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WYG "well placed for a return to profitability and positive cash flows"

Self-help measures are starting to take effect and whether the company becomes part of Tetra Tech, which launched a recommended offer last month for the company, or goes it alone, management is confident things are on the up
Infrastructure workers
WYG's business would enhance Tetra Tech's leading positions in water, environmental, sustainable infrastructure and international development

Project management and consultancy group WYG PLC (LON:WYG) said its consultancy services business is stable in most areas and starting to deliver improved results.

The company, which agreed last month to a takeover offer from Tetra Tech, said the year to the end of March had been a difficult one for the group but management actions to drive efficiencies are beginning to take effect.

READ WYG soars as it agrees to be taken over by Tetra Tech for £43mln

Revenue, including revenue from joint ventures, rose 1.7% to £157.0mln in the most recently completed fiscal year from £154.4mln the year before.

The second half of the financial year saw a noticeable pick-up, with revenue rising to £81.7mln from £75.3mln.

Consultancy Services revenue over the full year was down 1.2% at £117.9mln (2018: £119.3m), reflecting a difficult final quarter in the UK.

International development revenues in the same period increased to £39.1mln from £35.1mln the year before as various large projects got underway.

Adjusted profit before tax fell to £1.0mln from £2.9mln, reflecting the previously announced disruption to business activity caused by uncertainty over Brexit.

READ WYG lowers profit outlook as Brexit knocks business confidence

The statutory loss before tax narrowed to £4.6mln from £5.3mln the year before.

No final dividend has been declared as the group is focused on reducing its net debt, which at the end of March stood at £9.3mln, versus £13.2mln six months earlier.

The order book stands at £166.7mln, which the group said provides a sound basis for trading in the current year.

“We have won or renewed our place on many key frameworks and secured a number of major new projects which will underpin a significant proportion of our projected earnings for FY20 [fiscal 2020] in both our primary business streams,”said Douglas McCormick, the chief executive officer of WYG.

The Tetra Tech takeover offer has been recommended by the board and was made at a significant premium to the prevailing share price so the odds are that it will go through but McCormick said whether the group became part of Tetra Tech or went it alone following a fundraising to strengthen the balance sheet, “we believe WYG is well placed for a return to profitability and positive cash flows”.

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WYG PLC Timeline

February 26 2019

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