TIDMWYG
RNS Number : 7906H
WYG Plc
03 December 2015
3 December 2015
WYG plc ("WYG" or the "Group")
Half Year Report
Strong order book momentum underpins recently revised
expectations
WYG, the global project management and technical consultancy,
announces its half year results for the six months ended 30
September 2015.
Financial highlights:
Significant profit growth despite delayed approval of the EU
budget holding back international revenues as anticipated
-- Revenue* of GBP62.6m (H1 2014: GBP63.2m)
-- Adjusted profit before tax** up 13% to GBP2.2m (H1 2014: GBP1.9m)
-- Profit before tax of GBP2.1m (H1 2014: loss of GBP0.4m)
-- Adjusted** earnings per share of 3.3p (H1 2014: 2.9p)
-- Interim dividend up 67% at 0.5p per Ordinary Share (2014: 0.3p)
-- Unrestricted cash as at 30 September 2015 of GBP2.6m (H1
2014: GBP6.6m) after GBP2.5m of acquisition related costs
-- New GBP25m five year committed facility with HSBC
-- Order book increased by 18% to GBP123.4m at 30 September 2015
(31 March 2015: GBP105.0m) of which:
-- UK - up 15% to GBP60.9m (31 March 2015: GBP53.0m)
-- International - up 20% to GBP62.5m (31 March 2015: GBP52.0m)
-- New management incentives approved at the AGM - 12.2m options
awarded under the TIP have been surrendered, equivalent to 17.9% of
the current issued share capital
*Including share of Joint Venture revenues
**Before separately disclosed items
Operational highlights:
Strong UK performance and progress in converting international
pipeline
UK:
-- 15% increase in revenue and 67% increase in underlying operating profit driven by buoyant infrastructure and planning markets
-- Consolidated our position as a top three planning consultant in the UK
-- Alliance Planning business performing well since acquisition in September 2014
-- Acquired FMW Consultancy Limited in June 2015
-- Significant expansion of new asset management discipline with
wins including Co-op and the MoD for the surveying of overseas
service families' accommodation
-- More than 100 new projects won under UK framework agreements
including development of the MoD's new base in Bahrain
International:
-- Whilst EU Budget delays held back first half revenues, some
significant new multi-year EU projects were won during the period
including a EUR8.8m two year social inclusion contract with a
Turkish Ministry on behalf of EuropeAid and a EUR2.9m extension of
the Western Balkans IPF4 programme
-- Strong progress in wider international market with GBP29.6m
of new projects won in the first half
-- We are currently delivering 19 projects in 12 countries in Africa alone
Post period end and Outlook:
-- Trading since the half year end is in line with management's expectations
-- Order book further increased to GBP130.0m as at 30 November
2015 following further contract wins
-- New Board appointments: Jeremy Beeton and Neil Masom
-- Acquisition of North Associates (Cumbria) Limited further
bolsters WYG's leading position in UK property asset management and
planning
-- Further major opportunities arising from the UK government's
spending reviews and Autumn Statement
Paul Hamer, Chief Executive Officer of WYG, said:
"Building on the strong first half performance in the UK, we are
seeing an increasing flow of work from major public and private
sector clients, underpinned by continuing economic growth and
infrastructure spending which are the main drivers of our core
front-end planning and consultancy business.
"Internationally, we continue to make very good progress with
our activities in fragile and developing states where we are
starting to see good levels of growth, particularly in Africa.
Whilst the delay in the ramp up in the EU funding cycle held
revenues back during the first half, since this issue was resolved
we have started to win some significant new multi-year EU related
projects. We expect performance to build during the second half of
the year and for several years beyond.
"With an exceptionally high proportion of our current year
revenue expectations already in our order book together with the
strong momentum in our international business and the steps taken
over recent years to increase Group profitability, we are well
placed to deliver on market expectations for the full year.
"In addition, having recently secured a more flexible GBP25m
bank facility, we are actively reviewing a number of acquisition
opportunities and investing in growth in support of our aspiration
of building towards a profit before tax of GBP15m by 2018."
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 / Ollie Hoare
N+1 Singer Tel: +44 (0) 207 496 3000
Sandy Fraser / Nick Owen
WH Ireland Limited Tel: +44 (0) 207 220 1666
Adrian Hadden / Liam Gribben
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report that the Group has delivered a 13%
increase in adjusted profit before taxation against the comparative
period despite broadly flat revenues which were held back by the
delayed ramp-up of the EU funding cycle, as stated in our
announcement of 24 September 2015.
We have also made considerable progress towards delivering our
strategy of accelerating future growth with a focus on driving
quality revenues from our core areas of strength; front end
planning consultancy and international development. We intend to
deliver this growth both organically and through selective
acquisitions which provide access to a wider range of skills and
resources, framework agreements or geographical coverage. Since the
announcement of the conclusion of our strategic review on 9 June,
we have secured appropriate funding, broadened the skills and
experience on our Board and put in place performance based
management incentives which will enhance our ability to deliver our
strategy. In addition, we acquired North Associates in October
2015, which further consolidates our leading position in UK
planning consultancy and we have continued to invest in our
team.
Recent UK government announcements including the Chancellor's
Autumn Statement validate our current growth strategy and confirm
that we are well positioned to take advantage of opportunities
arising from the latest Comprehensive Spending Review and the
Strategic Defence and Security Review (SDSR). In particular, our
position on key frameworks with FCO, World Bank and DfID means that
we should benefit from the Chancellor's confirmation that 50% of
DfID's budget will be allocated to fragile states in each of the
next five years, the Conflict Stability and Security Fund will
increase from GBP1.0bn to GBP1.3bn by 2019/20, the Good Governance
Fund for Eastern Europe and the Balkans will be doubled to GBP40m a
year, the creation of a new GBP500m crisis reserve and the finance
for climate change resilience in developing countries will be
increased by 50% to at least GBP5.8bn. Likewise, under the SDSR,
confirmation that GBP178bn is to be spent by the MoD on new assets
over the next 10 years and that the MoD estate is to be reduced by
30% to build 55,000 new homes means that our positioning on the ASP
Supply Chain framework and our involvement with the Army Basing
Programme, together with our experience of over 25 years on
projects for the MoD such as masterplanning for Salisbury Plain,
ensure that we are ideally placed to win many major new
opportunities for which there is a firmly stated political will and
a clearly identified budget.
Bank Facility
In July 2015 we secured a new GBP25m five-year committed
multicurrency revolving credit facility from HSBC offering broad
flexibility between debt and bonding requirements. This facility,
which gives the Group access to debt for the first time since 2010,
ensures that we have the resources with which to fund our
accelerated growth ambitions through the remainder of the current
financial year and beyond.
Board changes
As part of our strategic review, we said that we would take the
opportunity to challenge and test the suitability of our Board
structure to empower the business to make it more agile and
responsive to help deliver the Board's growth ambitions for the
next phase of the Group's development. As a result of that review,
Graham Olver, the Group's Chief Operating Officer, decided to step
down from the Board in August. In September, Robert Barr the
Group's senior independent non-executive director retired from the
Board having completed the maximum nine years' service on the board
during which he could be deemed to be independent under the
Code.
On 1 October 2015, we announced the appointment of two new
non-executive directors. Jeremy Beeton joined us as senior
independent non-executive director with more than 40 years'
experience in international business, government, construction and
civil engineering. Neil Masom joined us to chair WYG's Remuneration
Committee with more than 30 years' experience of working in
complex, politically sensitive activities in international,
commercial and public sector organisations.
(MORE TO FOLLOW) Dow Jones Newswires
December 03, 2015 02:00 ET (07:00 GMT)
We also announce today that after four very challenging yet
successful years, Sean Cummins has decided, for personal reasons,
to step down as Group Finance Director. The Company has started an
external search for a successor and will make an announcement in
due course. Sean will continue in his role as Group Finance
Director until his successor is appointed in order to facilitate a
smooth and effective transition. During his time with the Group,
Sean has played a key role in WYG's transition to a well funded,
independent group and will leave the Group in a strong position to
execute the growth strategy which is at the heart of the next phase
of its
development. The Board thanks Sean for his contribution and wishes him well in his future career.
New Management Incentives and Share Capital
At the Annual General Meeting on 24 September 2015 shareholders
approved new incentive arrangements which comprised three key
elements: (1) a revised annual bonus arrangement which included a
significant element of bonus deferral in the form of cash and
share-based payments which are subject to the achievement of
demanding PBT and cash conversion targets; (2) a new Performance
Share Plan (PSP) covering the senior executive and leadership teams
which will vest only if absolute EPS growth targets and TSR targets
measured against a peer group are achieved; and (3) a Restricted
Share Plan (RSP) covering other key senior employees. It was a
precondition to entry into the new plans that individual
participants were required to surrender the overwhelming majority
of unvested awards under the Transformation Incentive Plan (TIP)
which the new scheme supersedes. We are pleased to confirm that
12.2m options previously awarded under the TIP have been
surrendered, equivalent to 17.9% of the current issued share
capital; thus substantially removing the potentially dilutive
effect of the TIP scheme which had become an impediment to
optimising shareholder value. Following the surrender of awards
under the TIP there are 4.2m vested and unvested options over
ordinary shares.
The Company has granted options over 1.4m ordinary shares under
the PSP and 1.2m ordinary shares under the RSP. There are no other
options over the Company's ordinary shares.
Acquisitions
Following the acquisition of Alliance Planning in September
2014, we made two more acquisitions during and after the half year
period which further bolster the Group's strength in front end
planning consultancy and support its focus on high quality
revenues.
We acquired FMW Consultancy Limited on 8 June 2015, a specialist
transport and infrastructure consultancy, in a transaction with an
enterprise value of GBP1.4m, further cementing our status as one of
the largest transport and infrastructure planning consultancies in
the UK. The acquisition was immediately earnings enhancing and is
performing well as part of the Group.
After the period end, on 30 October 2015, we announced the
acquisition of North Associates (Cumbria) Limited together with its
subsidiary Taylor & Hardy Limited for a maximum total
consideration of GBP5.0m. This acquisition not only bolsters the
Group's status as one of the largest property asset management and
planning consultancy businesses in the UK, it also positions WYG to
benefit from some of the anticipated GBP90 billion of investment
planned as part of the development of Britain's Energy Coast in
West Cumbria.
We continue to review a pipeline of acquisition opportunities
and, having secured a new, flexible GBP25m bank facility, we are
well positioned to convert this pipeline over time.
People
We have continued to invest in our team, increasing the number
of technical staff in the UK during the first half of the financial
year by more than 5%, in anticipation of the expected significant
increase in demand for our services. We have also strengthened our
recruitment capability. However, the temporary reduction in
international work has necessitated some reorganisation of certain
parts of the business with the result that total headcount as at 30
September 2015 was only marginally ahead at 1,483 (31 March 2015:
1,481).
We have upgraded employee benefits and continued to improve
employee engagement, career development and internal communications
to ensure that retention levels remain as high as possible and that
we invest in the development of the high quality of leadership
enabling us to continue to expand our business.
Results
The UK business has delivered an excellent performance as the
Group has taken advantage of its strong market position in a
trading environment underpinned by continuing economic growth and
infrastructure spending. With the UK order book up 15% since 31
March 2015, this performance looks set to continue. We are
achieving an improving bid to win ratio on long-term frameworks and
an increasing flow of work from major public and private sector
clients. The relatively short-term nature of a large proportion of
our UK order book means that orders translate into revenue more
quickly than in other regions giving us good near-term
visibility.
Whilst the delay in the ramp-up of the EU funding cycle held
back revenues in the first half as expected, we are now converting
a large proportion of our EU related pipeline into firm project
wins such that, at the half year end, our International businesses
have delivered an even greater increase in order book than in the
UK, up more than 20% on the figure reported as at 31 March 2015.
New contracts were secured to the value of GBP29.6m (GBP15.6m in
EAA and GBP14.0m in MENA). These offer longer term revenue
visibility, with a meaningful proportion of these wins being
multi-year projects that will drive performance as we go into the
second half of the year and for several years beyond.
We are also working closely with the UK's Ministry of Defence,
Foreign & Commonwealth Office, the Department for International
Development (DfID) and EuropeAid to grow our portfolio of work in
Fragile and Conflict Affected States (FCAS). We are currently
delivering 19 projects in 12 countries in Africa where we have a
strong order book and pipeline.
We have made a number of investments in new programmes to
enhance our IT hardware and software, and the ongoing rollout of
our project management and other essential programmes.
As we announced in September, gross revenue (including our share
of Joint Venture revenues) was, as expected, broadly unchanged at
GBP62.6m (H1 2014: GBP63.2m). A GBP6.1m increase in UK revenue was
offset by the decrease in our international revenue caused by the
slow commencement of projects under the new EU funding cycle.
Underlying profit performance continues to improve with the
Group increasing adjusted profit before tax (before separately
disclosed items) to GBP2.2m (H1 2014: GBP1.9m). On a statutory
basis, the Group made a profit before tax of GBP2.1m (H1 2014: loss
of GBP0.4m) on pre-joint-venture revenues of GBP62.3m (H1 2014:
GBP62.3m).
Earnings per share adjusted to exclude separately disclosed
items was 3.3p (H1 2014: 2.9p).
The Group closed the period with unrestricted cash of GBP2.6m
(H1 2014: GBP6.6m) reflecting normal seasonal trends in working
capital utilisation, the planned application of money towards
legacy issues, cash consideration spent on acquisitions totalling
GBP2.5m. Cash spending on legacy issues continues to reduce ahead
of target and, by focusing on cash generation and the effective
management of working capital, we expect cash balances (before any
further spending on acquisitions) to show their normal increase in
the second half.
Dividend
For the current period, in line with the Board's confidence in
the Group's improving results and outlook, the Board has decided to
approve an interim dividend of 0.5p per ordinary share (30
September 2014: 0.3p). The interim dividend will be paid on 16
March 2016 to shareholders on the register on 26 February 2016 and
WYG shares will trade ex-dividend on 25 February 2016.
Outlook
Building upon a strong UK performance in the first half, we are
seeing an increasing flow of work from major public and private
sector clients underpinned by continuing economic growth and
infrastructure spending which are the main drivers of our core
front-end planning and consultancy business. Our two recent
acquisitions have helped to secure the Group's position as a
leading UK planning and transport consultant and will help to
augment the growth of our UK activities.
Internationally, we continue to make very good progress
diversifying into fragile and developing states and we are starting
to see good levels of growth, particularly in central Africa.
Whilst the delay in the ramp up in the EU funding cycle held
revenues back in the first half as anticipated, we have started to
win some significant new multi-year EU related projects since the
start of the financial year, which we expect to drive performance
during the second half of the year and for several years
beyond.
This, combined with our increasing profitability and an
exceptionally high proportion of the current year revenue
expectations already in our order book, leaves us well placed to
deliver on market expectations for the full year.
In addition, having secured a GBP25m bank facility, we are
actively reviewing a number of acquisition opportunities and
investing in other growth initiatives to support our aspiration of
building towards a profit before tax of approximately GBP15m by
2018.
Mike McTighe
Chairman
3 December 2015
BUSINESS REVIEW
Operationally, the Group is structured, and reports, on a
regional basis as described below.
UK (74% of Group Revenue)
The UK region generated revenue of GBP46.2m (H1 2014: GBP40.0m)
with an operating profit before separately disclosed items and
central overheads of GBP4.5m (H1 2014: GBP2.7m).
(MORE TO FOLLOW) Dow Jones Newswires
December 03, 2015 02:00 ET (07:00 GMT)
The UK region continued to deliver a strong performance in the
first half of the year: revenues grew by 15% and operating profit
increased by 67%. Steady growth has been evident in most core
sectors, with transport performing particularly well. The
acquisition of FMW Consultancy has strengthened our business in
this sector, particularly in the South West and South Wales.
In a rapidly evolving residential sector, we have increased our
numbers of planners, project managers, engineers, transport
planners, environmentalists and urban & landscape designers. We
continue to work with most of the largest national house-builders
as well as the social housing sector.
At the start of this year we established a separate Asset
Management discipline and this has already expanded significantly.
Key wins have included our appointment as Technical Assessor to the
Co-op Group and selection by the Defence Infrastructure
Organisation to undertake surveys on accommodation standards for
service families on all of its international estate which involved
deploying surveyors to 14 countries.
Our Management Services and Engineering disciplines have also
been successful in winning a number of significant projects. These
include a commission to oversee the refurbishment of the
Headquarters of the City of London Police and provision of
Technical Advisory support to the Ministry of Justice. Our Belfast
office has been appointed by Southern Regional College to design
and manage the replacement of further education colleges in
Craigavon, Banbridge and Armagh with three new, state of the art
college campuses with a combined construction value of GBP55m and,
shortly after the period end, was also appointed to design and
manage the delivery of another major education project with a
construction value of circa GBP114 million.
Other significant wins in the period include 16 new projects
under the Defence Infrastructure Organisation's Principal Support
Provider framework, a GBP1.0m, two year programme of work to
support the MoD's development of a new naval base in Bahrain, a
GBP2.1m civil & structural laboratory project, a four year
framework to provide mechanical & electrical engineering
services to the Belfast Harbour Commissioners, and a framework to
provide health & safety and environmental services to Transport
for London.
The University of Surrey, School of Veterinary Medicine received
a royal seal of approval when it was officially opened by Her
Majesty the Queen and HRH the Duke of Edinburgh on 15 October 2015.
Our engineers were actively involved in the design process at every
stage, from inception through to completion. One of our major
schemes for the Defence Infrastructure Organisation has also
recently been successfully handed over, with the new GBP150m
barracks at MoD Stafford completed and opened by The Princess
Royal.
Our order book in the first half of the year has also continued
to grow, closing at GBP60.9m: up GBP7.9m (15%) from 31 March
2015.
Europe, Africa and Asia (EAA) (17% 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 our share of Joint Venture revenues) of GBP10.9m (H1
2014: GBP15.6m), which generated a breakeven operating position
before separately disclosed items and central overheads (H1 2014:
profit of GBP0.7m).
The period was characterised by strong order book development in
the international donor market where we have won a number of
projects with DfID, EuropeAid and the World Bank including a
EUR1.9m programme for strengthening democratisation and Good
Governance in Zanzibar and a EUR4.6 million extension to the
Western Balkans Infrastructure Project Facility Phase 3. This
significant upturn involved securing new contracts with an
aggregate value of more than EUR20.0m.
Our operations throughout CEE remained at depressed levels while
the markets continued to await the commencement of the new
financing arrangements. Once the European Structural Funds facility
became operational, the numbers and value of opportunities in our
core socio-economic services market in CEE started to accelerate
and is now growing significantly, increasing our expectation for
strong order book growth in the coming periods. In the technical
services area, our Polish business was highly successful in
securing and delivering a number of national railway
commissions.
In SEE we benefited from our leading position in Croatia and
long-standing involvement in the Western Balkans Infrastructure
Project Facility programme, thereby successfully running a business
operation with access to a diversified mix of local, EU Structural
Funds and EuropeAid markets. This allows us to target a strong
overall performance in SEE for the current year. In the period
WYG's Russian business, a collaborative joint venture delivering
engineering and consultancy services to the mining sector, operated
under difficult market conditions and we expect this to continue
into the medium term.
In summary, current operations in the region overall have been
affected by continued lower spending on our EU market and our
investment into new clients and regions (mainly Africa). Both
EuropeAid and Structural Funds opportunities are now re-emerging,
and the investment into Africa has already brought record levels of
new wins. The Region, with some restructuring and reorganization
now taking place, is confidently looking towards a period of
opportunity and growth.
Middle East and North Africa (MENA) (9% of Group Revenue)
The MENA region (which includes Turkey) contributed revenue of
GBP5.5m (H1 2014: GBP7.5m) with an operating loss before separately
disclosed items and central overheads of GBP0.2m (H1 2014: profit
of GBP0.6m). The period has been dominated by a huge ramp up in
tendering activities as the release of EU funds finally translated
into a programme of new, large opportunities; we expect this high
level of tendering activity to continue. As market-leader in our
chosen fields, we anticipate securing significant success from
these opportunities and, since 1 April 2015, the team has won new
contracts with an aggregate value of EUR19.6m. At 30 September
2015, the Region's order book stood at EUR27.0m, nearly three times
what it was at the same time last year.
While we continue our efforts to diversify our technical and
engineering services in Turkey, the mainstay of our work, the water
and wastewater projects in Ordu, Siverek and Bulancak assisting the
Turkish Ministry of Environment in the supervision and design of
water and wastewater infrastructure to meet EU environmental
standards, are progressing well. The first two projects are nearing
completion but we are already preparing for significant extensions
securing another two to three years' additional work. In addition,
we have won and started work on the Kahramanmara water and
wastewater project which will be our largest so far. With its
EUR4.0m contracted budget, it is further evidence of our leading
position in the Turkish Environmental Operational Programme
financed by the EU.
In addition to the water and wastewater projects, we are a
leading member of a consortium that has been awarded the "Turkey
National Transport Master Plan" project. This represents our first
project from the EU financed Transport Operational Programme.
Examples of our recent EuropeAid successes include an EUR8.8m
two year social inclusion project for the Turkish Ministry of
Family and Social Policies, the ongoing BENEF 2013 programme, which
will run until December 2017 and on which we are working on five
separate lots, and three new framework contracts in the field of
Economic and Urban Development for delivery in Kenya, Cambodia, and
Turkey.
Unaudited consolidated income statement
For the six months ended 30 September 2015
Six months
Six months ended 30 Year ended
ended 30 September September 31 March 2015
2015 2014 Audited
Notes GBP'000 GBP'000 GBP'000
---------------------------------- ----- ------------------- ----------- --------------
Continuing operations
Revenue including share of joint
venture revenues 62,589 63,185 130,464
Less share of joint venture
revenues (312) (891) (1,787)
---------------------------------- ----- ------------------- ----------- --------------
Revenue 5 62,277 62,294 128,677
Operating expenses (60,150) (62,805) (127,538)
Share of result of joint ventures 2 244 418
---------------------------------- ----- ------------------- ----------- --------------
Operating profit/(loss)* 2,129 (267) 1,557
Finance costs 6 (68) (149) (116)
---------------------------------- ----- ------------------- ----------- --------------
Profit/(loss) before tax 2,061 (416) 1,441
Tax 7 133 51 504
---------------------------------- ----- ------------------- ----------- --------------
Profit/(loss) for the period 2,194 (365) 1,945
---------------------------------- ----- ------------------- ----------- --------------
Profit/(loss) attributable to:
Owners of the parent 2,206 (431) 1,923
(MORE TO FOLLOW) Dow Jones Newswires
December 03, 2015 02:00 ET (07:00 GMT)
Non controlling interests (12) 66 22
---------------------------------- ----- ------------------- ----------- --------------
2,194 (365) 1,945
---------------------------------- ----- ------------------- ----------- --------------
Earnings/(loss) per share 8
Basic 3.1p (0.7p) 2.9p
---------------------------------- ----- ------------------- ----------- --------------
Diluted 3.1p (0.7p) 2.7p
---------------------------------- ----- ------------------- ----------- --------------
* 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 2015
Six months Six months
ended 30 ended 30 Year to
September September 31 March
2015 2014 2015
GBP'000 GBP'000 GBP'000
----------------------------------------- ---------- ---------- ---------
Profit/(loss) for the period 2,194 (365) 1,945
------------------------------------------ ---------- ---------- ---------
Other comprehensive income/(expense):
Currency translation differences (100) (734) (798)
Impact of defined pension asset ceiling* (459) - (1,995)
Remeasurement of net defined pension
liability* 926 (14) 1,275
Other comprehensive income/(expense)
for the period 367 (748) (1,518)
------------------------------------------ ---------- ---------- ---------
Total comprehensive income/(expense)
for the period 2,561 (1,113) 427
------------------------------------------ ---------- ---------- ---------
Total comprehensive income/(expense)
attributable to:
Owners of the parent 2,573 (1,179) 405
Non controlling interests (12) 66 22
-------------------------------------- ----- ------- ---
2,561 (1,113) 427
------------------------------------- ----- ------- ---
*These items will not be reclassified subsequently to profit or
loss.
Unaudited consolidated balance sheet
As at 30 September 2015
As at As at As at
30 September 30 September 31 March
2015 2014 2015
Notes GBP'000 GBP'000 GBP'000
---------------------------------- ----- ------------- ------------- ---------
Non-current assets
Goodwill 11 14,523 13,545 13,895
Other intangible assets 12 5,077 5,759 4,836
Property, plant and equipment 12 2,640 2,462 2,307
Investments in Joint Ventures 395 249 418
Deferred tax assets 450 - 511
23,085 22,015 21,967
---------------------------------- ----- ------------- ------------- ---------
Current assets
Work in progress 26,248 21,890 21,145
Trade and other receivables 19,176 26,266 21,027
Tax recoverable 67 48 81
Cash and cash equivalents 7,947 8,507 12,324
---------------------------------- ----- ------------- ------------- ---------
53,438 56,711 54,577
---------------------------------- ----- ------------- ------------- ---------
Current liabilities
Trade and other payables (33,860) (42,678) (39,756)
Current tax liabilities (530) (976) (1,022)
Financial liabilities 13 (4,500) (138) -
---------------------------------- ----- ------------- ------------- ---------
(38,890) (43,792) (40,778)
---------------------------------- ----- ------------- ------------- ---------
Net current assets 14,548 12,919 13,799
---------------------------------- ----- ------------- ------------- ---------
Non-current liabilities
Financial liabilities 13 (514) (484) (514)
Retirement benefit obligation 16 (2,567) (2,848) (3,014)
Deferred tax liabilities (1,250) (1,025) (1,104)
Provisions, liabilities and
other charges (7,490) (10,373) (8,588)
---------------------------------- ----- ------------- ------------- ---------
(11,821) (14,730) (13,220)
---------------------------------- ----- ------------- ------------- ---------
Net assets 25,812 20,204 22,546
---------------------------------- ----- ------------- ------------- ---------
Equity attributable to the owners
of the parent
Share capital 72 72 72
Hedging and translation reserve 480 644 580
Retained earnings 25,108 19,164 21,730
---------------------------------- ----- ------------- ------------- ---------
25,660 19,880 22,382
Non controlling interest 152 324 164
---------------------------------- ----- ------------- ------------- ---------
Total equity 25,812 20,204 22,546
---------------------------------- ----- ------------- ------------- ---------
Unaudited consolidated statement of changes in shareholders'
equity
For the six months ended 30 September 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 April 2014 70 1,378 18,381 19,829 258 20,087
(Loss)/profit for the period - - (431) (431) 66 (365)
--------------------------------- -------- ------------ ---------- ------- ----------------- --------
Other comprehensive expense:
Currency translation differences - (734) - (734) - (734)
Remeasurement of net defined
pension liability - - (14) (14) - (14)
Other comprehensive expense
for the period - (734) (14) (748) - (748)
--------------------------------- -------- ------------ ---------- ------- ----------------- --------
Total comprehensive expense
for the period - (734) (445) (1,179) 66 (1,113)
--------------------------------- -------- ------------ ---------- ------- ----------------- --------
Share issue 2 - - 2 - 2
Share based payments - - 1,560 1,560 - 1,560
Dividend payable - (332) (332) - (332)
Arising on acquisition - -
of subsidiary - - - -
Balance at 30 September
2014 72 644 19,164 19,880 324 20,204
--------------------------------- -------- ------------ ---------- ------- ----------------- --------
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For the six months ended 31 March 2015
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
2014 72 644 19,164 19,880 324 20,204
Profit/(loss) for the period - - 2,354 2,354 (44) 2,310
-------------------------------------- -------- -------------- --------- ------- ----------------- --------
Other comprehensive (expense)/income:
Currency translation differences - (64) - (64) - (64)
Impact of defined pension
asset ceiling - - (1,995) (1,995) - (1,995)
Remeasurement of net defined
pension liability - - 1,289 1,289 - 1,289
Other comprehensive expense
for the period - (64) (706) (770) - (770)
-------------------------------------- -------- -------------- --------- ------- ----------------- --------
Total comprehensive (expense)/income
for the period - (64) 1,648 1,584 (44) 1,540
-------------------------------------- -------- -------------- --------- ------- ----------------- --------
Share based payments - - 1,331 1,331 - 1,331
Purchase of treasury shares - - (211) (211) - (211)
Dividends - - (202) (202) (116) (318)
Balance at 31 March 2015 72 580 21,730 22,382 164 22,546
-------------------------------------- -------- -------------- --------- ------- ----------------- --------
Unaudited consolidated statement of changes in shareholders'
equity (continued)
For the six months ended 30 September 2015
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 2015 72 580 21,730 22,382 164 22,546
Profit for the period - - 2,206 2,206 (12) 2,194
-------------------------------------- -------- ------------ --------- ------- ----------------- --------
Other comprehensive (expense)/income:
Currency translation differences - (100) - (100) - (100)
Impact of defined pension asset
ceiling - - (459) (459) - (459)
Remeasurement of net defined
pension liability - - 926 926 - 926
Other comprehensive (expense)/income
for the period - (100) 467 367 - 367
-------------------------------------- -------- ------------ --------- ------- ----------------- --------
Total comprehensive (expense)/income
for the period - (100) 2,673 2,573 (12) 2,561
-------------------------------------- -------- ------------ --------- ------- ----------------- --------
Share based payments - - 1,184 1,184 - 1,184
Dividends - - (479) (479) - (479)
Balance at 30 September 2015 72 480 25,108 25,660 152 25,812
-------------------------------------- -------- ------------ --------- ------- ----------------- --------
Unaudited consolidated cash flow statement
For the six months ended 30 September 2015
Six months Six months
ended 30 ended 30 Year ended
September September 31 March
2015 2014 2015
Note GBP'000 GBP'000 GBP'000
------------------------------------------ ---- ---------- ------------ ----------
Operating activities
Cash (used in)/generated from operations 14 (5,102) (3,890) 2,404
Interest paid (1) (100) (140)
Tax paid (185) 51 (250)
------------------------------------------ ---- ---------- ------------ ----------
Net cash (used in)/generated from
operating activities (5,288) (3,939) 2,014
------------------------------------------ ---- ---------- ------------ ----------
Investing activities
Purchases of property, plant and
equipment (956) (836) (1,372)
Purchases of intangible assets
(computer software) (186) (201) (287)
Purchase of businesses (net of
cash acquired) (2,511) (1,475) (1,475)
Net cash used in investing activities (3,653) (2,512) (3,134)
------------------------------------------ ---- ---------- ------------ ----------
Financing activities
Proceeds on issue of shares - - 2
Purchase of treasury shares - - (211)
Drawdown of loan 4,500 - -
Dividends paid to company shareholders
(note 9) - - (534)
Dividends paid to non controlling
interests - - (116)
------------------------------------------ ---- ---------- ------------ ----------
Net cash used in financing activities 4,500 - (859)
------------------------------------------ ---- ---------- ------------ ----------
Net decrease in cash and cash equivalents (4,441) (6,451) (1,979)
Cash and cash equivalents at beginning
of period 12,324 15,195 15,195
Effects of foreign exchange rates
on cash and cash equivalents 64 (375) (892)
------------------------------------------ ---- ---------- ------------ ----------
Cash and cash equivalents at end
of period 7,947 8,369 12,324
------------------------------------------ ---- ---------- ------------ ----------
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 2015 should be read in
conjunction with the financial statements for the period ended 31
March 2015, 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 2015.
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 2015 were approved by the Board of Directors on 9 June 2015
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
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The accounting policies applied are consistent with those of the
annual financial statements for the year ended 31 March 2015, 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 2015
Before separately disclosed items 62,589 2,228 2,160
Separately disclosed items - (99) (99)
------------------------------------- --------------- --------------- ----------------
Total 62,589 2,129 2,061
------------------------------------- --------------- --------------- ----------------
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)
------------------------------------- --------------- --------------- ----------------
Year ending 31 March 2015
Before separately disclosed items 130,464 5,802 5,686
Separately disclosed items - (4,245) (4,245)
------------------------------------- --------------- --------------- ----------------
Total 130,464 1,557 1,441
------------------------------------- --------------- --------------- ----------------
Details of separately disclosed items
Six months Six months
ended 30 ended 30 Year ended
September September 31 March
2015 2014 2015
GBP'000 GBP'000 GBP'000
------------------------------------- ----------- ------------- -----------
Share option costs (735) (1,704) (2,924)
Amortisation of acquired intangible
assets (630) (587) (1,324)
Other credits/(costs) 1,266 (32) 3
Separately disclosed items (99) (2,323) (4,245)
------------------------------------- ----------- ------------- -----------
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
-- Items included in other credits/(costs) are a credit relating
to the legal settlement of the 1986 pension scheme, the release of
surplus vacant leasehold provisions net of costs in relation to the
bank refinancing, restructuring 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)
The segmental results for the six months ended 30 September 2015
are as follows:
UK EAA MENA Group
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- ------- ------- ------- -------
Revenues including share
of joint venture revenues 46,185 10,899 5,505 62,589
Less share of joint venture
revenues - (312) - (312)
----------------------------------- ------- ------- ------- -------
46,185 10,587 5,505 62,277
Result
Operating profit/(loss) before
central overheads and separately
disclosed items 4,518 (5) (179) 4,334
Central overheads (2,106)
----------------------------------- ------- ------- ------- -------
Operating profit before separately
disclosed items 2,228
Separately disclosed items
(Note 4) (99)
Operating profit 2,129
Finance costs (68)
----------------------------------- ------- ------- ------- -------
Profit before tax 2,061
Tax 133
----------------------------------- ------- ------- ------- -------
Profit for the period 2,194
----------------------------------- ------- ------- ------- -------
Profit attributable to the
owners of the parent 2,206
Loss attributable to the
owners of the parent (12)
----------------------------------- ------- ------- ------- -------
5. Segmental information (continued)
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 excluding central
overheads and separately disclosed
items 2,708 712 631 4,051
Central overheads (1,995)
------------------------------------ ------- ------- ------- -------
Operating profit before separately
disclosed items 2,056
Separately disclosed items (Note
4) (2,323)
Operating loss (267)
Finance costs (149)
------------------------------------ ------- ------- ------- -------
Loss before tax (416)
Tax 51
------------------------------------ ------- ------- ------- -------
Loss attributable to equity
shareholders (365)
------------------------------------ ------- ------- ------- -------
Loss attributable to the owners
of the parent (431)
Profit attributable to the owners
of the parent 66
------------------------------------ ------- ------- ------- -------
6. Finance costs
Six months Six months
ended 30 ended 30 Year ended
September September 31 March
2015 2014 2015
GBP'000 GBP'000 GBP'000
------------------------------------ ---------- ------------ ----------
Interest on bank loans, guarantees,
bonds and overdrafts 59 144 110
Interest related to defined benefit
scheme 9 5 6
Total finance costs 68 149 116
------------------------------------ ---------- ------------ ----------
7. Tax
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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 profit before tax for the period.
8. Earnings/(loss) per share
The calculation of the basic and diluted earnings/(loss) per
share is based on the following data:
Six months Six months
ended 30 ended 30 Year ended
September September 31 March
2015 2014 2015
GBP'000 GBP'000 GBP'000
--------------------------------------------- ----------- ------------- -----------
Earnings for the purposes of basic
and diluted earnings/(loss) per share
being profit for the year 2,206 (431) 1,923
Adjustment relating to separately disclosed
items (see note 4) 99 2,323 4,245
Tax impact of separately disclosed
items (see note 4) - (32) (92)
--------------------------------------------- ----------- ------------- -----------
Earnings for the purposes of basic
and diluted adjusted earnings per share 2,305 1,860 6,076
--------------------------------------------- ----------- ------------- -----------
Six months Six months
ended 30 ended 30 Year ended
September September 31 March
2015 2014 2015
Number Number Number
--------------------------------------- ----------- ----------- -----------
Number of shares
Weighted average number of shares for
basic earnings per share 70,688,773 64,737,804 65,803,072
Effect of dilutive potential ordinary
shares:
Share options - - 5,071,767
Weighted average number of shares for
diluted earnings per share 70,688,773 64,737,804 70,874,839
--------------------------------------- ----------- ----------- -----------
Earnings/(loss) per share
Basic 3.1p (0.7p) 2.9p
Diluted 3.1p (0.7p) 2.7p
--------------------------------------- ----------- ----------- -----------
Adjusted earnings per share
Basic 3.3p 2.9p 9.2p
Diluted 3.3p 2.6p 8.6p
--------------------------------------- ----------- ----------- -----------
The adjusted earnings per share is calculated after excluding
separately disclosed items. This more accurately reflects the
underlying performance of the Group.
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. For periods where the Group was loss
making, dilution has no effect on loss per share.
9. Dividends
The interim dividend of 0.5p per share (2014: 0.3p per share)
was approved on 3 December 2015 and as such has not been included
as a liability in these financial statements.
The final dividend of 0.7p per share for the year ended 31 March
2015 was approved by the shareholders at the Annual General Meeting
on 24 September 2015 and was paid on 6 November 2015. 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
2015.
10. Business Combinations
In June 2015, WYG Environment Planning and Transport Limited, a
wholly owned subsidiary of the Group, acquired 100% of the share
capital of FMW Consultancy Limited, a specialist transport and
infrastructure consultancy with offices in Bristol, Cardiff and
Manchester.
The following table sets out the provisional fair value of the
net assets acquired and the resulting goodwill:
Carrying
value pre Fair value Total fair
acquisition adjustments value
GBP'000 GBP'000 GBP'000
Cash 302 - 302
WIP 30 - 30
Trade and other receivables 296 - 296
Trade and other payables (306) - (306)
Deferred tax - (191) (191)
322 (191) 131
Goodwill 628
Customer relationships 876
Order book 33
------------------------------- --------------- --------------- -------------
1,668
------------------------------- --------------- --------------- -------------
Satisfied by:
Cash 1,121
Deferred consideration 547
1,668
------------------------------------------------ --------------- ----------------
On 30 October 2015, North Associates (Cumbria) Limited together
with its subsidiary Taylor & Hardy Limited was acquired for a
maximum total consideration of GBP5.0m.
11. Goodwill
GBP'000
---------------------------------------------- ---------
Cost
At 1 April 2014 64,534
Arising on acquisition of business 749
---------------------------------------------- ---------
At 30 September 2014 65,283
At 1 April 2015 65,633
Arising on acquisition of business (note 10) 628
At 30 September 2015 66,261
---------------------------------------------- ---------
Accumulated impairment losses
At 1 April 2014, 1 April 2015 (51,738)
---------------------------------------------- ---------
At 30 September 2014 and 30 September 2015 (51,738)
---------------------------------------------- ---------
Net book value
At 30 September 2015 14,523
---------------------------------------------- ---------
At 30 September 2014 13,545
---------------------------------------------- ---------
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 2015, 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 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
-------------------------------------------- ---------------- -----------
Six months ended 30 September 2015
Opening net book amount as at 1 April
2015 2,307 4,836
Additions 956 186
Arising on acquisition of business
(note 10) - 909
Depreciation and amortisation (621) (858)
Exchange differences (2) 4
Closing net book amount as at 30 September
2015 2,640 5,077
-------------------------------------------- ---------------- -----------
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