RNS Number:1512J
White Young Green PLC
1 March 2005
Immediate Release 1 March 2005
WHITE YOUNG GREEN PLC
Interim Results Announcement
for the six months ended 31 December 2004
White Young Green Plc, consultant to the built, natural and social environment,
announces its Interim Results for the six months ended 31 December 2004.
Financial Highlights
* 64% increase in turnover to #65.83m (2003: #40.14m)
* 44% increase in profit before tax and goodwill amortisation
to #4.21m (2003: #2.93m)
* 11% increase in adjusted earnings per share to 7.8p (2003: 7.0p)
* 9% increase in dividend per share to 2.4p (203: 2.2p)
* Reduction in working capital days to 88 (2003: 124)
Operational Highlights
* 52% increase in net order book to #220m (2003: #145m)
* 13% underlying organic growth in the period
* 2 acquisitions completed in February 2005
* New framework contracts with a net fee value of #35m confirmed
* 60% of estimated net turnover for 2006 already secured
* Additional non-executive director appointed
* International business infrastructure established
* Major project wins announced for English Partnerships,
Network Rail, BNFL and the Office of Government Commerce
Chairman Peter Wood said:
"We approach the second half of the financial year in a confident frame of mind
with the order book at a record level, a platform for future international
growth established and the cross selling of complementary skill sets beginning
to reap significant reward. Trading remains in line with expectations and we
remain positive and confident about our future. "
For further information, please contact:
John Purvis, Chief Executive
WHITE YOUNG GREEN PLC Tel: 0113 278 7111
Tim Anderson / Rebecca Skye Dietrich
BUCHANAN COMMUNICATIONS Tel: 020 7466 5000
CHAIRMAN'S STATEMENT
SUMMARY
Having recently accepted the Chairmanship of White Young Green Plc (WYG) I am
delighted to report an excellent set of results for the six months to 31st
December, 2004. These results reflect an increased momentum in both turnover and
profit growth achieved as a result of double digit organic growth and a
demonstrably successful acquisition strategy which together have delivered a 50%
increase in operating profit before goodwill amortisation to #5.0m (2003:
#3.3m).
The acquisitions completed in the second half of the last financial year have
contributed strongly to this result, in line with our expectations, and their
integration is progressing well. IMC Consulting, in particular, has secured
contracts with a net fee value in excess of #20m since joining WYG which
underpins its workload requirements for both the current year and much of 2006.
In addition, an underlying organic growth rate of 13% has been achieved across
the Group which is extremely important in a people business where personal
motivation, commitment and ambition are key drivers in delivering enhanced
performance. This has been given additional focus in the period by the roll out
of the WYG Business Excellence Model which empowers all staff to share in the
ownership of the WYG business ethos.
RESULTS
Profit before tax and goodwill amortisation increased by 44% to #4.2m (2003:
#2.9m) and profit before tax was 32% higher at #3.3m (2003: #2.5m).
Overall turnover grew by 64% to #65.8m (2003: #40.1m). Included in this turnover
are transactions attributable to third parties, on which the Group does not make
a margin, of #11.4m (2003: #4.4m). This increased in the period as a consequence
of the acquisition of IMC Consulting in June 2004 which utilises a diverse range
of strategic partners in the delivery of its services.
Turnover attributable to in-house services increased by 52% to #54.4m (2003:
#35.7m). If the acquisitions secured in the period between January 2004 and June
2004 are excluded then the underlying organic growth in both net turnover and
profit before tax and goodwill amortisation is 13%.
Operating profit margin on in-house services remained very close to that
achieved last year at 9.2% (2003: 9.3%) despite the additional cost of
acquisition integration carried in the period. WYG continues to generate strong
operating margins which compare extremely favourably with other professional
consultancies in the sector peer group.
Earnings per share before goodwill amortisation increased by 11% to 7.8p (2003:
7.0p) whilst basic earnings per share fell to 5.4p (2003: 5.6p) as a consequence
of the increased goodwill charge following the acquisitions made last year. The
average number of shares in issue increased by 28% following the successful
share placing and open offer in January 2004 and the issuing of shares in
satisfaction of deferred consideration due for previous acquisitions.
The balance sheet remains strong and further improvements in working capital
management continue to be a priority for WYG. Overall working capital days
reduced markedly in the period to 88 days (2003: 124 days) due, in part, to the
advance payments enjoyed by IMC Consulting. Discounting those advance payments,
the underlying combined work in progress and debtor days of the UK and Ireland
business also fell to 116 days (2003: 124 days) whilst gearing, defined as total
Group borrowings divided by total net assets, came down to 35% (2003: 40%).
DIVIDEND
The interim dividend is being increased by 9% to 2.4p (2003: 2.2p). This will be
paid on 5th May, 2005, to shareholders on the register at 18th March, 2005.
REVIEW OF OPERATIONS
WYG has enjoyed another six months of successful trading with the volume of new
orders secured in the period, the committed long term order book and the
visibility of future pipeline projects all at record levels. Operational
highlights in the period include the following:
* 52% increase in net order book to #220m (2003: #145m)
* 71% increase in net fee value of new orders to #69.5m (2003: #40.7m)
* 28% excess of net fee value of new orders over net turnover
* 60% of estimated net turnover for 2006 already secured
* New framework contracts with a total net fee value of over #35m secured
* International business infrastructure established
All of the acquisitions completed in the second half of 2004 have integrated
well. Four of the five have already co-located with existing WYG business units.
Contracts have, where necessary, been novated to WYG and all key clients of the
acquired businesses have been retained post acquisition. Rebranding will be
complete by the end of June 2005 when IMC Consulting will change its name to WYG
International. Installation of WYG financial management systems is substantially
complete and all of the acquired offices comply with standard WYG monitoring and
reporting protocols. Most importantly, this has been achieved without any
diminution in either the work winning performance of the acquired businesses or
in the rate of profit contribution anticipated at the time of acquisition.
Initiatives are now underway to release the added value potential of all of
these acquisitions.
The largest acquisition of 2004 was that of IMC Consulting which took WYG to the
forefront of social and economic regeneration in emerging countries and those in
transition from a command economy to a free market economy. IMC Consulting has
therefore provided WYG with an established and effective platform for future
international growth and, since acquisition, has secured new development
aid-funded contracts with a net fee value of #20.3m in Poland, South Africa,
Romania, Kyrgyzstan and the Balkans. In addition, the operating infrastructure
and senior management resources of the business have been strengthened to enable
the process of diversification into new territories and the more traditional WYG
market sectors to begin.
In the domestic markets of the UK and Ireland WYG has had further success in
growing its portfolio of long term framework contracts. These provide clear
visibility of future earnings and enable the Group to establish high level
collaborative working relationships with both clients and the supply chain at a
more strategic level. Framework contracts account for over 50% of overall Group
turnover and the total net fee value of new framework contracts secured in the
period was in excess of #35m. The following are typical examples:
Office of Government Commerce - Property related services 4 years
(OGC)
BNFL - Civil Maintenance - Multi-skilled regulatory services 5 years
Authority
Belfast City Council - Cost management services 4 years
Metronet - Environmental & geotechnical 4 years
services
Home Office Prison Services - Multi-skilled professional 5 years
services
MOD - Defence Estates - Inspection services on RAF sites 3 years
Sainsbury - SE & SW England - Town Planning 5 years
services
It is of particular note that the Office of Government Commerce has awarded WYG
a national framework contract for a wide range of property related professional
services to be made available to all Central Government departments and Local
Authorities for a period of four years commencing in November 2004. Central
Government departments covered by this framework include MoD, DfES, DEFRA and
DVLA. The purpose of the framework is to provide property managers with access
to independent multi-disciplinary professional support, advice, assistance,
planning and project management services to supplement their in-house teams.
An increasingly important requirement of these framework contracts is the
ability to provide, coordinate and successfully manage an increasingly wide
range of complementary professional services. This is entirely consistent with
WYG's own corporate development strategy of building an integrated multi-skilled
business around the full life cycle of a clients key assets focussing equally on
the planning, implementation and operational phases. As a consequence WYG will
increasingly benefit from the on-going outsourcing of support services to be
delivered under the umbrella of these long term multi-professional framework
contracts.
There is also an increasing trend for existing WYG clients to recognise and make
use of the added value at their disposal from the broader range of strategic
skills now available to them from within WYG in the delivery of their major
projects. This is a reflection of the increasing success achieved in
cross-selling those skills to WYG's key clients. Typical examples of such
projects secured in the six months to 31st December, 2004, include the
following:
* Wolverton Park Regeneration, Milton Keynes
WYG has been commissioned by English Partnerships to provide a wide range of
professional services to enable the development of Wolverton Park. The scheme is
part of Wolverton Regeneration Strategy and is based on the redevelopment of
part of the former Wolverton Rail Works site, including Grade II listed
buildings, with the whole area being located within the Wolverton conservation
area. The scheme has an estimated total value of #71m and WYG is providing town
planning, environmental, highways, traffic, rail engineering and utilities
engineering consultancy services.
* London Kings Cross Station
WYG has been appointed by Network Rail as lead designer for a major strategic
upgrading and renewals programme at London Kings Cross Station. The scope of
work includes new access arrangements, roofing replacement works and improvement
programmes throughout the station. This major new project will include
significant input from WYG's rail team, environmentalists and all key
engineering disciplines.
* Downe Hospital, Downpatrick
WYG is providing cost management and engineering services on this new #38m Acute
Hospital Facility located on the site of the existing Downshire Hospital in
Downpatrick. The proposed accommodation includes an acute psychiatric unit,
accident and emergency facilities, out patient, coronary care and long-stay
dementia units. Completion is scheduled for early 2008.
ACQUISITIONS
On 28 February 2005, WYG completed two further important acquisitions for a
total initial cost of #2.63m. The financial details of these acquisitions are
contained in note 4 of the interim financial information.
The acquisition of Robert Long Consultancy Limited, with offices in Southampton,
Cambridge and Huddersfield, has added the complementary skills of waste
management engineering to WYG's portfolio of environmental services. This is
particularly important in the context of recent legislative changes in this
field as well as the significant international opportunities likely to arise in
this sector in the future.
The acquisition of WynThomasGordonLewis Limited, a town planning and urban
regeneration consultancy based in Cardiff, expands WYG's town planning
capability into the Welsh market. It also strengthens WYG's overall capability
and capacity in the strategically important urban regeneration field.
Both acquisitions are consistent with WYG's policy of identifying potential
added value over and above the basic trading value of each business. They bring
cross selling opportunities, access to new markets and enhanced profile and will
very quickly be integrated into WYG's existing operations.
DIRECTORS
Gareth Cooper retired as Chairman of WYG Plc, and from the Board, at the Annual
General Meeting held on 10 November, 2004, after eleven years continuous
service, first as a non-executive director of Ernest Green Holdings Plc and
subsequently as Chairman of White Young Green Plc. I take this opportunity to
add my thanks to Gareth for his wise counsel and assistance since I joined the
Board and also for his valued service to both companies over the past eleven
years. We all wish him a very happy and healthy retirement.
I am delighted to report that Brian Duckworth has agreed to join the Board of
WYG Plc as a non-executive director with effect from 1st April, 2005. Brian has
recently retired from the board of Severn Trent Plc on which he held the
positions of Managing Director of Severn Trent Water and Chairman of Severn
Trent Water International. He is also currently a non-executive director of
Redrow Plc and Avon Rubber Plc. Brian's operational experience within WYG's
traditional market sectors, both at home and in the international arena, will
bring significant added value to the Company.
EMPLOYEES
WYG has grown significantly over the past twelve months whilst retaining the
essential ethos, character and vision that has driven its corporate development
over recent years. This could not have been achieved without the belief,
commitment and enthusiasm of all of its staff including those who are relatively
new to the business. I therefore take this opportunity to thank all members of
staff for their exceptional support and professionalism.
The last six months has also seen the launch of the 'Fast Forward' campaign
designed to introduce the WYG Business Excellence Model to all employees
throughout the Group. The purpose behind this initiative is to encourage all
members of staff to take personal ownership of the Group's vision, values and
commitment to quality such that they feel empowered to personally contribute to
the achievement of those objectives in their own offices and markets. This has
been underpinned by the achievement of 'Investors in People' in offices
throughout the UK during the course of 2004.
OUTLOOK
WYG approaches the second half of the financial year in a confident frame of
mind. The order book is at record levels, the 2004 acquisitions have been
integrated and are contributing strongly, a platform has been established for
future international growth and the cross-selling of our complementary skill
sets is beginning to reap significant reward both on major projects and on the
growing list of long term framework contracts now available to the Group. All of
this is set against a business ethos that is committed to strong net margins,
continuous improvement in working capital management and the careful application
of risk management principles in all aspects of corporate development, including
continuing the diversity of sector commitment and specialist skills development
that gives WYG its stability and resilience.
Trading is currently in line with expectations and we remain positive and
confident about our future.
PETER S WOOD
Chairman
White Young Green Plc
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 31 December 2004
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2004 2003 2004
(unaudited) (unaudited) (audited)
Notes #'000 #'000 #'000
----------------------- ------ --------- --------- ---------
Turnover 1 65,826 40,142 89,850
Operating expenses (61,781) (37,276) (83,323)
Group operating profit 1
----------------------- ------ --------- --------- ---------
- Continuing operations 4,970 3,303 7,584
- Goodwill amortisation (925) (437) (1,057)
----------------------- ------ --------- --------- ---------
Profit before interest 4,045 2,866 6,527
Net interest payable (760) (373) (723)
----------------------- ------ --------- --------- ---------
Profit before tax 3,285 2,493 5,804
Tax 2 (1,132) (771) (1,926)
----------------------- ------ --------- --------- ---------
Profit after tax 2,153 1,722 3,878
Dividends (954) (851) (2,319)
----------------------- ------ --------- --------- ---------
Retained profit for the 1,199 871 1,559
period
----------------------- ------ --------- --------- ---------
Earnings per share 3
Basic 5.4p 5.6p 11.1p
Diluted 5.3p 5.5p 10.7p
Adjusted earnings per share 3
Basic 7.8p 7.0p 14.2p
Diluted 7.5p 6.9p 13.6p
Dividend per share 2.4p 2.2p 5.9p
----------------------- ------ --------- --------- ---------
SUMMARISED CONSOLIDATED BALANCE SHEET
as at 31 December 2004
As at As at As at
31 December 31 December 30 June
2004 2003 2004
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
-------------------------- --------- --------- ---------
Goodwill 33,105 15,199 34,010
Tangible assets 8,827 6,079 7,135
Work in progress 23,559 14,316 24,030
Debtors 34,765 23,539 34,401
Creditors (31,462) (13,092) (35,613)
-------------------------- --------- --------- ---------
68,794 46,041 63,963
-------------------------- --------- --------- ---------
Shareholders' funds 51,011 32,790 49,731
Net debt 17,783 13,251 14,232
-------------------------- --------- --------- ---------
68,794 46,041 63,963
-------------------------- --------- --------- ---------
RECONCILIATION OF MOVEMENTS IN GROUP SHAREHOLDERS' FUNDS
for the six months ended 31 December 2004
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2004 2003 2004
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
-------------------------- --------- --------- ---------
Profit after tax 2,153 1,722 3,878
Dividends (954) (851) (2,319)
-------------------------- --------- --------- ---------
1,199 871 1,559
New share capital issued, net of 110 761 14,576
expenses
Shares to be issued (134) (753) 1,658
Currency translation differences (75) (523) (570)
Employee Benefit Trust 180 (135) (61)
-------------------------- --------- --------- ---------
Movement in equity shareholders'
funds during
the period 1,280 221 17,162
Equity shareholders' funds at 49,731 32,569 32,569
beginning of period --------- --------- ---------
--------------------------
Equity shareholders' funds at end of 51,011 32,790 49,731
period --------- --------- ---------
--------------------------
SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31 December 2004
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2004 2003 2004
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
-------------------------- --------- --------- ---------
Net cash flow from operating
activities
Operating profit 4,045 2,866 6,527
Depreciation and amortisation 2,593 1,694 3,759
Net movement in working capital (3,352) (1,992) (2,596)
-------------------------- --------- --------- ---------
3,286 2,568 7,690
Returns on investments and servicing (736) (387) (732)
of finance
Tax paid (1,223) (874) (1,653)
Net capital expenditure and financial (1,139) 145 70
investment
Acquisitions (207) - (11,125)
Equity dividends paid (1,468) (1,045) (1,895)
Financing
Issue of shares 51 8 8,912
(Decrease) increase in debt (2,191) (1,687) 2,971
-------------------------- --------- --------- ---------
(Decrease) increase in cash during (3,627) (1,272) 4,238
the period
-------------------------- --------- --------- ---------
Reconciliation to net debt
(Decrease) increase in cash during (3,627) (1,272) 4,238
the period
Increase (decrease) in debt and lease 76 260 (6,231)
financing
-------------------------- --------- --------- ---------
Movement in net debt during the (3,551) (1,012) (1,993)
period
Net debt at beginning of period (14,232) (12,239) (12,239)
-------------------------- --------- --------- ---------
Net debt at end of period (17,783) (13,251) (14,232)
-------------------------- --------- --------- ---------
ANALYSIS OF NET DEBT
Other At
At non 31
1 July Cash cash December
2004 flows items 2004
#'000 #'000 #'000 #'000
---------------------- -------- -------- -------- ---------
Cash and bank balances 4,501 (3,627) - 874
Debt due within one year (1,762) (7,491) (74) (9,327)
Debt due after one year (12,011) 8,365 - (3,646)
Finance leases and hire purchase (4,960) 1,317 (2,041) (5,684)
contracts
---------------------- -------- -------- -------- ---------
Total (14,232) (1,436) (2,115) (17,783)
---------------------- -------- -------- -------- ---------
NOTES TO THE INTERIM FINANCIAL INFORMATION
1. WYG is an international business providing consultancy services to the
built, natural and social environment.
2. The tax charge for the six months ended 31 December 2004 has been calculated
at 34%, the estimated effective tax rate for the year ended 30 June 2005.
3. Adjusted earnings per share is calculated after adding back goodwill
amortisation of #0.93m (2003: #0.44m), giving adjusted earnings of #3.08m (2003:
#2.16m) which are divided by the average number of shares in issue during the
period ranking for dividend of 39,707,534 (2003: 31,021,286).
Earnings per share is calculated on the profit after tax of #2.15m (2003:
#1.72m) and the average number of shares in issue disclosed above.
Diluted earnings per share is calculated by taking the earnings as disclosed
above and the average number of shares that would be issued on the full exercise
of outstanding share options and the issue of shares in respect of deferred
consideration of 40,874,380 (2003: 31,168,089).
4. On 28 February 2005 the Group acquired the entire issued share capital of
Robert Long Consultancy Limited. The initial consideration was #1.85m comprising
#0.74m in cash and 396,288 shares in White Young Green Plc at a market value of
#2.801. Further consideration of up to #0.4m is payable if certain performance
targets are met. The additional consideration will be paid in either shares or
cash at the option of the Group.
On 28 February 2005 the Group also acquired the entire issued share capital of
WynThomasGordonLewis Limited. The initial consideration was #0.78m comprising
#0.35m in cash and 153,517 shares in White Young Green Plc at a market value of
#2.801. Further consideration of up to #0.6m is payable if certain performance
targets are met. The additional consideration will be paid in either shares or
cash at the option of the Group.
5. The interim financial information is prepared on the basis of the accounting
policies set out in the accounts for the year ended 30 June 2004. The interim
financial information is unaudited. The financial information does not
constitute statutory accounts within the meaning of section 240 of the Companies
Act 1985. The financial information relating to the year ended 30 June 2004 is
an extract from the latest published accounts which have been delivered to the
Registrar of Companies; the report of the auditors on these accounts was
unqualified.
6. The interim report will be posted to shareholders on 15 March 2005 and
copies will be available at the Company's registered office at Arndale Court,
Headingley, Leeds LS6 2UJ, or on the Company's website www.wyg.com .
This information is provided by RNS
The company news service from the London Stock Exchange
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