TIDMWYG
RNS Number : 5330Y
WYG Plc
02 December 2014
2(nd) December 2014
WYG plc ("WYG" or the "Group")
Half Year Report
Strong profit and order book growth with further improvement
expected in the second half of the year
WYG, the global programme, project management and technical
consultancy, announces its half year results for the six months
ended 30 September 2014.
Financial highlights:
Strong profit growth on revenues marginally up from second half
of financial year 2014
-- Revenue* of GBP63.2m (H1 2013: GBP63.9m; H2 2014: GBP63.0m)
-- Operating profit** up 20% to GBP2.1m (H1 2013: GBP1.7m)
-- Adjusted profit before tax** up 35% to GBP1.9m (H1 2013: GBP1.4m)
-- Loss before tax of GBP0.4m (H1 2013: GBP0.7m)
-- Adjusted** earnings per share of 2.9p (H1 2013: 1.8p)
-- Resumption of interimdividend at 0.3p per Ordinary Share (2013: nil)
-- Unrestricted cash after investments as at 30 September 2014 of GBP6.6m (H1 2013: GBP12.5m)
*Including share of Joint Venture revenues
**Before separately disclosed items
Operational highlights:
Strong underlying growth offset by delayed approval of EU
Budget
-- 13% increase in UK revenue to GBP40.0m driven by buoyant
infrastructure and planning markets
-- Strong contract wins in EEA and MENA following
diversification strategy; revenue held back by EU Budget hiatus
(Budget was finally approved in December 2013)
-- Prior period focus on quality revenues underpinned improvement in Group profitability
-- Acquisition of Alliance Environment and Planning Limited
(Alliance Planning) creates one of the largest planning businesses
in the UK
Post period end and Outlook:
-- Trading since the half year end is in line with management's upwardly revised expectations
-- Order book increased by 10% to GBP95.5m at 30 September 2014 (31 March 2014: GBP86.8m)
-- Success with key clients and major frameworks underpins future revenue expectations
-- Won 6 of 7 targeted major frameworks in the UK; potentially
delivering over GBP100m of revenue over next 3-7 years
-- International development opportunities have grown post period end
-- EUR130m estimated pipeline of project opportunities in
pre-accession countries following EU budget approval
-- Strong pipeline across Africa following significant increases
in DFID and EuropeAid budgets for the region
Paul Hamer, Chief Executive Officer of WYG, said:
"We have enjoyed a very positive first half. Building on last
year's momentum, the UK has performed particularly well and we have
retained or won the overwhelming majority of the key framework
agreements that we have bid for, which are expected to generate a
substantial proportion of our revenues over the next 2 to 3
years.
"We have also won a number of important new international
contracts, significantly improved our order book, and further
strengthened our business through acquisitions and investments.
"We are already seeing an acceleration of international
development opportunities and the benefits of the approval of the
EU Budget during the second half of the year, creating almost more
opportunity than WYG can service so we continue to place a strong
emphasis on the formation of strategic partnerships and identifying
select acquisitions which can contribute to the Group's strategic
ambitions.
"Overall, we are pleased with the improvement in profitability
so far. The strong order book growth we are beginning to see allows
us to be confident about WYG's long term prospects."
For further information, please contact:
WYG plc Tel: +44 (0) 113 278 7111
Paul Hamer, Chief Executive Officer
Sean Cummins, Group Finance Director
MHP Communications Tel: +44 (0) 203 128 8100
John Olsen / Katie Hunt / Vicky Watkins / Ollie Hoare
N+1 Singer Tel: +44 (0) 207 496 3000
Sandy Fraser / Richard Lindley
WH Ireland Limited Tel: +44 (0) 113 394 6600
Andrew Kitchingman / Liam Gribben
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report that we have enjoyed another very
positive start to the year. As predicted, revenue in the first half
of the year was in line with the corresponding period last year
with a continued steady improvement in operating profit, reflecting
our focus on quality revenues, and our order book is growing
strongly. Trading since the period end has been in line with the
recently upgraded market expectations for the full year and we are
already starting to see an expected acceleration of international
development opportunities in the second half.
In the UK, we are benefitting from the renewed confidence in our
core markets. This market is primarily focused on asset creation
working alongside our clients to help them transform their visions
into reality. The business has seen a significant increase in
revenue, profitability and its pipeline of opportunities, resulting
largely from the resurgent activity in the construction and house
building sector. We have also retained or won the overwhelming
majority of the key framework agreements that we have bid for and
we expect these frameworks to sustain a substantial proportion of
our activity over the next two to three years. It is becoming
apparent that with the improvement in confidence in our markets the
potential value of contracts to be let under the frameworks is
increasing.
Significant wins in the half year include the award of a place
on the MOD's four year Principal Support Provider framework for
services to the Defence Infrastructure Organisation. Under this
framework alone we have won, submitted or are in the process of
submitting 11 tenders with a capital value of GBP500m and potential
fees of approximately GBP15m. Recently, we have also been appointed
to the Homes & Communities Agency's four year multidisciplinary
framework and, based on previous experience, expect to win a number
of major projects during the life of the contract.
As previously announced, we acquired Alliance Planning on 10
September 2014, creating one of the largest planning businesses in
the UK. This acquisition is in line with our strategy of growing
quality revenues particularly in our strategic front-end client
offering. For the year ended 31 July 2014, Alliance Planning
reported turnover of GBP3.3m (2013: GBP2.7m) and profit before
taxation (and before the remuneration of its owner-directors) of
GBP0.8m (2013: GBP0.5m). The acquisition will be immediately
earnings enhancing.
Our international development business is broadly divided into:
social development (including poverty alleviation, climate change,
resilience, policy development, agriculture, water &
wastewater) and we continue to be a leader in the provision of such
technical assistance in this market; and work supporting UK and
other government agencies in rebuilding fragile and conflict
affected states (FCAS).
We have felt some impact from the delay in signing the seven
year EU budget which was finally approved in December 2013 with a
programme volume of EUR940bn. Consequently, revenue during the
first half was lower than expected, however, we have maintained
operating profit levels and the shift in timing has also led to a
significant increase in new work being bid for delivery in 2015 to
2020. Given that WYG is a market-leader in both Turkey and South
Eastern Europe where 70% of the EUR11.7bn funding dedicated to
pre-accession reform will be spent and based on our excellent track
record of winning major work programmes, we believe that we are
strongly positioned to win a substantial proportion of what we bid
for, especially in the field of pre-accession work. We have, to
date, identified a pipeline of specific projects across these
geographies with total potential fees in excess of EUR130m which we
are now focused on winning.
Our FCAS work continues to grow as we work closely with the UK's
Ministry of Defence, Foreign & Commonwealth Office and
Department for International Development (DFID) and EuropeAid. Both
DFID and EuropeAid have significantly increased budgets for Africa
where we also deliver projects for the World Bank, European
Investment Bank and other International Finance Institutions.
Delivery of our Security and Justice project in Libya is, for the
time being, on a much-reduced scale whilst the geo-political
situation is reappraised. We were able to complete our work on the
inception phase and currently no additional work is included in our
stated order book. Across Africa as a whole, we have a strong order
book and pipeline and are currently delivering 31 projects in 20
countries.
We have also won a number of important new international
contracts, notably our appointment as a key partner in a consortium
led by Amec Foster Wheeler to support the development of Poland's
first nuclear power plant. The contract, which was signed in
November 2014, will be worth a minimum of GBP6.2m to WYG over the
next three years, rising to up to GBP35m if all optional work is
undertaken over the next 10 years.
Given the opportunities that the Group has, we have continued to
make investments in line with our growth initiatives strategy,
including completing a number of senior hires to extend our
offering and business winning capability in areas such as FCAS. We
have also been able to invest in new programmes to enhance our
leadership and management skills, particularly at the graduate
entry level, further upgrades to our IT hardware and software, and
the wider rollout of our project management programme.
Whilst we maintain a flexible resource structure in
international markets, using local relationships and expertise as
required, we have also increased Group headcount during the first
half of the financial year to 1,424 (31 March 2014: 1,255)
reflecting the significant increase in demand for our services.
Strategy
Since the financial restructuring was completed in July 2011,
WYG has achieved a turnaround in profitability and is now well
positioned for growth. Our focus on delivering shareholder value
and driving growth throughout the business is unchanged and our
progress is now bolstered by a strengthened financial basis and the
investments we have made. We continue to seek to leverage our
existing market positions and client relationships to gain access
to new markets. We aim to make the most of our people's unique
skills and expertise to address and solve a number of select global
challenges:
-- Fragile States and Stabilisation - working with government
and donor clients to create stability and facilitate post-conflict
restructuring across many fragile states;
-- Preserving the Global Environment - ensuring that the world's
growing population is served with the necessary energy and water
infrastructure whilst minimising carbon impact and climate change.
This challenge is faced by developed, emerging and third-world
economies alike; and
-- Urban Development and Connected Cities - developing
infrastructure related to population expansion, urbanisation and
transportation as the world seeks to become super-connected.
We are creating almost more opportunity than we can service
directly so we continue to place a strong emphasis on the formation
of strategic partnerships and identifying acquisitions which can
contribute to the Group's strategic ambitions.
Results
Gross revenue (including share of Joint Venture revenues) was,
as expected, stable at GBP63.2m (H1 2013: GBP63.9m) during the
period. This comprises a GBP4.6m increase in UK revenue offset by
the decrease in our international revenue largely due to the hiatus
caused by the delay in signing the new EU budget.
Operating profit performance continues to improve with the Group
making an operating profit before separately disclosed items of
GBP2.1m (H1 2013: profit of GBP1.7m) and an adjusted profit before
tax of GBP1.9m (H1 2013: GBP1.4m). On a statutory basis, the Group
made a loss before tax of GBP0.4m (H1 2013: GBP0.7m) on
pre-joint-venture revenues of GBP62.3m (H1 2013: GBP63.9m).
Earnings per share adjusted to exclude separately disclosed
items was 2.9p (H1 2013: 1.8p).
The Group closed the period with unrestricted cash of GBP6.6m
(H1 2013: GBP12.5m) and net cash at 30 September 2014 of GBP8.4m
(H1 2013: GBP15.8m), reflecting a further payment in respect of the
investment in Upper Quartile LLP, the initial cash consideration
for the acquisition of Alliance Planning and mobilisation on a
number of large scale projects. With our continued focus on cash
generation and the effective management of working capital, we
expect cash balances to recover in the second half. We have
continued to reduce the number and total value of outstanding
legacy bonds ahead of plan and now expect them all to have been
closed out by the end of the calendar year. We are managing
carefully our utilisation of the new trade finance facility with
Santander, which enables us to provide bonds at a more commercially
viable level than before.
Dividend
We were very pleased that, with shareholder approval in
September 2014, we were able to resume the payment of dividends for
the first time since 2008.
For the current period, based on our improved results and strong
balance sheet, the Board has decided that it is appropriate to
approve an interim dividend of 0.3p per Ordinary Share (30
September 2013: nil). The interim dividend will be paid on 23
January 2015 to shareholders on the register on 30 December 2014
and WYG shares will trade ex-dividend on 29 December 2014.
Outlook
In the UK, we have performed strongly, building on the
Government's continuing investment in major infrastructure projects
and the re-invigoration of the construction and house building
sectors which directly benefits our core, front-end disciplines of
planning and development.
Overseas, a rapidly growing order book indicates that the impact
of the delayed EU budget approval has now passed, meaning that we
expect to see revenue grow in the second half of the year. We
continue to make good progress diversifying into fragile and
developing states and we anticipate good levels of growth,
particularly in Africa building on the investments we have made in
that region in the past 18 months.
We continue to look at a range of opportunities, both in the UK
and internationally, to invest organically and through selective
acquisitions made possible by the Group's improving profit and cash
position. WYG is now a well-diversified Group with a robust
financial base and strong market positions in the geographies and
sectors in which it operates.
Mike McTighe
Chairman
2 December 2014
BUSINESS REVIEW
Operationally, the Group is structured, and reports, on a
regional basis as described below. In a change from previous years,
central overheads are now reported as a separate item in the
segmental analysis.
UK (63% of Group Revenue)
The UK region generated revenue of GBP40.0m (H1 2013: GBP35.4m)
with an operating profit before separately disclosed items and
central overheads of GBP2.7m (H1 2013: GBP2.2m).
The UK region has continued to grow in the first half of the
year. Growth has been strongest in our targeted sectors: the
residential sector in particular has driven demand for all of our
services and our defence business continues to grow. We have
secured a place on the MOD's Defence Infrastructure Organisations
Principal Support Provider framework for the next four years. This
is expected to include major programmes of work on the MOD's
property estate throughout the UK.
As previously reported, in order to underpin our continuing
growth in the UK region, we have targeted a number of key
frameworks, from both our largest current clients and a selected
number of new clients. We have been successful in six of the seven
targeted frameworks, potentially delivering in excess of GBP100m of
future revenue over the next three to seven years.
These frameworks include: Sainsbury's Planning Framework, the
NHS Shared Business Service for the provision of construction
consultancy services, Transport for London for the design and
implementation of traffic signal schemes, and a number of
nationwide contracts for asbestos consultancy with clients such as
Royal Mail, Local Government Shared Services, and Surrey County
Council. Together they are expected to generate significant
revenues across all of our services.
Our focus on retaining and winning key frameworks and the
strategic targeting of clients and projects has resulted in
significant order book growth in the first half of the year. The UK
region's closing order book of GBP50.0m is more than 28% higher
than at the end of our first half last year, and GBP5.0m above that
reported at March 2014.
On 10 September 2014 we acquired Alliance Planning. This
targeted acquisition supports our strategy to focus growth in our
front end, niche services and makes us one of the biggest planning
practices in the UK, strengthening both the geographic and sector
diversity of our planning business.
Our people remain absolutely key to our success and we continue
to develop strategies to improve our ability to retain and attract
key staff. Headcount in the UK continues to grow and we anticipate
further expansion through to the end of the year.
Europe, Africa and Asia (EAA) (25% of Group Revenue)
In this region WYG operates through four sub-regional business
units - Central and Eastern Europe (CEE), South East Europe (SEE),
Africa and Asia. In the period the EAA region generated revenue
(including share of Joint Venture revenues) of GBP15.6m (H1 2013:
GBP19.8m), with an operating profit before separately disclosed
items and central overheadsof GBP0.7m (H1 2013: GBP1.2m).
The CEE business unit continued to provide management, training,
planning, engineering and environmental services to public and
private sector clients. During the period we were proud to announce
our participation in the winning bid, led by Amec Foster Wheeler,
for the owner's engineer/technical adviser on the nuclear new build
project in Poland. Within this contract WYG will be an important
part of the team providing support to PGE EJ1 in implementing the
planned integrated proceedings for the selection of the technology
vendor, construction, fuel supply and disposal, operator and
strategic partner for the first 3000 megawatt nuclear power plant
in the country.
In SEE, WYG continued its successful involvement in the
Infrastructure Projects Facility (IPF) programme, being a member of
the winning consortium for the newest, fourth phase (IPF4) of this
major development project, which is implemented throughout the
whole region. WYG also benefited from its localization strategy in
Croatia where, due to our up-front investment and pre-positioning,
we have emerged as a leading consultancy providing services
supporting our clients in accessing the financing now made
available in that country through the Structural and Cohesion Fund
instruments.
Important developments took place in our Africa business unit,
which was significantly strengthened with the acquisition of Delta
Partnership Solutions Limited (Delta) in March 2014. Delta is a
specialist development consultancy, which we are now using as one
of the platforms to drive our expansion in this market. Our work on
the recently extended GBP18m Climate Resilient Infrastructure
Development Facility in Southern Africa has been recognized with
the award of 'Overseas Project of the Year' by the Association for
Project Management.
With participation in the important DFID Security, Justice and
Defense contract in Libya, WYG has once again proved its ability
not only to win and deliver work in the most difficult FCAS
environments, but also our flexibility and sector-leading duty of
care solutions necessary to respond to changing clients' needs and
security issues in the face of a rapidly deteriorating in-country
situation.
In Asia, WYG continued to deliver a portfolio of multi-sector
projects, with targeted business development throughout the region,
and opportunities especially around the public financial management
sector. The WYG Russian business, operating as a collaborative
joint venture, delivered a steady stream of engineering and
consultancy services to the mining sector.
The current period has brought the benefits to WYG of the
earlier measures taken to diversify the business, so as to
supplement its leading position on the European Union aid and
Structural and Cohesion Funds markets, with other aid (especially
DFID) and national public and private sector clients and targeted
acquisitions. Since 1 January 2014, excluding the nuclear new build
project in Poland, we have increased our order book from GBP32.9m
to GBP34.4m. This has allowed the region to minimize the effect of
the slow-down resulting from delays in the transition from the
2007-2013 to the 2014-2020 EU funding cycles. Following market
development initiatives, Africa is now a major region of growth and
our specialist FCAS skills and solutions will now be further
leveraged for further market expansion.
MENA (12% of Group Revenue)
The MENA region (which includes Turkey) contributed revenue of
GBP7.5m (H1 2013: GBP8.8m) with an operating profit before
separately disclosed items and central overheads of GBP0.6m (H1
2013: GBP0.2m).
Our three major water and wastewater projects assisting the
Turkish Ministry of Environment in the supervision and design of
water and wastewater infrastructure to meet EU environmental
standards, in Ordu, Siverek and Bulancak, are progressing well. In
Ordu and Siverek, the construction of the wastewater treatment
plants, which are the major components of the investment, have been
completed and handed over. In Ordu and Bulancak the design and
tender dossiers for the construction of the wastewater network have
been completed by our teams and the related works tender procedures
are ongoing, while in Siverek construction has now started.
In the period, we have won several major new framework contracts
for Turkish government ministries and municipalities and, as we
look to diversify and strengthen our presence outside the water and
wastewater sector, we are pursuing opportunities in environmental
fields such as solid waste, groundwater and marine pollution. We
have recently been shortlisted for an EU project to provide
technical assistance to a significant transport programme. In the
private sector, following last year's UK-Turkey Healthcare event
held by UKTI and British Expertise (and sponsored by WYG), we have
been shortlisted by two major contractors to advise on high
biosecurity laboratories and Environmental/ Social Impact
Assessment services for their large health campus projects.
The six months to 30 September also proved successful for our
socio-economic teams who have completed three large scale projects
in the human resources development and employment sectors and are
currently implementing seven major projects in diversified sectors
not only in Turkey but also in Egypt. The team has won five new
contracts contributing to an overall increase of 25% in the MENA
region order book from GBP8.9m to GBP11.1m since 31 March 2014.
Although our work in Afghanistan has come to an end, our skills
and knowledge in this area have been further recognised as we are
now supporting the British Army's Royal Engineers in their ongoing
overseas projects in Bahrain and Saudi Arabia.
Overall, whilst the MENA region has experienced a short period
of declining revenue as a result of the tender processes for
projects being extended, we are now seeing activity pick up rapidly
on the projects we have recently won and expect that in 2015 our
recent run of successful bidding activity will enable us to return
to previous levels of activity, with good momentum into the
following year.
Unaudited consolidated income statement
For the six months ended 30 September 2014
Six months
Six months ended 30 Year ended
ended 30 September September 31 March 2014
2014 2013 Audited
Notes GBP'000 GBP'000 GBP'000
---------------------------------- ----- ------------------- ------------------ --------------
Continuing operations
Revenue including share of joint
venture revenues 63,185 63,890 126,914
Less share of joint venture
revenues (891) - -
---------------------------------- ----- ------------------- ------------------ --------------
Revenue 5 62,294 63,890 126,914
Operating expenses (62,805) (64,337) (124,560)
Share of result of joint ventures 244 - -
---------------------------------- ----- ------------------- ------------------ --------------
Operating (loss)/profit* (267) (447) 2,354
Finance costs 6 (149) (296) (577)
---------------------------------- ----- ------------------- ------------------ --------------
(Loss)/profit before tax (416) (743) 1,777
Tax credit/(charge) 7 51 (219) 284
---------------------------------- ----- ------------------- ------------------ --------------
(Loss)/profit for the period (365) (962) 2,061
---------------------------------- ----- ------------------- ------------------ --------------
(Loss)/profit attributable to:
Owners of the parent (431) (959) 2,053
Non controlling interests 66 (3) 8
---------------------------------- ----- ------------------- ------------------ --------------
(365) (962) 2,061
---------------------------------- ----- ------------------- ------------------ --------------
(Loss)/earnings per share 8
Basic (0.7p) (1.5p) 3.2p
---------------------------------- ----- ------------------- ------------------ --------------
Diluted (0.7p) (1.5p) 2.9p
---------------------------------- ----- ------------------- ------------------ --------------
* Operating loss 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 2014
Six months Six months
ended 30 ended 30 Year to
September September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
--------------------------------------- ---------- ---------- ---------
(Loss)/profit for the period (365) (962) 2,061
---------------------------------------- ---------- ---------- ---------
Other comprehensive (expense)/income:
Currency translation differences (734) (40) (680)
Tax on items taken directly to equity* - (47) -
Dividend payable (note 9) (332)
Remeasurement of net defined pension
liability* (14) 203 (175)
Other comprehensive (expense)/income
for the period (1,080) 116 (855)
---------------------------------------- ---------- ---------- ---------
Total comprehensive (expense)/income
for the period (1,445) (846) 1,206
---------------------------------------- ---------- ---------- ---------
Total comprehensive (expense)/income
attributable to:
Owners of the parent (1,511) (843) 1,198
Non controlling interests 66 (3) 8
-------------------------------------- ------- ----- -----
(1,445) (846) 1,206
------------------------------------- ------- ----- -----
*These items will not be reclassified subsequently to profit or
loss.
Unaudited consolidated balance sheet
As at 30 September 2014
As at As at As at
30 September 30 September 31 March
2014 2013 2014
Notes GBP'000 GBP'000 GBP'000
---------------------------------- ----- ------------- ------------- ---------
Non-current assets
Goodwill 11 13,545 11,785 12,796
Other intangible assets 12 5,759 5,003 4,802
Property, plant and equipment 12 2,462 2,077 2,242
Investments in Joint Ventures 249 - -
22,015 18,865 19,840
---------------------------------- ----- ------------- ------------- ---------
Current assets
Work in progress 21,890 26,647 21,563
Trade and other receivables 26,266 22,317 22,532
Tax recoverable 48 103 69
Cash and cash equivalents 8,507 16,931 15,857
---------------------------------- ----- ------------- ------------- ---------
56,711 65,998 60,021
---------------------------------- ----- ------------- ------------- ---------
Current liabilities
Trade and other payables (42,678) (45,371) (41,337)
Current tax liabilities (976) (708) (924)
Financial liabilities 14 (138) (1,134) (662)
---------------------------------- ----- ------------- ------------- ---------
(43,792) (47,213) (42,923)
---------------------------------- ----- ------------- ------------- ---------
Net current assets 12,919 18,785 17,098
---------------------------------- ----- ------------- ------------- ---------
Non-current liabilities
Financial liabilities 14 (484) (395) (454)
Retirement benefit obligation (2,848) (3,293) (3,306)
Deferred tax liabilities (1,025) (1,364) (1,107)
Provisions, liabilities and
other charges 13 (10,373) (15,926) (11,984)
---------------------------------- ----- ------------- ------------- ---------
(14,730) (20,978) (16,851)
---------------------------------- ----- ------------- ------------- ---------
Net assets 20,204 16,672 20,087
---------------------------------- ----- ------------- ------------- ---------
Equity attributable to the owners
of the parent
Share capital 72 70 70
Hedging and translation reserve 644 2,018 1,378
Retained earnings 19,164 14,337 18,381
---------------------------------- ----- ------------- ------------- ---------
19,880 16,425 19,829
Non controlling interest 324 247 258
---------------------------------- ----- ------------- ------------- ---------
Total equity 20,204 16,672 20,087
---------------------------------- ----- ------------- ------------- ---------
Unaudited consolidated statement of changes in shareholders'
equity
For the six months ended 30 September 2013
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 2013 70 2,058 14,310 16,438 - 16,438
Loss for the period - - (959) (959) (3) (962)
-------------------------------------- -------- ------------ ---------- ------- ----------------- --------
Other comprehensive (expense)/income:
Currency translation differences - (40) - (40) - (40)
Tax on items taken directly
to equity - - (47) (47) - (47)
Remeasurement of net defined
pension liability - - 203 203 - 203
Other comprehensive (expense)/income
for the period - (40) 156 116 - 116
-------------------------------------- -------- ------------ ---------- ------- ----------------- --------
Total comprehensive expense
for the period - (40) (803) (843) (3) (846)
-------------------------------------- -------- ------------ ---------- ------- ----------------- --------
Share based payments - - 1,225 1,225 - 1,225
Arising on acquisition
of subsidiary - - (395) (395) 250 (145)
Balance at 30 September
2013 70 2,018 14,337 16,425 247 16,672
-------------------------------------- -------- ------------ ---------- ------- ----------------- --------
For the six months ended 31 March 2014
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 October
2013 70 2,018 14,337 16,425 247 16,672
Profit for the period - - 3,012 3,012 11 3,023
-------------------------------------- -------- ------------ --------- ------- ----------------- --------
Other comprehensive (expense)/income:
Currency translation differences - (640) - (640) - (640)
Tax on items taken directly
to equity - - 47 47 - 47
Remeasurement of net defined
pension liability - - (378) (378) - (378)
Other comprehensive expense
for the period - (640) (331) (971) - (971)
-------------------------------------- -------- ------------ --------- ------- ----------------- --------
Total comprehensive (expense)/income
for the period - (640) 2,681 2,041 11 2,052
-------------------------------------- -------- ------------ --------- ------- ----------------- --------
Share based payments - - 1,363 1,363 - 1,363
Balance at 31 March 2014 70 1,378 18,381 19,829 258 20,087
-------------------------------------- -------- ------------ --------- ------- ----------------- --------
Unaudited consolidated statement of changes in shareholders'
equity (continued)
For the six months ended 30 September 2014
Hedging
and
Share translation Retained Non controlling Total
capital reserve earnings Total interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 April 2014 70 1,378 18,381 19,829 258 20,087
-------------------------------------- -------- ------------ --------- ------- ----------------- --------
Loss for the period - - (431) (431) 66 (365)
-------------------------------------- -------- ------------ --------- ------- ----------------- --------
Other comprehensive (expense)/income:
Currency translation differences - (734) - (734) - (734)
Dividend payable (332) (332) - (332)
Remeasurement of net defined
pension liability - - (14) (14) - (14)
Other comprehensive expense
for the period - (734) (346) (1,080) - (1,080)
-------------------------------------- -------- ------------ --------- ------- ----------------- --------
Total comprehensive (expense)/income
for the period - (734) (777) (1,511) 66 (1,445)
-------------------------------------- -------- ------------ --------- ------- ----------------- --------
Share issue 2 - - 2 - 2
Share based payments - - 1,560 1,560 - 1,560
Balance at 30 September 2014 72 644 19,164 19,880 324 20,204
-------------------------------------- -------- ------------ --------- ------- ----------------- --------
Unaudited consolidated cash flow statement
For the six months ended 30 September 2014
Six months Six months
ended 30 ended 30 Year ended
September September 31 March
2014 2013 2014
Note GBP'000 GBP'000 GBP'000
------------------------------------------ ---- ---------- ------------ ----------
Operating activities
Cash used in operations 15 (3,890) (1,368) (87)
Interest paid (100) (284) (455)
Tax paid 51 (101) (3)
------------------------------------------ ---- ---------- ------------ ----------
Net cash used in operating activities (3,939) (1,753) (545)
------------------------------------------ ---- ---------- ------------ ----------
Investing activities
Purchases of property, plant and
equipment (836) (279) (1,113)
Purchases of intangible assets
(computer software) (201) (104) (279)
Purchase of businesses (1,475) (441) (1,083)
Disposal of subsidiary undertakings - (270) (270)
------------------------------------------ ---- ---------- ------------ ----------
Net cash used in investing activities (2,512) (1,094) (2,745)
------------------------------------------ ---- ---------- ------------ ----------
Net decrease in cash and cash equivalents (6,451) (2,847) (3,290)
------------------------------------------ ---- ---------- ------------ ----------
Cash and cash equivalents at beginning
of period 15,195 18,644 18,644
Effects of foreign exchange rates
on cash and cash equivalents (375) - (159)
------------------------------------------ ---- ---------- ------------ ----------
Cash and cash equivalents at end
of period 8,369 15,797 15,195
------------------------------------------ ---- ---------- ------------ ----------
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 2014 should be read in
conjunction with the financial statements for the period ended 31
March 2014, 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 2 December 2014.
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 2014 were approved by the Board of Directors on 3 June 2014
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 2014, 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 Profit/(loss)
joint venture Operating before
revenues profit/(loss) tax
GBP'000 GBP'000 GBP'000
------------------------------------- --------------- --------------- ----------------
Six months ending 30 September 2014
Before separately disclosed items 63,185 2,056 1,907
Separately disclosed items - (2,323) (2,323)
------------------------------------- --------------- --------------- ----------------
Total 63,185 (267) (416)
------------------------------------- --------------- --------------- ----------------
Six months ending 30 September 2013
Before separately disclosed items 63,890 1,707 1,411
Separately disclosed items - (2,154) (2,154)
------------------------------------- --------------- --------------- ----------------
Total 63,890 (447) (743)
------------------------------------- --------------- --------------- ----------------
Year ending 31 March 2014
Before separately disclosed items 126,914 4,806 4,229
Separately disclosed items - (2,452) (2,452)
------------------------------------- --------------- --------------- ----------------
Total 126,914 2,354 1,777
------------------------------------- --------------- --------------- ----------------
Details of separately disclosed items
Six months Six months
ended 30 ended 30 Year ended
September September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
------------------------------------- ----------- ------------- -----------
Other credits - - 2,384
Share option costs (1,704) (1,600) (3,650)
Amortisation of acquired intangible
assets (587) (554) (1,186)
Group's share of taxation relating (32) -
to Joint Ventures -
Separately disclosed items (2,323) (2,154) (2,452)
------------------------------------- ----------- ------------- -----------
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
-- Period charge for the Group's share of tax in relation to
Joint Ventures has been disclosed separately in order to present
profit before tax, a measure which WYG management uses for internal
performance analysis. There were no Joint Ventures in the prior
periods.
-- Items included in other credits/(costs) in the prior period,
relate to the release of unutilised restructuring and vacant
leasehold provisions net of costs in relation to the bank
refinancing and acquisition related costs.
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 senior management team comprising the Chief Executive Officer
the Group Finance Director and the Group Commercial Director. Its
primary responsibility is to manage the Group's day to day
operations and analyse trading performance.
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 managed and reported by key market
segments as follows:
-- UK
-- EAA (Europe, Africa and Asia)
-- MENA (Middle East & North Africa including Turkey)
Central overheads previously included within segments in the
prior period, have been identified separately. Comparative figures
have been restated accordingly.
The segmental results for the six months ended 30 September 2014
are as follows:
UK EAA MENA Group
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- ------- ------- ------- -------
Revenues including share
of joint venture revenues 40,036 15,612 7,537 63,185
Less share of joint venture
revenues - (891) - (891)
----------------------------------- ------- ------- ------- -------
40,036 14,721 7,537 62,294
Result
Operating profit before central
overheads and separately
disclosed items 2,708 712 631 4,051
Central overheads (1,995)
----------------------------------- ------- ------- ------- -------
Operating profit before separately
disclosed items 2,708 712 631 2,056
Separately disclosed items
(Note 4) (1,740) (417) (166) (2,323)
Operating profit/(loss) 968 295 465 (267)
Finance costs (149)
----------------------------------- ------- ------- ------- -------
Loss before tax (416)
Tax 51
----------------------------------- ------- ------- ------- -------
Loss for the period (365)
----------------------------------- ------- ------- ------- -------
Profit attributable to non
controlling interests 66
Loss attributable to the
owners of the parent (431)
----------------------------------- ------- ------- ------- -------
5. Segmental information (continued)
The segmental results for the six months ended 30 September 2013
are as follows:
UK EAA MENA Group
Restated Restated Restated Restated
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- --------- ---------- --------- ---------
Revenues including share of
joint venture revenues 35,379 19,761 8,750 63,890
Less share of joint venture
revenues - - - -
------------------------------------- --------- ---------- --------- ---------
35,379 19,761 8,750 63,890
Result
Operating profit excluding central
overheads and separately disclosed
items 2,248 1,173 231 3,652
Central overheads (1,945)
------------------------------------- --------- ---------- --------- ---------
Operating profit before separately
disclosed items 2,248 1,173 231 1,707
Separately disclosed items (Note
4) (1,821) (224) (109) (2,154)
Operating profit/(loss) 427 949 122 (447)
Finance costs (296)
------------------------------------- --------- ---------- --------- ---------
Loss before tax (743)
Tax (219)
------------------------------------- --------- ---------- --------- ---------
Loss attributable to equity
shareholders (962)
------------------------------------- --------- ---------- --------- ---------
Loss attributable to non controlling
interests (3)
Loss attributable to the owners
of the parent (959)
------------------------------------- --------- ---------- --------- ---------
6. Finance costs
Six months Six months
ended 30 ended 30 Year ended
September September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
--------------------------------------- ---------- ------------ ----------
Interest on bank loans, guarantees and
overdrafts 35 131 220
Interest on bonds 109 153 339
Interest related to defined benefit
scheme 5 12 18
Total finance costs 149 296 577
--------------------------------------- ---------- ------------ ----------
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 loss before tax for the period.
8. (Loss)/earnings per share
The calculation of the basic and diluted (loss)/earnings per
share is based on the following data:
Six months Six months
ended 30 ended 30 Year ended
September September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
--------------------------------------------- ----------- ------------- -----------
Earnings for the purposes of basic
and diluted (loss)/earnings per share
being profit for the year (431) (959) 2,053
Adjustment relating to separately disclosed
items (see note 4) 2,323 2,154 2,452
Tax impact of separately disclosed
items (see note 4) (32) - -
--------------------------------------------- ----------- ------------- -----------
Earnings for the purposes of basic
and diluted adjusted earnings per share 1,860 1,195 4,505
--------------------------------------------- ----------- ------------- -----------
Six months Six months
ended 30 ended 30 Year ended
September September 31 March
2014 2013 2014
Number Number Number
--------------------------------------- ----------- ----------- -----------
Number of shares
Weighted average number of shares for
basic earnings per share 64,737,804 64,533,176 64,596,169
Effect of dilutive potential ordinary
shares:
Share options - - 6,316,301
Weighted average number of shares for
diluted earnings per share 64,737,804 64,533,176 70,912,470
--------------------------------------- ----------- ----------- -----------
(Loss)/earnings per share
Basic (0.7p) (1.5p) 3.2p
Diluted (0.7p) (1.5p) 2.9p
--------------------------------------- ----------- ----------- -----------
Adjusted earnings per share
Basic 2.9p 1.8p 7.0p
Diluted 2.6p 1.7p 6.4p
--------------------------------------- ----------- ----------- -----------
In the six months to 30 September 2014 the number of shares used
for the calculation of diluted adjusted earnings per share has been
increased by 6,105,991 (2013: 5,802,640). For periods where the
Group was loss making, dilution has no effect on loss per
share.
9. Dividends
Six months Six months
ended 30 ended 30 Year ended
September September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
------------------------------------------ ---------- ---------- ----------
Amounts recognised as distributions
to equity holders in the period:
Final dividend for the year ended 31
March 2014 of 0.5p (2013: nil) per share - - 332
Interim dividend for the year ended
31 March 2015 of 0.3p (2013: nil) per
share 200 - -
200 - 332
------------------------------------------ ---------- ---------- ----------
The interim dividend was approved on 1 December 2014 and as such
has not been included as a liability in these financial
statements.
The final dividend for the year ended 31 March 2014 was approved
by the shareholders at the Annual General Meeting on 23 September
2014 and was paid on 3 November 2014. This has been included as a
liability in these financial statements but was not recognised in
the financial statements for the year ended 31 March 2014.
10. Business Combinations
In September 2014, WYG Environment Planning and Transport
Limited, a wholly owned subsidiary of the Group, acquired 100% of
the share capital of Alliance Environment and Planning Limited, a
specialist planning practice with offices in Guildford, London,
Birmingham and Bedfordshire.
The following table sets out the provisional fair value of the
net assets acquired and the resulting goodwill:
Carrying
value pre Fair value
acquisition adjustments Total fair
GBP'000 GBP'000 value GBP'000
Fixed assets 63 - 63
Cash 694 - 694
WIP 175 - 175
Trade and other receivables 616 - 616
Trade and other payables (712) - (712)
836 - 836
Goodwill 749
Customer relationships 1,567
Order book 48
----------------------------- ------------- ------------- ---------------
3,200
----------------------------- ------------- ------------- ---------------
Satisfied by:
Cash 1,600
Deferred consideration 1,600
3,200
------------------------------------------- ------------ ----------
11. Goodwill
GBP'000
---------------------------------------------- ---------
Cost
At 1 April 2013 63,383
Arising on acquisition of business 140
---------------------------------------------- ---------
At 30 September 2013 63,523
At 1 April 2014 64,534
Arising on acquisition of business (note 10) 749
At 30 September 2014 65,283
---------------------------------------------- ---------
Accumulated impairment losses
At 1 April 2013, 1 October 2013 (51,738)
---------------------------------------------- ---------
At 1 April 2014 and 30 September 2014 (51,738)
---------------------------------------------- ---------
Net book value
At 30 September 2014 13,545
---------------------------------------------- ---------
At 30 September 2013 11,785
---------------------------------------------- ---------
Goodwill is tested for impairment at the interim and financial
year end reporting dates and whenever there are indications that it
may have suffered an impairment. Goodwill is considered impaired to
the extent that its carrying amount exceeds its recoverable amount,
which is the higher of the value in use and the fair value less
costs to sell of the cash generating unit to which it is allocated.
In the impairment tests of goodwill performed, the recoverable
amount was determined based on the value in use calculations.
Management based the value in use calculations on cash flow
forecasts derived from the most recent financial forecasts approved
by the Board including certain sensitivities, in which the
principal assumptions were those regarding sales growth and changes
in direct costs.
Following the review at 30 September 2014, management decided
that no further impairment was necessary.
12. Property, plant and equipment and intangible assets
Property, plant
and Intangible
equipment assets
GBP'000 GBP'000
-------------------------------------------- ---------------- -----------
Six months ended 30 September 2013
Opening net book amount as at 1 April
2013 2,361 4,610
Additions 279 104
Arising on acquisition of business - 1,030
Depreciation and amortisation (578) (747)
Exchange differences 15 6
Closing net book amount as at 30 September
2013 2,077 5,003
-------------------------------------------- ---------------- -----------
Six months ended 30 September 2014
Opening net book amount as at 1 April
2014 2,242 4,802
Additions 836 201
Arising on acquisition of business 63 1,615
Depreciation and amortisation (665) (837)
Exchange differences (14) (22)
Closing net book amount as at 30 September
2014 2,462 5,759
-------------------------------------------- ---------------- -----------
13. Provisions, liabilities and other charges
Vacant
Claims Redundancy leasehold Total
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- ----------- ----------- --------
At 1 April 2013 4,542 1,302 11,973 17,817
Additional provisions 241 - - 241
Utilised during the period (48) (972) (1,129) (2,149)
Exchange impact - - 17 17
---------------------------- -------- ----------- ----------- --------
At 30 September 2013 4,735 330 10,861 15,926
---------------------------- -------- ----------- ----------- --------
At 1 April 2014 4,395 - 7,589 11,984
Utilised during the period (569) - (1,161) (1,730)
Exchange impact - - 119 119
At 30 September 2014 3,826 - 6,547 10,373
---------------------------- -------- ----------- ----------- --------
13. Provisions, liabilities and other charges (continued)
Claims
Provisions are made for current and estimated obligations in
respect of claims made by contractors and the general public
relating to accident or other insurable risks as a result of the
business activities of the Group.
Redundancy
Provision is made for current estimated future costs of
redundancy and ex gratia payments to be made where this has been
communicated to those employees concerned.
Vacant leasehold properties
The Group has a number of vacant leasehold properties, with the
majority of the head leases expiring within the next five years.
Provision has been made for the residual lease commitments together
with other outgoings, after taking into account assumptions
relating to later periods of vacancy.
14. Financial liabilities
30 30
September September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
------------------------------------- ----------- ------------ ---------
Current
Bank overdrafts 138 1,134 662
138 1,134 662
------------------------------------- ----------- ------------ ---------
Non-current
Redemption liability 484 395 454
484 395 454
------------------------------------- ----------- ------------ ---------
Financial liabilities are repayable
as follows:
On demand or within one year 138 1,134 662
Greater than one year 484 395 454
622 1,529 1,116
------------------------------------- ----------- ------------ ---------
The redemption liability relates to the discounted fair value of
an option to purchase the remaining 25% of Arndale 22 Limited.
15. Cash generated from operations
Six months Six months
ended 30 ended 30 Year ended
September September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
---------------------------------------------- ---------- ---------- ------------
(Loss)/profit from operations (267) (447) 2,354
Adjustments for:
Depreciation of property, plant and equipment 665 578 1,205
Amortisation of intangible assets 837 747 1,594
Loss on disposal of property, plant and
equipment - - 16
Share options expense 1,704 1,600 3,650
Operating cash flows before movements in
working capital 2,939 2,478 8,819
Increase in inventories (152) (6,309) (1,666)
(Increase)/decrease in receivables (3,118) 3,924 3,618
Decrease in payables (3,559) (1,461) (10,858)
---------------------------------------------- ---------- ---------- ------------
Cash used in operations (3,890) (1,368) (87)
---------------------------------------------- ---------- ---------- ------------
16. Analysis of net cash
Other At 30
At 1 April non-cash September
2013 Cash flows items 2013
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ----------- ----------- ---------- -----------
Cash and cash equivalents 18,644 (2,847) - 15,797
Cash in restricted access
accounts (3,806) 496 - (3,310)
--------------------------- ----------- ----------- ---------- -----------
Unrestricted net cash 14,838 (2,351) - 12,487
--------------------------- ----------- ----------- ---------- -----------
Other At 30
At 1 April non-cash September
2014 Cash flows items 2014
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ----------- ----------- ---------- -----------
Cash and cash equivalents 15,195 (6,451) (375) 8,369
Cash in restricted access
accounts (2,423) 535 91 (1,797)
--------------------------- ----------- ----------- ---------- -----------
Unrestricted net cash 12,772 (5,916) (284) 6,572
--------------------------- ----------- ----------- ---------- -----------
Cash and cash equivalents include GBP8,507,000 cash (2013:
GBP16,931,000) and GBP138,000 overdrafts (2013: GBP1,134,000).
Restricted cash relates to restricted access accounts in WYG
International Limited and cash held in joint operations.
Other non-cash movements represent currency exchange
differences.
17. Related party transactions
There have been no changes in the nature of related party
transactions as described in the 2014 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 2014.
18. 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 QFLFBZLFEFBF
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