WYG plc, the international project management and technical consultancy, announces its audited final results for the year ended 31 March 2018, highlights of which are as follows:
HIGHLIGHTS
Stable revenue; improved H2 and strengthening orderbook
Financial overview:
- Revenue* up 1.7% at £154.4m (2017: £151.8m); H2 revenue of £78.2m (H1: £76.2m)
- Statutory operating loss of £4.8m (2017 profit of £2.2m); loss before tax £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 the North Associates business
- Adjusted operating profit** £3.5m (2017: £8.8m); H2 operating profit of £2.5m (H1: £1.0m)
- Adjusted profit before tax** £2.9m (2017: £8.2m); H2 adjusted PBT of £2.2m (H1: £0.7m)
- Adjusted diluted earnings per share** 4.4p (2017: 11.9p)
- Loss per share 6.9p (2017: earnings of 3.3p)
- Proposed final dividend maintained at 1.2p (2017: 1.2p), giving a total dividend for the year of 1.8p (2017: 1.8p)
- Operating cash conversion*** of 190% (2017: 92%)
- Net debt as at 31 March 2018 £6.3m (30 September 2017: £10.1m, 31 March 2017: £2.5m) impacted by capital expenditure, cash costs of legacy items**** and restructuring
- Order book up 14.7% to £166.4m as at 31 March 2018 (31 March 2017: £145.0m):
o Consultancy Services order book up 6.9% to £96.1m (2017: £89.8m) reflecting continuing growth in our infrastructure and planning markets
o International order book up 27.5% at £70.3m (2017: £55.2m) following project wins in the year
* Including revenue from Joint Ventures
** Adjusted operating profit is statutory operating profit after adding back separately disclosed items
*** Underlying operating cash conversion is defined as adjusted operating cash flow divided by adjusted operating profit
**** Items include PII claims, vacant premises and legacy pensions costs
Operational overview:
- Consultancy Services revenue up 3.0% at £119.3m (2017: £115.8m), reflecting improving performance across most areas, despite project delays in H1
- International Development revenues reduced to £35.1m (2017: £36.1m) as H2 was impacted by delays in funding for Turkish projects caused by the transition between the first and second phases of the IPA funding programmes
- Established a new international holding company in the Netherlands to underpin ability to bid, win and deliver EU work
- Agreed and extended £35m bank facility with HSBC to 2022
- Actions being taken to improve profitability and efficiency across the business include:
o Closed loss-making North Associates business
o Closing non-core Romanian and Bulgarian businesses – trading licences retained
o Steps taken to simplify and flatten the management structure
o Efficiency review underway, for implementation progressively in FY 2018/19 and beyond
o Targeted investment in IT, including digitalisation, business infrastructure, London presence and capabilities to support efficient future growth - Board changes:
o Douglas McCormick appointed as Chief Executive Officer in June 2017
o Jeremy Beeton succeeded Mike McTighe as Chairman with effect from September 2017
o Marcia Marini appointed as a non-executive Director with effect from January 2018
o David Jeffcoat to retire at the AGM following 9 years’ service
Current Trading & Outlook:
- Strengthening order book provides a sound basis for current year expectations and medium-term confidence
- Consultancy Services business delivering improved results
- International Development opportunities continue despite delays in Turkey
- Underlying business robust, expecting to return to an improved profitability trajectory in the medium term
Douglas McCormick, Chief Executive Officer of WYG plc, commented:
“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.”
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