update

13/02/2019 2:30pm

UK Regulatory (RNS & others)


Wyg Plc Ord GBP0.001 (NEX:WYG.GB)
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RNS Number : 9315P

WYG Plc

13 February 2019

13 February 2019

WYG plc

("WYG" or "Company" or "Group")

Trading Update

WYG, the international professional services company, today provides the following update on trading for the year to date.

The Board expects revenue for the current year ending 31 March 2019 to be similar to the prior year and that revenue and net debt will be broadly in line with current market expectations. However, for the reasons explained below, we now expect a higher proportion of Group revenues to be generated from our International Development business. As a result, we now anticipate a second half operating profit performance which is below that achieved in the first half, implying an operating profit for the year as a whole which is materially below current market expectations.

We are now seeing a steady improvement in the conversion of our International Development business's pipeline into profitable work, with revenues anticipated to be slightly ahead of previous expectations. However, the business's margins remain lower than those of our mainly UK focussed Consultancy Services business as we continue to incur high bidding costs ahead of building revenues. In Turkey and Africa, we have a good order book of new work to be delivered in the next 12 months and our wider pipeline of future prospects continues to build healthily.

However, our UK markets are now being impacted by the current cautious business sentiment and political uncertainty, meaning that Consultancy Services is seeing some delays in investment decisions regarding new work as well as the deferral of activity on certain existing projects, across both the public and private sectors. As a result, we think it necessary to take a more cautious view as to the likely outturn for our UK business for the year such that we no longer expect to see the marked increase in our UK activity that has been typical of the final quarter of our financial year in the past.

As a result, we expect that we will not meet either of the net debt to EBITDA or interest cover covenants within our facility agreements for 31 March 2019 and we have opened discussions with our lending bank with a view to securing a deferral or waiver of the relevant covenant tests. We already have a number of clearly defined actions underway in order to materially reduce our net debt position. Subject to the timing of some larger trading receipts within our International Development business, we expect year end net debt to be in line with previous market expectations at around GBP10.0m.

We will provide a further update ahead of our financial year end on 31 March 2019.

Douglas McCormick, Chief Executive Officer of WYG, commented:

"While it is disappointing to be revising expectations today, subdued domestic economic conditions and the headwind from political uncertainty is affecting many businesses' willingness to commit to major new projects. This has particularly affected the construction sector which underpins much of our business in the UK."

"Our strategy of developing a simpler, more robust platform and driving efficiencies continues. I am confident that the actions we are taking will improve the longer term prospects of the business and we will look to accelerate these actions to mitigate against the impact of an unusually difficult final quarter in the current uncertain macro-economic environment."

This announcement contains inside information for the purposes of

Article 7 of Regulation (EU) 596/2014.

Contacts:

 
 WYG plc                                          Tel: 0113 278 
  Douglas McCormick, Chief Executive Officer       7111 
  Iain Clarkson, Chief Financial Officer 
 MHP Communications                               Tel: 020 3128 
  Katie Hunt / Ollie Hoare / Peter Lambie          8100 
 N+1 Singer                                       Tel: 020 7496 
  Sandy Fraser / Rachel Hayes / Justin McKeegan    3000 
 

ENDS

Notes to editors:

About WYG

WYG is an award-winning professional services firm operating from more than 50 locations across the UK, Europe, Africa, and Asia. We are driven by client service and underpinned by technical excellence. We help our clients create value, protect value, and manage risk. We are the partner of choice for organisations operating in complex or challenging environments.

We serve our clients through six business streams:

   --      International Development 
   --      Infrastructure & Built Environment 
   --      Programme & Project Management 
   --      Surveying & Asset Management 
   --      Environmental 
   --      Planning and Transport 

WYG plc's shares are traded on AIM, a market operated by the London Stock Exchange.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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February 13, 2019 09:30 ET (14:30 GMT)

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