TIDMWHY
RNS Number : 8352N
White Young Green PLC
25 February 2009
+---------------------------------------+---------------------------------------+
| For Immediate Release | 25 February 2009 |
+---------------------------------------+---------------------------------------+
WHITE YOUNG GREEN PLC
Interim results for the six months ended 31 December 2008
White Young Green Plc, consultant to the built, natural and social environment,
announces its interim results for the six months ended 31 December 2008.
Highlights:
* 8% increase in revenue to GBP144.5m (2007: GBP134.1m)
* No change in adjusted profit before tax to GBP9.0m (2007: GBP9.0m)*
* 2% decrease in adjusted earnings per share to 12.8p (2007: 13.1p)*
* Dividend passed to preserve cash
* 6% decrease in net order book to GBP364m (2007: GBP390m)
* Exceptional charge of GBP8m in respect of a provision against work in progress
and debtor balances
* Headcount reduced in first half by 235
* Net debt increased to GBP91.5m (2007: GBP70.6m)
* Operational review and cost reduction initiatives underway
Statutory disclosures:
* Operating profit of GBP0.9m (2007:GBP9.7m)
* Loss before tax of GBP2.1m (2007: profit of GBP7.1m)
* Loss per share of (3.8p) (2007: earnings of 10.3p)
Commenting on the results, Chairman Peter Wood said:
"The Board has reviewed the Group's operations and has taken a number of
decisions to tackle the issues given the current economic climate. These include
a review of the Group work in progress and debtor position and swift and
substantial cost reduction initiatives involving a reduction in headcount and a
streamlining of the business. This cost reduction process has continued into the
second half year. These steps are designed to ensure that the Company emerges
from the current economic downturn fit for purpose with a clear strategy for
future growth."
* adjusted business performance excludes the amortisation of acquired
intangibles and exceptional costs in respect of work in progress and debtor
provisions, employee termination costs and prospective offer costs.
For further information, please contact:
Peter Wood, Chairman
Paul Hamer, Group Managing Director
David Wilton, Group Finance Director
WHITE YOUNG GREEN PLC Tel: (0113) 278 7111
Tim Anderson / Rebecca Skye Dietrich
BUCHANAN COMMUNICATIONS Tel: (020) 7466 5000
CHAIRMAN'S STATEMENT
INTRODUCTION
The six month period to December 2008 has seen trading conditions become
increasingly challenging for WYG, particularly in Ireland but also in the
property development sector of the UK economy. Against this background the Board
has reviewed the Group's operations and has taken a number of decisions to
tackle the issues. These include a review of the Group work in progress and
debtor position and swift and substantial cost reduction initiatives involving a
reduction in headcount and a streamlining of the business. This cost reduction
process has continued into the second half year. These steps are designed to
ensure that the Company emerges from the current economic downturn fit for
purpose with a clear strategy for future growth.
As part of its review of the Group's operations, the Board has implemented
measures to reduce headcount in the first half by 235, which has resulted in
annualised cost savings of cGBP5.7m after redundancy costs of GBP1.6m, with
additional non-payroll savings of GBP2.4m also being made. The increased focus
on the International business after a slowdown in the second half of the last
financial year has resulted in a record order book of EUR97m at December 2008 and
WYG has continued to win business in a number of its key markets and sectors.
RESULTS
In the six months to December 2008, gross revenue grew by 8% to GBP144.5m (2007:
GBP134.1m). Net revenue attributable to in-house services increased by 13% to
GBP123.4m (2007: GBP108.9m). Excluding the contribution from acquisitions made
in the half year to December 2007, organic growth in net revenue was 6% (2007:
21%).
Operating profit before other items which include amortisation of acquired
intangibles and exceptional items increased by 3% to GBP12.1m (2007: GBP11.7m).
Operating profit margin on net revenue fell slightly to 9.8% (2007: 10.7%).
Profit before tax and other items remained static at GBP9.0m (2007: GBP9.0m).
On a statutory basis the Group made a loss before tax of GBP2.1m (2007: profit
of GBP7.1m) reflecting the impact of other items in the period.
Earnings per share adjusted to exclude other items fell by 2% to 12.8p (2007:
13.1p). Although profit after tax before other items at GBP6.7m (2007: GBP6.6m)
was slightly ahead of last year the average number of shares in issue increased
by 3% to 51.8m (2007: 50.3m) following the issue of shares in consideration for
acquisitions in 2007.
Cash generated from operations was GBP3.2m (2007: GBP7.5m). During this
period credit markets have become tighter and clients have found it increasingly
difficult to finance their projects. Therefore, in light of the current market
conditions the Board has undertaken a review of all outstanding work in progress
and debtor balances resulting in an exceptional provision of GBP8m and has put
in place specific initiatives regarding the future management of working capital
across the Group. Following this provision, working capital days in the UK and
Ireland reduced to 100 days (2007: 109 days).
Net debt at 31 December 2008 increased to GBP91.5m (2007: GBP70.6m). As
highlighted in the Group's November 2008 Interim Management Statement, part of
this increase arose because of the additional consideration payments of GBP3.6m
in respect of prior year acquisitions, and normal seasonal factors. However, the
position was exacerbated by the rapid devaluation of Sterling in the final weeks
of December 2008. At the EUR/GBP exchange rate prevailing at 30 June 2008 of
EUR1.26/GBP1, closing net debt at 31 December 2008 would have been some GBP10.7m
less at GBP80.8m.Going forward the Group will review taking appropriate steps to
convert a proportion of its Euro debt into Sterling and continue the focus on
reducing working capital and generating cash. Despite this adverse exchange
rate impact, as at 31 December 2008 the Group remained in full compliance with
its banking covenants.
Since the interim period end, the Sterling/Euro exchange rate has eased to the
benefit of the Group's debt position. In addition, the Group has continued to
focus on vigorous working capital management and cash generation. However, as a
result of the increasingly challenging market conditions, whilst the Group has
headroom in its committed banking facilities, there is a risk that the Group may
breach one of its covenants under its existing banking facilities later this
year. The Group's lenders have been informed of these circumstances and
discussions with them regarding a remedy of a potential breach have commenced.
The Group recognises that, even before this point, the level of debt within the
Group has been a key concern for investors. In this regard, the Group will
explore a range of solutions with its lenders and shareholders to provide the
business with a suitable financing structure for the current environment and
allow all shareholders and customers to have full confidence in the Group going
forward.
DIVIDEND
Given the focus on the need to generate and preserve cash in the current
economic climate it has been decided not to pay a dividend for the financial
year to June 2009, resulting in a cash saving of GBP4.9m compared to the prior
year. As regards future dividend policy the Board intends to target a position
where any dividend is covered at least three times by underlying earnings per
share.
OTHER ITEMS
In order to provide a more meaningful analysis of underlying profits, business
performance measures exclude the amortisation of intangible assets of GBP1.3m
and the exceptional items in respect of the work in progress and debtor
provisions of GBP8m, employee termination costs of GBP1.6m and the costs of
GBP0.3m incurred relevant to the prospective offer for the business.
REVIEW OF OPERATIONS
WYG has reorganised its operations into five business segments, Engineering,
Management Services, Environment Planning Transport, Ireland and International
and will report its results in this format going forward. The business has seen
mixed trading in the first six months of the year with Engineering, Ireland and
International facing a number of different issues. In Engineering the underlying
demand from its traditional private sector customer base has fallen, in
International a short-term slowdown of throughput in Poland has led to a
downturn in performance whilst in Ireland the main issue was the decline in the
overall performance of the economy.
Engineering
Engineering gross revenues grew in the period by 2% to GBP44.5m (2007:
GBP43.5m). Operating profit before other items decreased in the period by 8% to
GBP2.1m (2007: GBP2.3m). Operating margin on net revenue fell to 5% (2007: 6%).
The result in Engineering has been achieved in spite of a significant downturn
in the UK economy. Activity has been particularly poor in commercial property,
housing and general private sector property development. To offset this, demand
from the public sector in the UK has continued to be strong and the business
continues to win significant projects in healthcare and education. Examples
include Northumbria Hospital where WYG has been retained to provide engineering
services for this new build hospital and the government's 'Building Schools for
the Future' programme in the North West and North East. Transport and
Infrastructure is also a key area for Engineering with a number of appointments
being secured in the period from Network Rail including improvements to the
infrastructure in the stations at Edinburgh and Glasgow and in Highways a
further extension to the A453 widening project between M1 Junction 24 and
Nottingham.
Staff numbers have been reduced and further reductions in staff numbers and the
number of satellite offices are expected in the second half of the year.
Management Services
Gross revenues from Management Services grew in the period by 1% to GBP16.1m
(2007: GBP15.9m) all of which was organic. Operating profit before other items
also grew slightly in the period by 6% to GBP2.1m (2007: GBP2.0m). Operating
margin on net revenue increased to 15% (2007: 14%).
In the UK demand in the private commercial development sector has reduced but
this has been more than offset by an excellent public sector performance in
areas such as defence, law and order, education and social housing.
Environment, Planning and Transport ("EPT")
Gross revenues increased in the period by 13% to GBP29.2m (2007: GBP25.7m) of
which 9% was achieved organically. Operating profit before other items increased
by 24% to GBP4.0m (2007: GBP3.2m) and operating margin on net revenue was held
at 15% (2007: 15%).
EPT performed strongly in the first half of the year reflecting the strength of
its client relationships and the long term nature of many of its assignments.
Many clients engaged in seeking planning permission using the planning and
environmental skills of the business have continued to progress their
applications in an effort to underpin land values. Environmental sectors such as
asbestos, ecology, acoustics and waste continue to generate strong demand. In
Planning demand continues from private sector clients such as Sainsbury and
National Grid and from the public sector from local councils and the Department
for Communities and Local Government whilst in Transport Planning the business
is using its excellent reputation to facilitate expansion into the public sector
and international markets.
Ireland
Gross revenues in Ireland increased by 32% to GBP29.9m (2007 : GBP22.7m), all of
which was due to the acquisition of P H McCarthy in October 2007. Operating
profit before other items also increased by 32% to GBP3.7m (2007 : GBP2.8m).
The underlying market in the Irish economy has deteriorated significantly in the
six month period resulting in difficult trading conditions with pressure on both
margins and fee earning opportunities. This deterioration is not yet fully
reflected in the half year results which have been improved by the inclusion of
a full six months results of the P H McCarthy business, acquired in October
2007.
Further reductions in staff numbers and a rationalisation of regional offices
are expected to be made in the second half of the year as the business adjusts
to the reduced level of demand across the economy.
International
Gross revenues in International fell in the period by 6% to GBP24.8m (2007 :
GBP26.2m) and operating profit before other items fell to GBP0.2m (2007 :
GBP1.4m). The slowdown in throughput of work experienced by the International
business in the second half of the last financial year continued to adversely
impact performance into the first quarter. This was particularly relevant in
relation to the business in Poland. However, since that time the order book has
increased to EUR97m at December 2008 with significant project wins secured across
a number of the countries in which the business operates including social
integration in Turkey EUR8.1m, World Trade Organisation commission in Ukraine EUR5m,
S7 road design in Poland EUR1.4m and public administration reform in Romania EUR2m.
The outlook for the second half of the financial year is therefore much more
positive, underpinned by a strong and visible order book.
EMPLOYEES
Total Group headcount has reduced by 235 between 1 July and 31 December 2008. It
is expected to continue to reduce in the half year to 30 June 2009 as the
necessary measures are taken to respond to current market conditions, primarily
impacting the Engineering and Ireland business groups. Throughout this
challenging period for the business and its people, the commitment and
enthusiasm of all staff has been evident, and I take this opportunity to thank
them on behalf of the Board for their continued support.
BOARD OF DIRECTORS
In the past six months Denis Connery, Commercial Director and Lawrie Haynes,
Chief Executive, have left the business. We wish them well in the future.
David Wilton has joined the Board as Finance Director and Bob Hartley has moved
to be Services Director whilst retaining the role of Company Secretary. Paul
Hamer, formerly Chief Operating Officer, has been promoted to Group Managing
Director. I look forward to working with the rest of the Board in the coming
months to steer the business through these challenging times and to emerge fit
for purpose with a clear strategy for future growth.
OUTLOOK
Since the period end, trading conditions have been mixed across the business and
are expected to be more challenging than those experienced in the first half of
the financial year. Priority is therefore focused on right sizing the business
against the changing market place and also, of course, the generation of cash.
In addition it is intended to concentrate on those areas of the business which
enjoy a strong market position including defence, education, healthcare and
infrastructure in both the domestic and international markets. The Board has a
clear view as to what is needed and believes that its revised strategy will
enable the business to tackle the issues in a determined, professional and
timely fashion to ensure that WYG is well placed to take advantage of any future
market upturn.
Unaudited consolidated income statement
For the six months ended 31 December 2008
+--------------------------+------+-----------+--------------+-----------+----------+---------------------------------------+------------+-----------+-----------+----------+
| | | Six months ended 31 December 2008 | | Six months ended 31 December 2007 |
+--------------------------+------+--------------------------------------+----------+---------------------------------------------------------------------------------------+
| | | | | | | | | Year | |
| | | | | | | | | ended | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| | | | | | | | | 30 June | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| | | Before | Other items | | Before | Other | | 2008 | |
| | | | * | | | items * | | | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| | | other | (note 5) | Total | other items* | (note 5) | Total | Total | |
| | | items* | | | | | | | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| | Note | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| Continuing operations | | | | | | | | | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| Revenue | 4 | 144,451 | -- | 144,451 | 134,068 | -- | 134,068 | 282,108 | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| Operating expenses | | (132,383) | (11,135) | (143,518) | (122,389) | (1,937) | (124,326) | (259,906) | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| Operating profit | 4 | 12,068 | (11,135) | 933 | 11,679 | (1,937) | 9,742 | 22,202 | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| Finance costs | | (3,027) | -- | (3,027) | (2,652) | -- | (2,652) | (5,354) | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| Profit/(loss) before tax | | 9,041 | (11,135) | (2,094) | 9,027 | (1,937) | 7,090 | 16,848 | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| Tax | 6 | (2,386) | 2,526 | 140 | (2,456) | 542 | (1,914) | (2,411) | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| Profit/(loss) | | 6,655 | (8,609) | (1,954) | 6,571 | (1,395) | 5,176 | 14,437 | |
| attributable to equity | | | | | | | | | |
| shareholders | | | | | | | | | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| | | | | | | | | | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| Earnings per share | 7 | | | | | | | | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| Basic | | 12.8p | (16.6p) | (3.8p) | 13.1p | (2.8p) | 10.3p | 28.4p | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| Diluted | | 12.8p | (16.6p) | (3.8p) | 12.6p | (2.7p) | 9.9p | 27.3p | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| | | | | | | | | | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| Dividend per share | | | | | | | | | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| Interim - proposed | | -- | -- | -- | 3.2p | -- | 3.2p | 3.2p | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| Final - proposed | | -- | -- | -- | -- | -- | -- | 6.3p | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| | | -- | -- | -- | 3.2p | -- | 3.2p | 9.5p | |
+--------------------------+------+-----------+--------------+-----------+--------------------------------------------------+------------+-----------+-----------+----------+
| Paid | | 6.3p | -- | 6.3p | 5.4p | -- | 5.4p | 8.6p | |
+--------------------------+------+-----------+--------------+-----------+----------+---------------------------------------+------------+-----------+-----------+----------+
Dividends recognised in the period amounted to GBP3.3m (six months ended 31
December 2007: GBP2.7m, year ended 30 June 2008: GBP4.4m). The interim dividend
proposed but not recognised in these interim financial statements amounted to
GBPNil (six months ended 31 December 2007: GBP1.7m).
* "Other items" relate to the amortisation of acquired intangibles and
exceptional costs in respect of work in progress and trade receivables
provisions, employee termination costs and prospective offer costs.
Unaudited consolidated balance sheet
As at 31 December 2008
+--------------------------------------------------------------------+--------------+--------------+-------------+
| | As at | As at | As at |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| | 31 December | 31 December | 30 June |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| | 2008 | 2007 | 2008 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Non-current assets | | | |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Goodwill | 123,206 | 109,412 | 115,625 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Other intangible assets | 14,209 | 17,047 | 15,203 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Property, plant and equipment | 16,788 | 13,373 | 14,517 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Deferred tax assets | 1,209 | 2,886 | 1,933 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Derivative financial instruments | 45 | 183 | 506 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| | 155,457 | 142,901 | 147,784 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Current assets | | | |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Work in progress | 50,478 | 42,112 | 48,041 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Trade and other receivables | 81,230 | 83,925 | 81,621 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Tax recoverable | 2,910 | 1,135 | 2,260 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Cash and cash equivalents | 11,230 | 11,488 | 17,427 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| | 145,848 | 138,660 | 149,349 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Current liabilities | | | |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Trade and other payables | (80,299) | (82,934) | (83,657) |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Current tax liabilities | (186) | (3,255) | (1,490) |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Financial liabilities | (5,423) | (2,210) | (1,756) |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| | (85,908) | (88,399) | (86,903) |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Net current assets | 59,940 | 50,261 | 62,446 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Non-current liabilities | | | |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Financial liabilities | (97,330) | (79,854) | (83,874) |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Retirement benefit obligation | (1,679) | (2,953) | (1,843) |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Deferred tax liabilities | (3,796) | (4,608) | (4,127) |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| | (102,805) | (87,415) | (89,844) |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Net assets | 112,592 | 105,747 | 120,386 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| | | | |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Shareholders' equity | | | |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Share capital | 2,598 | 2,583 | 2,583 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Share premium account | 22,204 | 21,607 | 21,614 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Merger reserve | 51,599 | 51,599 | 51,599 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Hedging and translation reserve | 4,100 | (1,786) | 5,616 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Retained earnings | 32,091 | 31,744 | 38,974 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
| Total shareholders' equity | 112,592 | 105,747 | 120,386 |
+--------------------------------------------------------------------+--------------+--------------+-------------+
Unaudited consolidated cash flow statement
For the six months ended 31 December 2008
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| | | Six months | Six months | Year |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| | | ended | ended | ended |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| | | 31 December | 31 December | 30 June |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| | | 2008 | 2007 | 2008 |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| | Note | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Operating activities | | | | |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Cash generated from operations | 8 | 3,200 | 7,512 | 30,998 |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Interest paid | | (2,345) | (1,874) | (5,304) |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Tax paid | | (1,027) | (2,485) | (4,833) |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Net cash (used in)/generated from operating activities | | (172) | 3,153 | 20,861 |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| | | | | |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Investing activities | | | | |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Proceeds on disposal of property, plant and equipment | | 480 | 149 | 4,247 |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Purchases of property, plant and equipment | | (3,903) | (1,981) | (6,476) |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Purchases of businesses | | (3,600) | (22,073) | (29,538) |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Purchases of intangible assets (computer software) | | (565) | (734) | (1,409) |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Cash balances acquired with businesses | | -- | 1,611 | 1,643 |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Net cash used in investing activities | | (7,588) | (23,028) | (31,533) |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| | | | | |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Financing activities | | | | |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Net proceeds on issue of ordinary share capital | | 605 | 185 | 192 |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Equity dividends paid | | (3,251) | (2,713) | (4,364) |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Repayment of borrowings | | (240) | (323) | (1,242) |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Draw down of loan facilities | | 2,034 | 27,433 | 31,665 |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Repayments of obligations under finance leases | | (1,054) | (1,201) | (6,519) |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Purchase of own shares for Employee Benefit Trust | | (605) | (622) | (622) |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Net cash (used in)/generated from financing activities | | (2,511) | 22,759 | 19,110 |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| | | | | |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Net (decrease)/increase in cash and cash equivalents | | (10,271) | 2,884 | 8,438 |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Cash and cash equivalents at beginning of period | | 17,042 | 8,604 | 8,604 |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
| Cash and cash equivalents at end of period | | 6,771 | 11,488 | 17,042 |
+-------------------------------------------------------------+--------+--------------+--------------+-------------+
Unaudited analysis of changes in net financial liabilities:
for the six months ended 31 December 2008
+-----------------------------------------------+---------+------------+--------------+--------------+-------------+
| | | At | | Other | At |
+-----------------------------------------------+---------+------------+--------------+--------------+-------------+
| | | 1 July | Cash | non cash | 31 December |
+-----------------------------------------------+---------+------------+--------------+--------------+-------------+
| | | 2008 | flows | items | 2008 |
+-----------------------------------------------+---------+------------+--------------+--------------+-------------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------------------+---------+------------+--------------+--------------+-------------+
| Cash and cash equivalents | | 17,427 | (8,520) | 2,323 | 11,230 |
+-----------------------------------------------+---------+------------+--------------+--------------+-------------+
| Bank overdrafts | | (385) | (4,074) | -- | (4,459) |
+-----------------------------------------------+---------+------------+--------------+--------------+-------------+
| Bank loans due after one year | | (82,592) | (2,034) | (11,850) | (96,476) |
+-----------------------------------------------+---------+------------+--------------+--------------+-------------+
| Loan notes due within one year | | (240) | 240 | -- | -- |
+-----------------------------------------------+---------+------------+--------------+--------------+-------------+
| Finance leases and hire purchase contracts | | (2,413) | 1,054 | (459) | (1,818) |
+-----------------------------------------------+---------+------------+--------------+--------------+-------------+
| Total | | (68,203) | (13,334) | (9,986) | (91,523) |
+-----------------------------------------------+---------+------------+--------------+--------------+-------------+
Unaudited consolidated statement of recognised income and expense
For the six months ended 31 December 2008
+--------------------------------------------------------------+---------------+-----------------+---------------+
| | Six months | Six months | Year |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| | ended | ended | ended |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| | 31 December | 31 December | 30 June |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| | 2008 | 2007 | 2008 |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| (Loss)/profit attributable to equity shareholders | (1,954) | 5,176 | 14,437 |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| Net exchange adjustments offset in reserves net of tax | (1,055) | (977) | 6,102 |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| Actuarial gains on defined benefit pension schemes | -- | -- | 584 |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| (Losses)/gains on cash flow hedges | (461) | (122) | 201 |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| Tax on items taken directly to equity | (192) | 55 | (525) |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| Total recognised income and expense for the period | (3,662) | 4,132 | 20,799 |
+--------------------------------------------------------------+---------------+-----------------+---------------+
Unaudited consolidated statement of changes in shareholders' equity
For the six months ended 31 December 2008
+--------------------------------------------------------------+---------------+-----------------+---------------+
| | Six months | Six months | Year |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| | ended | ended | ended |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| | 31 December | 31 December | 30 June |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| | 2008 | 2007 | 2008 |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| (Loss)/profit attributable to equity shareholders | (1,954) | 5,176 | 14,437 |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| Net exchange adjustments offset in reserves net of tax | (1,055) | (977) | 6,102 |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| Actuarial gains on defined benefit pension schemes | -- | -- | 584 |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| (Losses)/gains on cash flow hedges | (461) | (122) | 201 |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| Share-based payments | (1,486) | 142 | (242) |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| New share capital issued, net of expenses | 605 | 15,257 | 15,264 |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| Tax on items taken directly to equity | (192) | 55 | (525) |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| Equity dividends paid | (3,251) | (2,713) | (4,364) |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| Net (reduction in)/addition to shareholders' equity | (7,794) | 16,818 | 31,457 |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| Equity attributable to equity shareholders of the Company at | 120,386 | 88,929 | 88,929 |
| beginning of the period | | | |
+--------------------------------------------------------------+---------------+-----------------+---------------+
| Equity attributable to equity shareholders of the Company at | 112,592 | 105,747 | 120,386 |
| end of the period | | | |
+--------------------------------------------------------------+---------------+-----------------+---------------+
Notes to the unaudited interim results
For the six months ended 31 December 2008
1. Company details
WYG is an international business providing consultancy services to the built,
natural and social environment.
2. General information
The Interim Financial Report 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 2008 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.
3. Accounting policies
The Interim Financial Report has been prepared in accordance with International
Financial Reporting Standards ("IFRS") as adopted by the European Union. The
same accounting policies and methods of computation are followed in the interim
financial statements as the latest published audited accounts, which are
available on the Company's website at www.wyg.com with the exception of IFRS8
"Operating Segments" where the Group has chosen to early adopt the provisions of
IFRS8. IFRS8 replaces IAS14 "Segment Reporting" and requires a 'Management
Approach' under which segment information is presented on the same basis as that
used for internal reporting purposes. The Interim Financial Report has been
prepared in accordance with the Disclosure and Transparency Rules of the
Financial Services Authority and with IAS 34 (Interim Financial Reporting) as
adopted by the European Union.
4. Segmental information
For management purposes, the Group is currently organised into five operating
business segments - Engineering, Management Services, Environment Planning
Transport, Ireland and International. These business segments are the basis on
which the Group reports its segment information.
The segment results for the six months ended 31 December 2008 are as follows:
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| | Engineering | Management | Environment | Ireland | International | Group |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| | | Services | Planning | | | |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| | | | Transport | | | |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Revenue | | | | | | |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| External sales | 44,772 | 16,143 | 29,232 | 30,593 | 24,751 | 145,491 |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Inter-segment sales | (245) | (58) | (14) | (723) | -- | (1,040) |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Total revenue | 44,527 | 16,085 | 29,218 | 29,870 | 24,751 | 144,451 |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| | | | | | | |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Result | | | | | | |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Operating profit before other | 2,081 | 2,080 | 3,999 | 3,698 | 210 | 12,068 |
| items | | | | | | |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Other items (Note 5) | (2,717) | (757) | (1,021) | (5,131) | (1,509) | (11,135) |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Operating (loss)/profit | (636) | 1,323 | 2,978 | (1,433) | (1,299) | 933 |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Finance costs | | | | | | (3,027) |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Loss before tax | | | | | | (2,094) |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Tax | | | | | | 140 |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Loss attributable to equity | | | | | | (1,954) |
| shareholders | | | | | | |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
4. Segmental information continued
The segment results for the six months ended 31 December 2007 are as follows:
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| | Engineering | Management | Environment | Ireland | International | Group |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| | | Services | Planning | | | |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| | | | Transport | | | |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Revenue | | | | | | |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| External sales | 45,545 | 16,382 | 26,116 | 23,473 | 26,227 | 137,743 |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Inter-segment sales | (2,060) | (451) | (369) | (795) | -- | (3,675) |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Total revenue | 43,485 | 15,931 | 25,747 | 22,678 | 26,227 | 134,068 |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| | | | | | | |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Result | | | | | | |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Operating profit before other | 2,271 | 1,966 | 3,236 | 2,800 | 1,406 | 11,679 |
| items | | | | | | |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Other items (Note 5) | (394) | (239) | (589) | (657) | (58) | (1,937) |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Operating profit | 1,877 | 1,727 | 2,647 | 2,143 | 1,348 | 9,742 |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Finance costs | | | | | | (2,652) |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Profit before tax | | | | | | 7,090 |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Tax | | | | | | (1,914) |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
| Profit attributable to equity | | | | | | 5,176 |
| shareholders | | | | | | |
+-----------------------------------+-------------+-------------+-------------+----------+---------------+----------+
5. Other items
+--------------------------------------------------------------+----------------+--------------+--------------+
| | | Six months | Six months |
+--------------------------------------------------------------+----------------+--------------+--------------+
| | | ended | ended |
+--------------------------------------------------------------+----------------+--------------+--------------+
| | | 31 December | 31 December |
+--------------------------------------------------------------+----------------+--------------+--------------+
| | | 2008 | 2007 |
+--------------------------------------------------------------+----------------+--------------+--------------+
| | | GBP'000 | GBP'000 |
+--------------------------------------------------------------+----------------+--------------+--------------+
| Amortisation of acquired intangibles | | 1,301 | 1,937 |
+--------------------------------------------------------------+----------------+--------------+--------------+
| Exceptional costs | | | |
+--------------------------------------------------------------+----------------+--------------+--------------+
| - Work in progress and trade receivables provisions | | 8,000 | -- |
+--------------------------------------------------------------+----------------+--------------+--------------+
| - Employee termination costs | | 1,566 | -- |
+--------------------------------------------------------------+----------------+--------------+--------------+
| - Prospective offer costs | | 268 | -- |
+--------------------------------------------------------------+----------------+--------------+--------------+
| Total other items | | 11,135 | 1,937 |
+--------------------------------------------------------------+----------------+--------------+--------------+
6. Tax
The tax charge before other items for the six months ended 31 December 2008 has
been calculated at 26%, the estimated effective tax rate for the year ended 30
June 2009.
7. Earnings per share
Adjusted earnings per share is calculated after adding back acquired intangible
asset amortisation and exceptional costs in respect of work in progress and
trade receivables provisions, employee termination costs and prospective offer
costs after tax of GBP8.61m (2007: GBP1.40m), giving adjusted earnings of
GBP6.66m (2007: GBP6.57m) which are divided by the average number of shares in
issue during the period ranking for dividend of 51,800,522 (2007: 50,302,601).
Earnings per share is calculated on the loss after tax of GBP1.95m (2007: profit
after tax of GBP5.18m) 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 51,813,462 (2007: 52,328,566).
8. Cash generated from operations
+------+-------------+----------------------+-------------+------------+--------------+
| | | Six months | Six months | Year |
+--------------------+----------------------+-------------+------------+--------------+
| | | ended | ended | ended |
+--------------------+----------------------+-------------+------------+--------------+
| | | 31 December | 31 | 30 June |
| | | | December | |
+--------------------+----------------------+-------------+------------+--------------+
| | | 2008 | 2007 | 2008 |
+--------------------+----------------------+-------------+------------+--------------+
| | | GBP'000 | GBP'000 | GBP'000 |
+--------------------+----------------------+-------------+------------+--------------+
| Profit from | | 933 | 9,742 | 22,202 |
| operations | | | | |
+--------------------+----------------------+-------------+------------+--------------+
| Adjustments for: | | | | |
+--------------------+----------------------+-------------+------------+--------------+
| | Depreciation of property, plant | 2,084 | 2,137 | 4,652 |
| | and equipment | | | |
+------+------------------------------------+-------------+------------+--------------+
| | Amortisation of intangible assets | 1,877 | 2,404 | 5,249 |
+------+------------------------------------+-------------+------------+--------------+
| | Loss/(profit) on disposal of | 18 | (24) | (858) |
| | property, plant and equipment | | | |
+------+------------------------------------+-------------+------------+--------------+
| | Share options (credit)/charge | (742) | 856 | 1,214 |
+------+------------------------------------+-------------+------------+--------------+
| Operating cash | | 4,170 | 15,115 | 32,459 |
| flows before | | | | |
| movements in | | | | |
| working capital | | | | |
+--------------------+----------------------+-------------+------------+--------------+
| | Decrease/(increase) in inventories | 2,489 | (1,875) | (4,666) |
+------+------------------------------------+-------------+------------+--------------+
| | Decrease/(increase) in receivables | 5,890 | (11,383) | (5,648) |
+------+------------------------------------+-------------+------------+--------------+
| | (Decrease)/increase in payables | (9,349) | 5,655 | 8,853 |
+------+------------------------------------+-------------+------------+--------------+
| Cash generated | | 3,200 | 7,512 | 30,998 |
| from operations | | | | |
+------+-------------+----------------------+-------------+------------+--------------+
9. Availability of interim report
The Interim Report will be posted to shareholders on Thursday 12 March 2009 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
END
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