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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Wyg Plc | LSE:WYG | London | Ordinary Share | GB00B5N5WH70 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 54.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMWYG
RNS Number : 3534Y
WYG Plc
05 December 2017
5 December 2017
WYG plc ("WYG" or the "Group")
Half Year Report
WYG, the global project management and technical consultancy, announces its half year results for the six months ended 30 September 2017.
Key points:
Financial:
-- Revenue* up 3.8% to GBP76.2m (H1 2016: GBP73.5m) -- Adjusted operating profit before tax** GBP1.0m (H1 2016: GBP2.8m)
-- Loss before tax GBP2.8m (H1 2016: profit of GBP0.8m) after provision of GBP2.45m for legacy contract claims from discontinued businesses
-- Adjusted** earnings per share 1.0p (H1 2016: 3.7p) -- Interim dividend maintained at 0.6p per Ordinary Share (H1 2016: 0.6p)
-- Net debt as at 30 September 2017 GBP10.1m (2016: GBP4.9m) - expected to reduce to c.GBP6.0m to GBP7.0m by year end
*Including share of Joint Venture revenues
**Before separately disclosed items
Operational:
-- Consultancy Services profitable despite contract delays and lower volumes -- International Development increased both revenue and underlying profit contribution
-- Established new international holding company in Netherlands to underpin ability to bid, win and deliver EU work
-- Order book increased by 17% to GBP170.0m at 30 September 2017 (31 March 2017: GBP145.0m) with over GBP50.0m to be delivered by the end of the current financial year:
o Consultancy Services has continued to grow, closing at GBP95.6m: up 11.4% from 31 March 2017 (31 March 2017: GBP85.8m)
o International Development's order book stood at GBP74.1m, up 25% (31 March 2017: GBP59.2m)
-- Renewed and extended bank facility with HSBC -- Marcia Marini appointed as a non-executive director
-- Continued to invest in IT, business infrastructure, London presence and capabilities to support future growth
Outlook:
-- International Development business performing broadly in line with expectations -- Lower than anticipated trading volumes in Consultancy Services -- FY18 guidance lowered on 24 November -- Underlying business robust, expect to return to a growth trajectory in the medium term
Douglas McCormick, Chief Executive Officer of WYG, said:
"Although this is a disappointing set of results, reflecting the issues we highlighted in August and November 2017, there are positives. We continue to anticipate a stronger second half, consistent with our historical seasonal trading pattern and our guidance in November. We remain confident that the underlying business is robust and that, supported by a strong order book, we are taking the correct steps to return to a growth trajectory. Importantly, revenue is up on the comparative period and we are seeing major projects in both our principal business streams start to mobilise, albeit some months later than originally expected.
"My first six months at WYG have been very busy. We have been operationalising the commercial strategy announced in June 2017; extended our bank facility with HSBC; and completed a significant step to improve WYG's position in the light of the potential impact of Brexit.
"Having met a number of major clients, visited almost all our offices and spoken with several hundred of our highly-skilled staff, I am reassured that WYG is a fundamentally sound business and that we have a strong platform from which to grow in the medium term."
For further information, please contact:
WYG plc Tel: +44 (0) 113 278 7111 Douglas McCormick, Chief Executive Officer Iain Clarkson, Chief Financial Officer MHP Communications Tel: +44 (0) 203 128 8100 Katie Hunt / Ollie Hoare / Pete Lambie N+1 Singer Tel: +44 (0) 207 496 3000 Sandy Fraser / Rachel Hayes WH Ireland Limited Tel: +44 (0) 207 220 1666 Tim Feather +44 (0) 113 394 6611 Ed Allsopp +44 (0) 117 945 3470
CHAIRMAN'S STATEMENT
Introduction
Revenue for the half year ended 30 September 2017, at GBP76.2m is up 3.8% on the comparative period although, as expected, profit before tax (before separately disclosed items) has reduced significantly to GBP1.0m and net debt has increased to GBP10.1m. Despite this, the Group's order book, our key lead indicator, has increased to its highest level in recent years at GBP170.0m as at 30 September 2017, up 17% since 31 March 2017.
Overall, we have seen increased activity in almost all areas of our Consultancy Services business albeit at lower levels and margins than we expected at the beginning of the year. Our International Development business showed good growth. Consistent with previous years, we expect an overall improvement in the second half.
Commercial Strategy
We are making progress implementing the Group's strategic growth plan (announced in June 2017) which includes bringing together those parts of our business, both in the UK and internationally, which operate in related technical services fields under the Consultancy Services business stream. Our International Development business stream focuses on projects where we work in collaboration with governments and donor agencies to promote socio-economic stability and trade development to unlock the potential for sustainable development among local communities.
In support of our ambition to act as a trusted adviser to clients and provide them with a broader set of management consultancy services, we have also created a Strategic Advisory business stream to provide high-level advisory services to help clients create value, manage risk and make critical investment decisions.
Operationally, we continue to drive efficiencies in our office portfolio and to make the most of technology to improve the quality of delivery and we have recently initiated a programme to achieve a greater standardisation of business processes throughout the Group.
We have also taken a significant step to ensure that our business model remains appropriate and resilient by creating a new intermediate holding and management company in the Netherlands to ensure that we remain eligible under the relevant EU regulations to bid for, secure and deliver work funded from the EU Budget or EU Development Funds. We have achieved this by undertaking a merger of WYG International Limited with a newly created company registered in the Netherlands, in accordance with the UK Companies (Cross-Border Mergers) Regulations 2007 and the relevant provisions of the Dutch Civil Code. The merger became effective on 1 December 2017.
Business Review
Although our Consultancy Services business has seen growth in almost all its main markets, it has been at lower levels than we expected at the beginning of the year. Significantly lower than anticipated volumes of work under major framework contracts, combined with the loss or delay of certain new contracts we had previously expected to win in the current period, led the Board to announce on 24 November 2017 that it is taking a more cautious view of trading performance for the remainder of the financial year. That guidance took account of the following which have impacted Consultancy Services:
-- the Planning and Transport Planning businesses have performed in line with expectations in the North and Midlands regions, but have been adversely affected in the South by the intense competition for senior talent;
-- the real estate consultancy which we acquired in October 2015, has been severely impacted by developments in Cumbria where the business has its core operation. The decision by the lead developer to defer investment in the proposed new nuclear power plant at Moorside has had severe knock on effects on many businesses considering investment in the region, including Britain's Energy Coast, a major client that specialises in owning, developing and regenerating property in the region;
-- a review of current major contracts in the Consultancy Services business has concluded that a small number of engineering projects are likely to deliver lower profitability than previously forecast; and
-- having completed most of the restructuring necessary in Poland, the business has now started to recover and show better profitability from its reduced cost base. Nevertheless, our Polish business has reported continuing softness in its markets and, although results are now improving, it appears unlikely to achieve its targets for the year.
After a slower than expected start, our International Development business is now performing in line with expectations - indeed, in the last two months it has started to catch up some of the ground lost when two major frameworks we expected to mobilise during the early part of the financial year were delayed. Work on both these programmes is now progressing well.
In Turkey, we have made the most of the opportunities won last year and which are scheduled to finish shortly, delivering a strong first half. Apart from some delays in obtaining final sign off and payment on long term programmes, and the inevitable pause before programmes are tendered under the new funding cycle, we are seeing only a limited impact from the local political situation.
Results
Gross revenue (including our share of Joint Venture revenues) was up GBP2.7m to GBP76.2m (H1 2016: GBP73.5m). Lower than anticipated volumes on certain frameworks in both Consultancy Services and International Development in the first few months of the year significantly impacted revenue although activity on these frameworks is now starting to flow through.
Adjusted operating profit (before separately disclosed items) was GBP1.0m (H1 2016: GBP2.8m) representing a decreased operating margin (before separately disclosed items) of 1.3% (2016: 3.8%). This was primarily a consequence of maintaining an increased capacity in certain parts of the business in anticipation of work that has now materialised, albeit slowly or at lower levels than we expected, coupled with the negative impacts of the operational factors outlined above. We remain focussed on maintaining a balance between managing our cost base and ensuring that we retain key people and the resources and capabilities to deliver and win quality work.
On a statutory basis, the Group made a loss before tax (after separately disclosed items) of GBP2.8m (H1 2016: profit of GBP0.8m) on pre-joint-venture revenues of GBP75.5m (H1 2016: GBP72.9m). The statutory loss reflects an increase of GBP2.45m in our provision for contract claims. Although we have had considerable success in reducing the number and value of outstanding liabilities from legacy businesses over the past few years, in the light of certain contract claims issues from discontinued businesses, we have decided that it would be prudent to increase this provision, which is reported within separately disclosed items.
Earnings per share adjusted to exclude separately disclosed items were 1.0p (H1 2016: 3.7p).
The Group closed the period with net debt of GBP10.1m (H1 2016: GBP4.9m) reflecting increased working capital requirements driven by the increase in revenue, deferred consideration payments on acquisitions and planned spending on legacy items. Cashflow has also been significantly impacted by the build up of working capital in Turkey as we complete a number of projects under the current IPA I funding cycle. We expect significant cash receipts from our business in Turkey by the calendar year end.
Operating cashflow showed an outflow of GBP6.0m (H1 2016: GBP2.6m). We continue to maintain our focus on cash generation and the effective management of working capital and expect net debt to reduce, reflecting the usual improvement in the second half.
Bank facility
In September, in anticipation of the continuing growth of the business, we extended our committed multi-currency revolving credit facility with HSBC from GBP25m to GBP35m. The facility, which means we have sufficient headroom and margin within our covenants, offers the Group broad flexibility between debt and bonding requirements and now runs until September 2022.
People and Awards
We recognise that the quality and dedication of our employees is essential to our success and it is pleasing to see this recognised in a number of awards and commendations made during the period.
We are also very pleased to have recently made several important senior new appointments who we expect to make significant contributions to winning and delivering new business to the benefit of future years.
Total headcount as at 30 September 2017 decreased to 1,520 (31 March 2017: 1,568) reflecting the intense competition for talented staff particularly in our Planning and Transport Planning businesses.
As a consequence, we have further strengthened our internal recruitment capability and are seeing material cost benefits from directly sourcing more than 80% of new recruits at all levels of the business. We continue to pay close attention to our remuneration and reward structures and to work at employee retention and engagement.
Dividend
The Board remains confident in the Group's medium term prospects and, after careful consideration, confirms that it intends to pay an unchanged interim dividend of 0.6p per ordinary share (30 September 2016: 0.6p). The interim dividend will be paid on 4 April 2018 to shareholders on the register on 2 March 2018 and WYG shares will trade ex-dividend on 1 March 2018.
Board changes
As previously announced, on 12 June 2017 Douglas McCormick took up the appointment of Chief Executive Officer and, on 21 September 2017, I succeeded Mike McTighe as Chairman of the Board. Neil Masom has agreed to be the Senior Independent Non-Executive Director.
We are also pleased to announce that Marcia Marini has been appointed to the Board as a Non-Executive Director with effect from 1 January 2018.
Marcia has 25 years' experience in senior roles in a wide range of businesses and sectors with private and not-for profit entities, and strong management consultancy experience which will be valuable as we develop our Strategic Advisory offering. Marcia has a wealth of experience of working with Government agencies, particularly in the UK. She is a Non-Executive Director on the Board of Social Development Direct Limited - a global provider of inclusion and gender equality services. Earlier in her career, Marcia undertook consultancy for the World Health Organisation and other international agencies throughout the developing world and particularly in Latin America. From 1996, she managed and led the growth and sale of HLSP Consulting Limited - a consultancy, programme management and policy advice firm operating in the international development arena. Between 2003 and 2008, she was Managing Director of Mott Macdonald's Health Unit, an Executive Director of their Education Unit and, for a time, a member of their Risk Management Committee.
Marcia is the founder of Ancora Consulting Limited, a management consultancy firm and, as a senior organisational development and change management professional, Marcia now consults with many small, medium and large corporations.
Outlook
This is a disappointing set of results reflecting the issues we highlighted in August and November 2017. However, we continue to anticipate a stronger second half, consistent with our guidance in November. Furthermore, we remain confident that the underlying business is robust and that, supported by a strong order book, we are taking the correct steps to return to growth in profitability. Crucially we are seeing major projects in both divisions start to mobilise albeit some months later than originally expected.
We expect a significant improvement in Consultancy Services - primarily in Infrastructure & Built Environment and Asset & Project Management driven in part by the large work packages coming through on the DIO's Principal Support Provider and Regional Commissioning Model and other frameworks. Internationally, we also expect a significantly improved performance although the balance of activity will change as, in Turkey, we expect a lull around the calendar year-end during the transition between the first and second phases of the IPA funding programmes, while the major projects we are delivering in Southern Africa and in the Western Balkans are ramping up.
The scale of the opportunity in all our target markets continues to give us confidence for the future and we have a strong and improving order book as evidence of our ability to win good quality work. We have taken steps to address the concerns we have highlighted and, in particular, we have ensured that we can continue to bid, win and deliver EU work regardless of the progress of negotiations on Brexit.
Despite a weaker first half than originally expected, WYG has a sound operational platform from which to deliver the increase in contracted work due during the second half. Accordingly, we expect a full year performance which is in line with recently revised market expectations while continuing to invest in the business to support future growth.
Jeremy Beeton
Chairman
5 December 2017
BUSINESS REVIEW
Operationally, the Group is structured, and reports, as two principal business streams: Consultancy Services and International Development. For the time being, the Strategic Advisory business stream continues to be reported within Consultancy Services.
Consultancy Services (74.7% of Group Revenue)
The Consultancy Services business stream revenue was broadly static at GBP56.9m (H1 2016: GBP57.3m) with an operating profit before separately disclosed items and central overheads of GBP1.6m (H1 2016: GBP4.1m).
WYG Consultancy Services provides expertise in a broad range of services in property, assets and infrastructure, which makes us well positioned to take advantage of growing opportunities in our markets. We operate in three divisions: Planning & Advisory Services, Asset & Project Management and Infrastructure & Built Environment.
We are the UK's third largest planning consultancy. This year, the UK's focus on residential construction is leading to an increase in our residential sector work, including an increasing number of proposals for greenbelt development. We are also increasing our activity in the retail and hotel sectors, while working across the UK to build projects that use the combination of our national coverage and local expertise.
In Infrastructure, we see growing opportunities in Highways and Rail (including HS2). In Highways, the allocation of vehicle excise duty funding towards highways should boost investment in much needed backlog projects. Highways England has also confirmed that it is looking to bring forward around 30 applications for major road projects between now and 2020. In Rail, we have secured new projects in station support and environmental planning in the UK, as well as major new projects in Poland.
In Defence, securing our position as the sole contractor on two of the three regions under the Defence Infrastructure Organisation's Regional Commissioning Model (RCM), has led to increased assignments across the business, especially in Architecture, Quantity Surveying, and Major Projects. Other major wins from DIO are also supporting growth in this area.
Our ability to deliver Major Projects continues to be a strength. We have several new wins and we are tracking several large new developments for which we are well positioned. We continue to grow our asset management capability through digitisation of our core service offering, generating efficiencies and competitive edge in our service delivery. Additional service streams are growing in BIM (Building Information Modelling), VR (Virtual Reality) and GIS (Geographic Information Systems) consultancy.
In energy, low carbon generation and balancing infrastructure continue to be a focus for us. The increasing economic viability of wind has led to new work in planning and site support. We also have a strong nuclear capacity and although uncertainty remains in the UK new build sector, we expect nuclear to be an important part of the energy supply chain in the coming years. We have a 30-year presence in nuclear in West Cumbria, and have been appointed for new CDM (Construction Design & Management) and acoustic requirements with EDF at Hinckley C, while being well placed for the expected Moorside project. Within Decommissioning, we have new appointments at Winfrith on the Steam Generating Heavy Water Reactor and a framework appointment at Dounreay for Asbestos management consultancy. We have been shortlisted for a Nuclear Decommissioning Agency Innovation Award with our partners JFNL for the first use of UAV (drone) technology in controlled areas of Sellafield. The findings are estimated to have brought up to GBP750k of potential savings to the stack demolition project.
In environment, we expect continued growth. Residential and mixed use development remain major components of our environmental work, where we bring strong sustainability principles to inform master planning and design. Infrastructure, in particular highways, rail and flood defence, continue to be key drivers for us across many of our environmental skill areas as does land regeneration, particularly through our framework with National Grid.
Regionally, we are well positioned for growth in our work in Northern Ireland. A works contract estimated at GBP100m+ on the Strule Shared Education Campus in Northern Ireland plays to both our regional and sector strengths. Similarly, two large hospital projects in Northern Ireland are expected, one in the next few months and another next year. Our Poland technical team is seeing stronger performance on the back of recent Rail wins, and we maintain latent capacity on our nuclear new build contract.
As at 30 September 2017, the Consultancy Services business's order book stood at GBP95.6m (31 March 2017: GBP85.8).
International Development (IDB) (25.3% of Group Revenue)
The International Development business generated a 19.5% increase in revenue to GBP19.3m (H1 2016: GBP16.1m) with an operating profit before separately disclosed items and central overheads of GBP1.3m (H1 2016: GBP0.9m).
We generate most of our revenue from socio-economic, technical and engineering programmes, the majority of which are funded under the Instrument for Pre-Accession Assistance (IPA) - a component of the EU's Multi-annual Financial Framework 2014-2020. We operate through two divisions: Socio-economic and Technical, on a sectoral basis focusing primarily on:
-- Public Financial Management (PFM) & Governance -- Monitoring, Evaluation & Learning -- Human Resources -- Climate Change & Adaption -- Infrastructure & Advisory Services
Our Socio-economic Division maintained its leading position in Turkey delivering a wide variety of programmes designed to increase employment and employability, promote social inclusion and improve business and ethical standards.
Our Infrastructure team also continued to lead the market in the water & waste water sector in Turkey, where we are delivering five major projects. We have also started work on our first major project in the Turkish transport sector, "Turkey's National Transport Masterplan".
We continue to make good progress with our efforts to diversify in technical services and pursue eligible opportunities with a range of public and private sector organisations in relation to: soft environment (i.e. climate change, agro-environment, environmental impact assessment, eco labelling), transport (i.e. road safety, capacity building for ministry of transport, accessibility of passenger transport services), energy (renewables, energy efficiency) and in other sectors in Turkey, Jordan, Lebanon and the rest of the region.
As external dynamics are prone to rapid and unpredictable change we are ready to pursue opportunities as they arise whilst continuing to deliver our longstanding, flagship programmes of work. One of these is the Sustainable Agriculture Intensification Research and Learning in Africa (SAIRLA) programme which is being jointly managed by WYG alongside the Natural Resources Institute at the University of Greenwich. SAIRLA is a five-year, GBP8 million programme that seeks to generate new evidence and design tools to enable governments, investors and others to deliver more effective policies and investments in sustainable agricultural intensification that strengthen the capacity of poorer farmers, especially women and youth, to access and benefit from SAI.
In Southern Africa, we continue to work on the Climate Resilient Infrastructure Facility (CRIDF), a major donor funded programme to improve the sustainable, equitable use of Southern Africa's transboundary water resources.
Having benefitted from the results of a very busy business development period in the previous financial year, we continue to expand the forward order book. At 30 September 2017, the International Development business's order book stood at GBP74.1m (31 March 2017: GBP59.2m.)
Strategic Advisory
Our Strategic Advisory business is an innovative part of our business and aims to connect the Group into new and important client relationships. The business takes a proactive, management consultancy approach to help clients create value, manage risk and make investment decisions.
We have made London a priority in changing our network, influence and profile. Our new office in the City provides us with more direct access to decision makers which we expect to help us win clients, secure high value work and export opportunity throughout the business.
We have secured a number of high profile Delivery Partner roles with UK Government departments, expanding our Defence Infrastructure Organisation (DIO) Principal Support Provider (PSP) contract into the Regional Commissioning Model and achieving successes in response to the one HMG Overseas strategy with the PSP Overseas Framework which provides the FCO, DfID, MoD and other Government departments support for HMG international interests.
We are expanding our existing land and property consultancy with a focus on rural, commercial and residential sectors and connecting it to our due diligence teams to consolidate existing services for the London private sector and international real estate. This broader set of property services also links the Defence Estate Optimisation Programme for land disposal for residential development with the Homes and Communities Agency.
We are pleased with our success to date but even more positive for the future with the excellent new people already creating value and opportunity.
Unaudited consolidated income statement
For the six months ended 30 September 2017
Hot Features
Premium
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2017
2017 2016 Audited
Notes GBP'000 GBP'000 GBP'000
---------------------------- ----- ---------- ------------------ ----------
Continuing operations
Revenue including share
of joint venture revenues 76,231 73,456 151,824
Less share of joint venture
revenues (755) (513) (1,284)
---------------------------- ----- ---------- ------------------ ----------
Revenue 5 75,476 72,943 150,540
Operating expenses (78,012) (72,037) (148,585)
Share of result of joint
ventures 40 72 198
---------------------------- ----- ---------- ------------------ ----------
Operating (loss)/profit* (2,496) 978 2,153
Finance costs 6 (283) (220) (554)
---------------------------- ----- ---------- ------------------ ----------
(Loss)/profit before
tax (2,779) 758 1,599
Tax 7 - - 779
---------------------------- ----- ---------- ------------------ ----------
(Loss)/profit for the
period (2,779) 758 2,378
---------------------------- ----- ---------- ------------------ ----------
(Loss)/profit attributable
to the owners of the
parent (2,779) 758 2,378
---------------------------- ----- ---------- ------------------ ----------
(Loss)/earnings per share 8
Basic (3.8p) 1.1p 3.3p
---------------------------- ----- ---------- ------------------ ----------
Diluted (3.8p) 1.0p 3.3p
---------------------------- ----- ---------- ------------------ ----------
* Operating profit includes a number of items that are separately disclosed in note 4.
The accompanying notes to the Half Year Report are an integral part of this consolidated income statement.
Unaudited consolidated statement of comprehensive income
For the six months ended 30 September 2017
Six months
Six months ended
ended 30 30 Year to
September September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
------------------------------------- ---------- ---------- ---------
(Loss)/profit for the period (2,779) 758 2,378
-------------------------------------- ---------- ---------- ---------
Other comprehensive income:
Currency translation differences 435 962 1,110
Other comprehensive income
for the period 435 962 1,110
-------------------------------------- ---------- ---------- ---------
Total comprehensive (expense)/income
for the period (2,344) 1,720 3,488
-------------------------------------- ---------- ---------- ---------
Total comprehensive (expense)/income
attributable to the owners
of the parent (2,344) 1,720 3,488
-------------------------------------- ------- ----- -----
Unaudited consolidated balance sheet
As at 30 September 2017
As at As at As at
30 September 30 September 31 March
2017 2016 2017
Notes GBP'000 GBP'000 GBP'000
------------------------------ ----- ------------- ------------- ---------
Non-current assets
Goodwill 18,193 18,193 18,193
Other intangible assets 10 6,491 8,312 7,325
Property, plant and equipment 10 3,756 3,505 3,180
Investments in Joint
Ventures 553 518 603
Deferred tax assets 1,293 1,288 1,246
30,286 31,816 30,547
------------------------------ ----- ------------- ------------- ---------
Current assets
Work in progress 36,950 31,916 29,986
Trade and other receivables 26,656 28,796 30,323
Tax recoverable 125 300 370
Cash and cash equivalents 5,944 7,613 6,518
------------------------------ ----- ------------- ------------- ---------
69,675 68,625 67,197
------------------------------ ----- ------------- ------------- ---------
Current liabilities
Trade and other payables (46,465) (46,882) (49,608)
Current tax liabilities (304) (1,613) (235)
Financial liabilities 11 (11,000) (7,500) (4,000)
------------------------------ ----- ------------- ------------- ---------
(57,769) (55,995) (53,843)
------------------------------ ----- ------------- ------------- ---------
Net current assets 11,906 12,630 13,354
------------------------------ ----- ------------- ------------- ---------
Non-current liabilities
Financial liabilities 11 (5,000) (5,000) (5,000)
Retirement benefit obligation (1,983) (2,225) (2,115)
Deferred tax liabilities (1,980) (2,282) (2,035)
Provisions, liabilities
and other charges (5,127) (5,204) (3,177)
------------------------------ ----- ------------- ------------- ---------
(14,090) (14,711) (12,327)
------------------------------ ----- ------------- ------------- ---------
Net assets 28,102 29,735 31,574
------------------------------ ----- ------------- ------------- ---------
Equity attributable to
the owners of the parent
Share capital 78 73 75
Hedging and translation
reserve 1,930 1,347 1,495
Retained earnings 26,094 28,315 30,004
------------------------------ ----- ------------- ------------- ---------
Total equity 28,102 29,735 31,574
------------------------------ ----- ------------- ------------- ---------
Unaudited consolidated statement of changes in shareholders' equity
For the six months ended 30 September 2016
Hedging
and Non-controlling
Share translation Retained interest Total
capital reserve earnings Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ -------- ------------ ---------- ------- ----------------- --------
Balance as at 1 April
2016 73 385 27,791 28,249 32 28,281
Profit for the period - - 758 758 - 758
------------------------ -------- ------------ ---------- ------- ----------------- --------
Other comprehensive
income:
Currency translation
differences - 962 - 962 - 962
Other comprehensive
income for the period - 962 - 962 - 962
------------------------ -------- ------------ ---------- ------- ----------------- --------
Total comprehensive
income for the period - 962 758 1,720 - 1,720
------------------------ -------- ------------ ---------- ------- ----------------- --------
Share based payments - - 418 418 - 418
Dividend payable - - (684) (684) - (684)
Reduction in minority
shareholding - - 32 32 (32) -
Balance at 30 September
2016 73 1,347 28,315 29,735 - 29,735
------------------------ -------- ------------ ---------- ------- ----------------- --------
For the six months ended 31 March 2017
Hedging
and
Share translation Retained Total
capital reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- -------- ------------ --------- -------
Balance as at 1 October 2016 73 1,347 28,315 29,735
Profit for the period - - 1,620 1,620
--------------------------------- -------- ------------ --------- -------
Other comprehensive income:
Currency translation differences - 148 - 148
Other comprehensive income
for the period - 148 - 148
--------------------------------- -------- ------------ --------- -------
Total comprehensive income
for the period - 148 1,620 1,768
--------------------------------- -------- ------------ --------- -------
Share based payments - - 488 488
Share issue 2 - - 2
Dividends - - (419) (419)
Balance at 31 March 2017 75 1,495 30,004 31,574
--------------------------------- -------- ------------ --------- -------
Unaudited consolidated statement of changes in shareholders' equity (continued)
For the six months ended 30 September 2017
Hedging
and
Share translation Retained
capital reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- -------- ------------ --------- -------
Balance at 1 April 2017 75 1,495 30,004 31,574
Loss for the period - - (2,779) (2,779)
------------------------------------- -------- ------------ --------- -------
Other comprehensive income:
Currency translation differences - 435 - 435
Other comprehensive income
for the period - 435 - 435
------------------------------------- -------- ------------ --------- -------
Total comprehensive income/(expense)
for the period - 435 (2,779) (2,344)
------------------------------------- -------- ------------ --------- -------
Issue of shares 3 - - 3 Share based payments - - (280) (280) Dividends - - (851) (851) Balance at 30 September 2017 78 1,930 26,094 28,102 ------------------------------------- -------- ------------ --------- -------
Unaudited consolidated cash flow statement
For the six months ended 30 September 2017
Six months
Six months ended
ended 30 30 Year ended
September September 31 March
2017 2016 2017
Note GBP'000 GBP'000 GBP'000
------------------------------ ---- ---------- ------------ ----------
Operating activities
Cash (used in)/ generated
from operations 13 (5,727) (1,981) 3,380
Interest paid (184) (199) (554)
Tax paid (48) (463) (944)
------------------------------ ---- ---------- ------------ ----------
Net (cash used)/generated
from in operating activities (5,959) (2,643) 1,882
------------------------------ ---- ---------- ------------ ----------
Investing activities
Purchases of property,
plant and equipment (1,226) (1,157) (1,654)
Purchases of intangible
assets (computer software) (49) (197) (260)
Purchase of businesses
(net of cash acquired) (28) (723) (2,276)
Net cash used in investing
activities (1,303) (2,077) (4,190)
------------------------------ ---- ---------- ------------ ----------
Financing activities
Issue of shares 3 - -
Purchase of treasury shares (33) - -
Drawdown of loan 7,000 4,500 1,000
Dividends paid to company
shareholders (419) (684) (684)
Net generated from financing
activities 6,551 3,816 316
------------------------------ ---- ---------- ------------ ----------
Net decrease in cash and
cash equivalents (711) (904) (1,992)
Cash and cash equivalents
at beginning of period 6,518 8,231 8,231
Effects of foreign exchange
rates on cash and cash
equivalents 137 286 279
------------------------------ ---- ---------- ------------ ----------
Cash and cash equivalents
at end of period 5,944 7,613 6,518
------------------------------ ---- ---------- ------------ ----------
1. Company details
WYG plc is incorporated in the United Kingdom under the Companies Act and is registered in England & Wales with registered number 1869543. The address of its registered office is Arndale Court, Otley Road, Headingley, Leeds LS6 2UJ. The Company's ordinary shares are traded on AIM, a market operated by the London Stock Exchange plc.
The principal activity of the Group in the period under review was that of international multi-skilled consultant. The Group's revenue derives mainly from activities in the UK, Eastern Europe and Middle East & North Africa.
2. Basis of preparation
This condensed consolidated interim financial information for the six months ended 30 September 2017 should be read in conjunction with the financial statements for the period ended 31 March 2017, which are available on the Company's website at www.wyg.com, and have been prepared in accordance with IFRSs as adopted by the European Union. While the financial figures included in this half-yearly report have been computed in accordance with IFRSs are applicable to interim periods, this half-yearly report does not contain sufficient information to constitute an interim financial report as that term is defined in IAS 34.
This condensed consolidated interim financial information was approved for issue on 5 December 2017.
This condensed consolidated interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2017 were approved by the Board of Directors on 6 June 2017 and delivered to the Registrar of Companies. The report of the auditor on those accounts was unqualified and did not contain any statement under Section 498 of the Companies Act 2006.
The condensed consolidated interim financial information has neither been reviewed nor audited.
3. Accounting policies
The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 March 2017, as described in those annual financial statements.
Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected annual earnings.
4. Detailed consolidated income statement
Revenue
including
share
of joint Profit
venture Operating before
revenues profit tax
GBP'000 GBP'000 GBP'000
-------------------------------- ----------- ---------- ---------
Six months ending 30 September
2017
Before separately disclosed
items 76,231 1,018 735
Separately disclosed items - (3,514) (3,514)
-------------------------------- ----------- ---------- ---------
Total 76,231 (2,496) (2,779)
-------------------------------- ----------- ---------- ---------
Six months ending 30 September
2016
Before separately disclosed
items 73,456 2,820 2,600
Separately disclosed items - (1,842) (1,842)
-------------------------------- ----------- ---------- ---------
Total 73,456 978 758
-------------------------------- ----------- ---------- ---------
Year ending 31 March 2017
Before separately disclosed
items 151,824 8,768 8,214
Separately disclosed items - (6,615) (6,615)
-------------------------------- ----------- ---------- ---------
Total 151,824 2,153 1,599
-------------------------------- ----------- ---------- ---------
Details of separately disclosed items
Six months Six months
ended ended Year
30 30 ended
September September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
----------------------------- ----------- ------------- ----------
Share option credit/(costs) 400 (317) (742)
Amortisation of acquired
intangible assets (752) (973) (1,863)
Other costs (3,162) (552) (4,010)
Separately disclosed items (3,514) (1,842) (6,615)
----------------------------- ----------- ------------- ----------
The Group has incurred a number of items in the period and in the prior year, whose significance is sufficient to warrant separate disclosure. The key elements included within separately disclosed items are:
-- Period charge in relation to share option costs -- Period charge for the amortisation of acquired intangibles
-- Items included in other costs are legacy claims relating to non-continuing business and restructuring and refinancing fees. Prior year also include credits relating to the release of surplus vacant leasehold and deferred consideration provisions
5. Segmental information
IFRS 8 requires segment reporting to be based on the internal financial information reported to the chief operating decision maker. The Group's chief operating decision maker is deemed to be the executive management team comprising the Chief Executive Officer and the Chief Financial Officer. Its primary responsibility is to manage the Group's day to day operations and analyse trading performance.
Following the launch of the Group's new long-term growth strategy, the business has been reorganised to focus on the strengths of our consultancy services and international development business. The Group's segments are detailed below and are those segments reported in the Group's management accounts used by the senior management team as the primary means for analysing trading performance. The Executive Committee assesses profit performance using operating profit measured on a basis consistent with the disclosure in the Group accounts.
The Group's operations are now managed and reported by key technical segments as follows:
-- Consultancy Services -- International Development
The prior period results have been restated to reflect this new reporting structure.
The segmental results for the six months ended 30 September 2017 are as follows:
Consulting International
Services Development Group
GBP'000 GBP'000 GBP'000
---------------------------- ------------ ------------- -------
Revenues including share
of joint venture revenues 56,935 19,296 76,231
Less share of joint venture
revenues (755) - (755)
----------------------------- ------------ ------------- -------
56,180 19,296 75,476
Result
Operating profit before
central overheads and
separately disclosed
items 1,625 1,257 2,882
Central overheads (1,864)
----------------------------- ------------ ------------- -------
Operating profit before
separately disclosed
items 1,018
Separately disclosed
items (Note 4) (3,514)
Operating loss (2,496)
Finance costs (283)
----------------------------- ------------ ------------- -------
Loss before tax (2,779)
Tax -
---------------------------- ------------ ------------- -------
Loss for the period (2,779)
----------------------------- ------------ ------------- -------
Loss attributable to
the owners of the parent (2,779)
----------------------------- ------------ ------------- -------
5. Segmental information (continued)
The segmental results for the six months ended 30 September 2016 have been restated to reflect the new reporting segments:
Consulting International
Services Development
Restated Restated Group
GBP'000 GBP'000 GBP'000
---------------------------- ------------ ------------- -------
Revenues including share
of joint venture revenues 57,315 16,141 73,456
Less share of joint venture
revenues (513) - (513)
----------------------------- ------------ ------------- -------
56,802 16,141 72,943
Result
Operating profit excluding
central overheads and
separately disclosed
items 4,095 886 4,981
Central overheads (2,161)
----------------------------- ------------ ------------- -------
Operating profit before
separately disclosed
items 2,820
Separately disclosed
items (Note 4) (1,842)
Operating profit 978
Finance costs (220)
----------------------------- ------------ ------------- -------
Profit before tax 758
Tax -
---------------------------- ------------ ------------- -------
Profit attributable to
equity shareholders 758
----------------------------- ------------ ------------- -------
Profit attributable to
the owners of the parent 758
6. Finance costs
Six months
Six months ended
ended 30 30 Year ended
September September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
------------------------------------ ---------- ------------ ----------
Interest on bank loans, guarantees,
bonds and overdrafts 283 220 554
Total finance costs 283 220 554
------------------------------------ ---------- ------------ ----------
7. Tax
The tax charge for the period has been calculated by applying the Directors' best estimate of the effective tax rate for the year with consideration to the geographic location of the profits, to the profit before tax for the period.
8. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
Six months Six months
ended ended Year
30 30 ended
September September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
------------------------------------ ----------- ------------- ----------
Earnings for the purposes
of basic and diluted earnings
per share being profit for
the year (2,779) 758 2,378
Adjustment relating to separately
disclosed items (see note
4) 3,514 1,842 6,615
Tax impact of separately disclosed
items (see note 4) - - (354)
------------------------------------ ----------- ------------- ----------
Earnings for the purposes
of basic and diluted adjusted
earnings per share 735 2,600 8,639
------------------------------------ ----------- ------------- ----------
Six months Six months
ended ended
30 30 Year ended
September September 31 March
2017 2016 2017
Number Number Number
------------------------------ ----------- ----------- -----------
Number of shares
Weighted average number of
shares for basic earnings
per share 72,729,665 70,638,773 71,131,521
Effect of dilutive potential
ordinary shares:
Share options 1,037,600 3,099,555 1,560,338
Weighted average number of
shares for diluted earnings
per share 73,767,265 73,738,328 72,691,859
------------------------------ ----------- ----------- -----------
Earnings per share
Basic (3.8p) 1.1p 3.3p
Diluted (3.8p) 1.0p 3.3p
------------------------------ ----------- ----------- -----------
Adjusted earnings per share
Basic 1.0p 3.7p 12.1p
Diluted 1.0p 3.5p 11.9p
------------------------------ ----------- ----------- -----------
The adjusted earnings per share is calculated after excluding separately disclosed items. This more accurately reflects the underlying performance of the Group.
9. Dividends
The interim dividend of 0.6p per share (2016: 0.6p per share) was approved on 30 November 2017 and will be paid in April 2018.
The final dividend of 1.2p per share for the year ended 31 March 2017 was approved by the shareholders at the Annual General Meeting on 21 September 2017 and was paid on 2 October 2017. This was not recognised in the financial statements for the year ended 31 March 2017 but is recognised as a liability in these financial statements.
10. Property, plant and equipment and intangible assets
Property, plant
and Intangible
equipment assets
GBP'000 GBP'000
------------------------------- ---------------- -----------
Six months ended 30 September
2016
Opening net book amount as
at 1 April 2016 3,181 9,295
Additions 1,157 197
Depreciation and amortisation (857) (1,185)
Exchange differences 24 5
Closing net book amount as
at 30 September 2016 3,505 8,312
------------------------------- ---------------- -----------
Six months ended 30 September
2017
Opening net book amount as
at 1 April 2017 3,180 7,325
Additions 1,226 49
Depreciation and amortisation (657) (885)
Exchange differences 7 2
Closing net book amount as
at 30 September 2017 3,756 6,491
------------------------------- ---------------- -----------
11. Financial liabilities
30 30
September September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
------------------------------ ----------- ------------ ---------
Current
Bank loans and overdrafts 11,000 7,500 4,000
11,000 7,500 4,000
------------------------------ ----------- ------------ ---------
Non-current
Bank loans 5,000 5,000 5,000
5,000 5,000 5,000
------------------------------ ----------- ------------ ---------
Financial liabilities are
repayable as follows:
On demand or within one year 11,000 7,500 4,000
Greater than one year 5,000 5,000 5,000
16,000 12,500 9,000
------------------------------ ----------- ------------ ---------
12. Cash (used in)/generated from operations
Six months
ended Six months Year
30 ended 30 ended
September September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
-------------------------------------- ---------- ---------- ----------
(Loss)/profit from operations (2,496) 978 2,153
Adjustments for:
Depreciation of property, plant
and equipment 657 857 1,670
Amortisation of intangible assets 885 1,185 2,235
Loss on disposal of property,
plant and equipment - - 4
Share options (credit)/expense (400) 317 742
Operating cash flows before movements
in working capital (1,354) 3,337 6,804
(Increase)/decrease in work in
progress (6,964) (1,545) 1,976
Decrease/(increase) in receivables 3,667 (5,954) (7,030)
(Decrease)/increase in payables (1,076) 2,181 1,630
-------------------------------------- ---------- ---------- ----------
Cash (used in)/generated from
operations (5,727) (1,981) 3,380
-------------------------------------- ---------- ---------- ----------
13. Analysis of net (debt)/cash
Other At 30
At 1 April non-cash September
2016 Cash flows items 2016
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ----------- ----------- ---------- ------------
Cash and cash equivalents 8,231 (904) 286 7,613
Bank loans and overdrafts (8,000) (4,500) - (12,500)
------------------------------ ----------- ----------- ---------- ------------
Net cash/(debt) 231 (5,404) 286 (4,887)
Add back cash in restricted
access accounts (1,070) 231 (85) (924)
------------------------------ ----------- ----------- ---------- ------------
Unrestricted net cash (839) (5,173) 201 (5,811)
------------------------------ ----------- ----------- ---------- ------------
Other At 30
At 1 April non-cash September
2017 Cash flows items 2017
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ----------- ----------- ---------- ------------
Cash and cash equivalents 6,518 (711) 137 5,944
Bank loans and overdrafts (9,000) (7,000) - (16,000)
Net (debt)/cash (2,482) (7,711) 137 (10,056)
Add back cash in restricted
access accounts (1,214) 521 (36) (729)
------------------------------ ----------- ----------- ---------- ------------
Unrestricted net (debt)/cash (3,696) (7,190) 101 (10,785)
------------------------------ ----------- ----------- ---------- ------------
Restricted cash relates to restricted access accounts in WYG International Limited.
Other non-cash movements represent currency exchange differences.
14. Related party transactions
There have been no changes in the nature of related party transactions as described in the 2017 Annual Report and Accounts and there have been no new related party transactions which have had a material effect on the financial position or performance of the Group in the period ended 30 September 2017.
15. Availability of the Half Year Report
Copies of the Half Year Report can be obtained from the Company's registered office at Arndale Court, Otley Road, Headingley, Leeds LS6 2UJ, and on the Company's website: www.wyg.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FSUFWLFWSELE
(END) Dow Jones Newswires
December 05, 2017 02:00 ET (07:00 GMT)
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