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RNS
WYG Plc  -  WYG   

Half-year Report

Released 07:00 01-Dec-2016

RNS Number : 6017Q
WYG Plc
01 December 2016
 

 

 

 

 

 

1 December 2016

WYG plc ("WYG" or the "Group")

Half Year Report

Significant growth in revenues, profit before tax and order book

 

WYG, the global project management and technical consultancy, announces its half year results for the six months ended 30 September 2016.

 

Financial highlights:

A strong financial performance

·       Revenue* up 17% to £73.5m (H1 2015: £62.6m)

·       Adjusted operating profit before tax** up 27% to £2.8m (H1 2015: £2.2m)

·       Profit before tax up 18% to £2.6m (H1 2015: £2.2m)

·       Order book increased by 33% to £163.7m at 30 September 2016 (30 September 2015: £123.4m)

·       Adjusted** earnings per share up 12% to 3.7p (H1 2015: 3.3p)

·       Interim dividend up 20% at 0.6p per Ordinary Share (H1 2015: 0.5p)

·       Cash outflow from operations reduced to £2.6m (H1 2015: £5.3m)

·       Group exposure to defined pension liabilities closed out with return of surplus to WYG

*Including share of Joint Venture revenues

**Before separately disclosed items

 

Operational highlights:

Strong UK growth and growing international pipeline of opportunities

 

Group

·        Continued to invest in IT, business infrastructure and capabilities to support future growth

·        Group operating margin before separately disclosed items up from 3.6% to 3.8%

 

UK (73% of Group revenue)

·       16% increase in revenue

·       UK order book up 31% to £79.9m (30 September 2015: £60.9m)

·       Secured a number of major projects including overseeing the roll-out of one of the UK's largest portfolios of new privately rented residential properties and appointed Programme Manager on the RAF Lossiemouth Development Programme

·       Won five lots of the Transport for Greater Manchester Framework and re-appointed to the National Grid property framework

·       Our Asset Management team has established a strong position in the retail sector, working with the Co-operative, McDonalds, TGI Fridays, Wagamama and Network Rail's tenanted retail units

 

International (27% of Group revenue)

·      Overall revenue growth and return to profitability despite project delays which held back first half revenues in EAA

·      MENA Region delivered a near 100% increase in revenue

·      International order book increased by 34% to £83.8m (30 September 2015: £62.5m)

·      Major project wins included: €13.1m Western Balkans IPF5 programme, €6.6m of projects funded by European Structural Funds in support of the Polish government's initiative to help the unemployed and €5.4m of EU technical assistance projects in Turkey

 

Outlook:

·       Order book increased to £163.7m as at 30 September 2016, providing a sound platform from which to deliver a full year performance in line with current market expectations 

·       UK business expected to benefit from the continued flow of opportunities from our public and private sector clients as a result of ongoing economic growth and the major programmes of infrastructure spending announced in the Autumn Statement

·       Market leading local businesses in Poland, Croatia and Turkey ideally placed to take advantage of the pipeline of opportunities from EU funds

 

Paul Hamer, Chief Executive Officer of WYG, said:

"We are pleased to report that the growth in order book seen last year has been successfully converted into significantly improved revenue, profitability and cash flow performance, particularly in the UK. Despite some initial project delays, reflecting uncertainty immediately around the time of the UK referendum on the EU, we are seeing positive signs in almost all of our core services.

"UK government and infrastructure spending, which are the main drivers of WYG's front-end planning and consultancy business, have remained resilient and we are very encouraged by the proposals contained in the Autumn Statement.

"Internationally, the scale of the opportunity across our target markets continues to grow. WYG is well established, with market leading local businesses in Poland, Croatia and Turkey, each of which is ideally placed to take advantage of the pipeline of opportunities as EU funds are deployed under the new multi-annual financial framework. To date we have been successful in securing major new programmes resulting in the significant growth of our order book in the EAA and MENA Regions.

"The strong first half provides a sound performance platform whilst the substantial increase in contracted work deliverable during the second half gives us good forward visibility. This combination underpins our view that we will deliver a full year performance which is in line with current market expectations.  In addition, with significant headroom within our £25m bank facility, we will continue to invest in the business to support future growth and to selectively review acquisition opportunities."

 

For further information, please contact:

 

WYG plc

Paul Hamer, Chief Executive Officer

Iain Clarkson, Chief Financial Officer

 

Tel: +44 (0) 113 278 7111

MHP Communications             

John Olsen / Katie Hunt / Ollie Hoare

 

Tel: +44 (0) 203 128 8100

N+1 Singer

Sandy Fraser / Nick Owen

 

Tel: +44 (0) 207 496 3000

WH Ireland Limited

Tim Feather

Ed Allsopp

 

Tel: +44 (0) 207 220 1666

+44 (0) 113 394 6611

+44 (0) 117 945 3470



 

CHAIRMAN'S STATEMENT

Introduction

I am very pleased to report continued momentum in the growth of the business, with profit before tax (before separately disclosed items) for the half year ending 30 September 2016 up 27% on revenues which are 17% ahead of the comparative period. In addition, the Group order book, our key lead indicator, increased to £163.7m as at 30 September 2016, up 33% compared with the corresponding time last year and up 9% since 31 March 2016.

 

Specifically, the Autumn Statement contained welcome announcements on proposed UK government spending through the creation of the £23bn National Productivity Investment Fund. The majority of the fund will be targeted at housing and transport to accelerate new housing supply and ensure the UK's transport networks are fit for the future. Not only are both these sectors firmly aligned with WYG's core areas of competence in planning and transport planning, they feed our other disciplines including environment, and urban & landscape design. We anticipate a significant number of new opportunities when specific projects are decided and key clients, such as the Homes and Communities Agency and many local councils, look to businesses like WYG with a strong track record of delivering major programmes of work.   We are also encouraged by the announcement of new money for Local Enterprise Partnerships (LEPs), particularly as the largest proportion of this spending will be directed to the UK regions where we have a strong footprint and excellent links with many of the LEPs.

 

As an organisation that contracts directly with the EU, we are mindful of the challenges presented by the outcome of the UK's EU Referendum and the on-going uncertainty surrounding its eventual implementation. To date we have seen no material impact on financial performance from the decision. Our international business model is robust and agile and our UK and international subsidiaries have continued to win work with the major international finance institutions and other clients.  In the run up to the EU Referendum we undertook a review of the potential impact that a vote to leave the EU would have on the business and we have taken steps to ensure that our model remains appropriate and resilient. Nevertheless, we continue to keep the issue under very close scrutiny.

Strategy

Our strategy is to grow by developing and serving the markets for our consultancy and international development expertise through both organic investment and selective acquisition.

 

We are currently finalising a new strategic growth plan for the Group which aims to consolidate our position as a trusted adviser to our clients whilst ensuring the business has an efficient, agile and resilient structure. This plan will fully harness the specialist skills across our business and be focused on addressing the major challenges of climate adaptation, energy planning, major infrastructure projects, water management, mass migration and the UK housing shortfall. In today's markets, we believe that agility will be key to future success. The new structure will position WYG best to generate, and rapidly respond to, the most attractive opportunities presented by our clients' and potential clients' needs as they navigate the current uncertain and dynamic global market and political environment.  We expect to provide a further update in Spring 2017.

 

Business Review

Despite some initial project delays in our UK Region, at the time of the UK referendum, we are seeing positive signs in almost all of our core services. UK government and infrastructure spending have remained resilient and the Group has won a number of new contracts, ranging from projects for the Ministry of Defence at RAF Lossiemouth and implementing the Army Basing Plan on a number of sites around Salisbury Plain to preparing a strategic masterplan for the town of Baldock for Hertfordshire County Council.  

Our projects with the UK's Ministry of Defence and Foreign & Commonwealth Office take WYG into a number of major overseas regions, including Bahrain and Kenya, and complement our growing relationship with the Department for International Development (DfID) as we expand our portfolio of work in Fragile and Conflict Affected States (FCAS).

The scale of the opportunity in other targeted international markets continues to grow, unaffected by the UK's referendum result. WYG is well established and owns the leading local businesses in Poland, Croatia and Turkey. These are ideally placed to take advantage of the significant opportunities that are available as EU funding is deployed under the current multi-annual financial framework (MFF 2014-2020).

 

Although the EAA Region had a slower than anticipated start to the year, as we announced on 8 August 2016 we have won a number of important new contracts and contract extensions and are encouraged by the pipeline of opportunities. We have undertaken some restructuring of this business to better align it with the new work the team has won and the business opportunities offered by the European Structural Funds.

 

We are pleased to report that there has been no immediate impact on our MENA Region from the recent political unrest in Turkey, although we continue to monitor developments closely. We have secured further projects during the period and our budgeted revenues for the remainder of the current financial year are fully underpinned by contracted work and we therefore expect this Region to continue delivering a strong performance.

 

The Group has made a number of investments in premises, programmes to enhance its IT hardware and software, and the ongoing rollout of our project management and other essential programmes.

Our portfolio of recently acquired companies is performing in line with overall expectations. We continue to keep a number of new acquisition opportunities under review.

Results

Gross revenue (including our share of Joint Venture revenues) was up £10.9m to £73.5m (H1 2015: £62.6m).   We continue to focus on tightly managing our cost base whilst ensuring we have the most appropriate mix of people and capabilities to win and deliver attractive contract opportunities. This ongoing focus has resulted in Group operating margin (before separately disclosed items) increasing from 3.6% to 3.8%

Underlying profit performance also improved with adjusted profit before tax (before separately disclosed items) increasing by 27% to £2.8m (H1 2015: £2.2m). On a statutory basis, the Group made a profit before tax (after separately disclosed items) of £0.8m (H1 2015: £2.1m) on pre-joint-venture revenues of £72.9m (H1 2015: £62.3m). The reduction in statutory profit before tax was due to a one off credit in the prior period relating to the legal settlement of the 1986 pension scheme. This was included in separately disclosed items.

Earnings per share adjusted to exclude separately disclosed items was 3.7p (H1 2015: 3.3p).

The Group closed the period with net debt of £4.9m (H1 2015: net cash of £3.4m) reflecting the higher working capital requirement driven by the increase in revenue, deferred consideration on acquisitions and planned spending on legacy items. Operating cashflow improved significantly with an outflow of £2.6m (H1 2015: £5.3m outflow). By focusing on cash generation and the effective management of working capital, we expect cash balances (before any further spending on any potential new acquisitions) to show their usual increase in the second half. 

People and Awards

In response to increasing demand for our services, total headcount as at 30 September 2016 has increased to 1,647 (31 March 2016: 1,596) and we maintain our focus on ensuring our people and capabilities are aligned to the key opportunities we are seeing. To support this growth in demand we have strengthened our internal recruitment capability, now directly sourcing more than 80% of all new recruits. Furthermore, we have seen improved levels of employee retention and engagement reflecting investment in our remuneration and reward structures, our graduate development programme, succession planning and training in performance and absence management.

The performance of our business has been recognised in a number of prestigious awards in the period. These were not only in respect of specific projects such as Kirkstall Forge (Best Brownfield Infrastructure Award) and the Welsh National Sailing Academy (Sustainability Award) but also on a national level, winning the Association for Consultancy and Engineering's Best UK Business Performance Award for a large firm and the AIM Awards Best Investor Communication Award which recognises "honest, accurate and consistent communication with all levels of shareholders and potential shareholders".

Dividend

Reflecting the Board's confidence in the Group's improving results and outlook, a higher interim dividend of 0.6p per ordinary share (30 September 2015: 0.5p) has been approved. The interim dividend will be paid on 3 April 2017 to shareholders on the register on 10 March 2017 and WYG shares will trade ex-dividend on 9 March 2017.

Pensions

WYG gave notice to the Trustees of the WYD Pension Scheme to trigger the winding up of the Scheme with effect from 1 June 2016. The winding up has resulted in the return of a surplus to WYG of £0.5m net of tax in September 2016. As a result of these actions, WYG no longer has any exposure to defined benefit pension liabilities.

Outlook

Our UK business is expected to benefit from the continued flow of opportunities from our public and private sector clients as a result of ongoing economic growth and the major programmes of infrastructure spending announced in the Autumn Statement. Our core front-end planning and consultancy business is ideally positioned to advise clients on how to create and protect value from their investments and assets, and to benefit from early stage feasibility work. This frequently leads to further work as WYG is retained to develop and enable projects and manage risks for our clients through the full life cycle of their projects.

Internationally, the scale of the opportunity across our target markets continues to grow. WYG is well-established with market leading local businesses in Poland, Croatia and Turkey which are ideally placed to take advantage of the pipeline of opportunities as EU funds flow under the MFF 2014-2020. These remain unaffected by the UK's vote to leave the EU, as evidenced by the major new projects won and the significant growth in the order book of our EAA and MENA Regions.

The strong first half provides a sound performance platform whilst the substantial increase in contracted work deliverable during the second half gives us good forward visibility. This combination underpins our view that we will deliver a full year performance which is in line with current market expectations.  In addition, with significant headroom within our £25m bank facility, we will continue to invest in the business to support future growth and to selectively review acquisition opportunities.

 

 

Mike McTighe

Chairman

1 December 2016



 

BUSINESS REVIEW  

Operationally, the Group is structured, and reports, on a regional basis as described below.

UK (72.9% of Group Revenue) - strong revenue growth

The UK region generated a 16% increase in revenue to £53.6m (H1 2015: £46.2m) with an operating profit before separately disclosed items and central overheads of £4.6m (H1 2015: £4.5m). 

Our Management Services discipline has continued to secure a number of major projects, including supervising the roll-out of one of the UK's largest portfolios of new privately rented residential properties for Sigma Capital and our recent appointment as Programme Manager on the RAF Lossiemouth Development Programme, where we are providing technical support and enabling infrastructure delivery to support the arrival of new aircraft.

 

The Asset Management team has established a strong position in the retail sector, working with the Co-operative retail group, McDonalds, TGI Fridays, Wagamama and Network Rail's tenanted retail units. In addition, two long term surveying frameworks have been secured in the North West with United Utilities. Growth has also continued in the PFI market, defence & justice and nuclear sectors.

 

The planning business cemented its place as one of the UK's foremost planning consultancies.  The Manchester planning team won the RTPI North West Award for Collaboration, for its work on Chester's new cultural centre Storyhouse, whilst our Southampton team won the national Planning and Placemaking Award for Stakeholder Engagement recognising its work on the Linden Homes housing development at Broughton.

 

The Urban and Landscape Design team have been commissioned to develop a comprehensive master plan for the creation of a new Garden Village in Cheshunt, Hertfordshire and to prepare a strategic master plan for the town of Baldock. In addition, our architects have helped the Welsh Government secure the location of Aston Martin's manufacturing centre for its new crossover vehicle. 

We have been appointed on five lots of the Transport for Greater Manchester Framework and have been selected to undertake major highway design and supervision roles on schemes including the Ely Bypass and Snowhill Phases 1 and 2 in Birmingham.

 

Following our work on the award winning Welsh Sailing Academy in Phwelli, we have secured design work for a number of further leisure projects. We have also been awarded a commission for structural and building services design for the new Keele Institute for Entrepreneurship at Keele University.

 

The Environment business also continues to grow, with particular successes in the development, infrastructure and, increasingly, corporate sectors where we have achieved increased revenues from our due diligence services. Our recent re-appointment to the National Grid property framework provides strong underpinning for our order book and extends our continuous relationship with this client to 25 years.

 

Our total UK order book has continued to grow, closing at £79.9m: up 31% from 30 September 2015.

Europe, Africa and Asia (EAA) (13.2% of Group Revenue) - growing international pipeline of opportunities

WYG operates through four sub-regional business units in EAA - 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 £9.7m (H1 2015: £10.9m), which after the management actions of last year again delivered a breakeven operating position before separately disclosed items and central overheads.

In CEE, the largest wins were recorded in Poland, where we won a portfolio of labour market projects for Polish government institutions with a secured value of €6.6m potentially rising to €12.4m. These projects, which are to be implemented in three regions, involve the provision of targeted training tailored to job seekers, as well as the provision of job search facilities, placement and counseling services to the unemployed.

 

SEE continued to be the EAA's strongest performer in the period, delivering a portfolio of regional socio-economic and infrastructure projects, especially in Croatia. In July we were pleased to announce our position, as consortium leader on the latest phase of the multi-year Infrastructure Projects Facility (IPF) in the Western Balkans. WYG has been involved in this programme since 2008 and the latest contract, due to last four years, is estimated to be worth €13.1 m. 

 

In Africa and Asia regions our services in Public Financial Management and Monitoring and Evaluation practices recorded strong performances, as we benefitted from their position at the very core of our International Development offering in those regions. The region benefitted from the strategic push into Africa leading to several significant wins in our targeted sectors. In light of the changing market conditions in Africa, we have introduced a number of steps to better align our offering with the regional footprint, further enhancing our flexibility in working throughout the continent.

 

The longer term outlook for EAA remains very positive. International development opportunities in Africa and Asia continue to fuel longer term order-book growth in the region, whilst the EU funding cycle has experienced renewed momentum. The Migration Partners have been successful in engaging with EU institutions at senior levels and we anticipate that opportunities will flow as the EU's migration strategy develops over the next 12 months.  As a result, the conditions are in place for sustained growth across the region.

 

At 30 September 2016, the Region's order book stood at £60.0m (2015: £42.8m).

 

Middle East and North Africa (MENA) (13.9% of Group Revenue) - strong revenue and profit growth

The MENA region, which includes Turkey, has enjoyed a very successful first half, contributing revenue of £10.2m (H1 2015: £5.5m), and generating an operating profit before separately disclosed items and central overheads of £0.4m (H1 2015: loss of £0.2m).

The Region generates most of its revenue from socio-economic, technical and engineering programmes, the majority of which are funded under the Instrument for Pre-Accession Assistance (IPA), a component of the MFF 2014-2020. We continue to focus on our core strength of socio-economic consultancy, where we are the market leader in Turkey, having maintained and further extended our leading position with a number of new awards.

 

In technical services, we have maintained our market leading position in the water & waste water sector, where we are currently delivering five major projects, including two contract extensions namely for Ordu and Siverek Water & Wastewater Projects. In August, we were pleased to announce that we had been awarded three new technical assistance projects worth €5.4m in aggregate.  These are aimed at developing common product processes and infrastructure among SMEs and entrepreneurs, increasing regional competitiveness and developing the operational capacity of a major logistics centre for the port city of Samsun on the Black Sea coast.

 

We continue to work on a number of new business opportunities with various international development agencies, and we began work on private sector and other EU-funded projects in the Middle East. These efforts are yielding results and we hope for continued growth in this area.

 

We expect the current high volume of opportunities to continue in the second half and, given our success to date, this should help to underpin a strong performance in the MENA region for the full year.

 

At 30 September 2016, the Region's order book stood at £23.3m (2015: £19.5m).

Unaudited consolidated income statement

For the six months ended 30 September 2016

 

 



Six months ended 30 September 2016

 

         Six months ended 30 September 2015

 

Year ended

31 March 2016

Audited

 


Notes

£'000

£'000

£'000

Continuing operations





Revenue including share of joint venture revenues


73,456

62,589

133,482

Less share of joint venture revenues


(513)

(312)

(665)

Revenue

5

72,943

62,277

132,817

Operating expenses


(72,037)

(60,150)

(130,377)

Share of result of joint ventures


72

2

(17)

Operating profit*


978

2,129

2,423

Finance costs

6

(220)

(68)

(201)

Profit before tax


758

2,061

2,222

Tax

7

-

133

608

Profit for the period


758

2,194

2,830

 

 

Profit attributable to:

Owners of the parent


758

2,206

2,832

Non controlling interests


-

(12)

(2)



758

2,194

2,830






Earnings per share

8




Basic


1.1p

3.1p

4.0p

Diluted


1.0p

3.1p

3.9p

 

* Operating profit 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 2016

 

 

 


Six months

ended 30

September

2016

 

Six months

ended 30

September

2015

 

Year to

31 March

 2016

 



£'000

£'000

£'000

Profit for the period


758

2,194

2,830

Other comprehensive income:





Currency translation differences


962

(100)

(195)

Tax on items taken directly to equity


-

-

(572)

Impact of defined pension asset ceiling*


-

(459)

2,060

Remeasurement of net defined pension liability*


-

926

845

Other comprehensive income for the period


962

367

2,138

Total comprehensive income for the period


1,720

2,561

4,968

 

Total comprehensive income attributable to:





Owners of the parent


1,720

2,573

4,970

Non controlling interests


-

(12)

(2)



1,720

2,561

4,968

 

*These items will not be reclassified subsequently to profit or loss.



Unaudited consolidated balance sheet

As at 30 September 2016

 

 

 

 

 

As at

30 September

2016

 

As at

30 September

2015

 

As at

31 March

2016

 


Notes

£'000

£'000

£'000

Non-current assets





Goodwill


18,193

14,523

18,193

Other intangible assets

10

8,312

5,077

9,295

Property, plant and equipment

10

3,505

2,640

3,181

Investments in Joint Ventures


518

395

407

Deferred tax assets


1,288

450

1,224



31,816

23,085

32,300

Current assets





Work in progress


31,916

26,248

30,372

Trade and other receivables


28,796

19,176

22,842

Tax recoverable


300

67

207

Retirement benefit asset


-

-

799

Cash and cash equivalents


7,613

7,947

8,231



68,625

53,438

62,451

Current liabilities





Trade and other payables


(46,882)

(33,860)

(46,682)

Current tax liabilities


(1,613)

(530)

(931)

Financial liabilities

11

(7,500)

(4,500)

(3,050)



(55,995)

(38,890)

(50,663)

Net current assets


12,630

14,548

11,788

Non-current liabilities





Financial liabilities

11

(5,000)

(514)

(5,000)

Retirement benefit obligation


(2,225)

(2,567)

(2,356)

Deferred tax liabilities


(2,282)

(1,250)

(2,511)

Provisions, liabilities and other charges


(5,204)

(7,490)

(5,940)



(14,711)

(11,821)

(15,807)

Net assets


29,735

25,812

28,281

Equity attributable to the owners of the parent





Share capital


73

72

73

Hedging and translation reserve


1,347

480

385

Retained earnings


28,315

25,108

27,791



29,735

25,660

28,249

Non controlling interest               


-

152

32

Total equity


29,735

25,812

28,281






 

Unaudited consolidated statement of changes in shareholders' equity

For the six months ended 30 September 2015

 

 

 

Share

capital

Translation

reserve

 

Retained

earnings

Total

 

Non controlling interest

 

 

Total equity


£'000

£'000

£'000

£'000

£'000

£'000

Balance as at 1 April 2015

72

21,730

22,382

164

22,546

Profit/(loss) 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

Dividend payable

-


(479)

(479)

-

(479)

Balance at 30 September 2015

72

480

25,108

25,660

152

25,812

 

 

 

 

Unaudited consolidated statement of changes in shareholders' equity (continued)

For the six months ended 31 March 2016

 

 

Share

capital

Translation

reserve

Retained

earnings

Total

 

Non controlling interest

 

 

Total equity


£'000

£'000

£'000

£'000

£'000

£'000

Balance as at 1 October 2015

72

            480

25,108

25,660

152

25,812

Profit for the period

-

-

626

626

10

636

Other comprehensive (expense)/income:







Currency translation differences

-

(95)

-

(95)

-

(95)

Tax on items taken directly to equity

-

-

(572)

(572)

-

(572)

Impact of defined pension asset ceiling

-

-

2,519

2,519

-

2,519

Remeasurement of net defined pension liability

-

-

(81)

(81)

-

(81)

Other comprehensive (expense)/income for the period

-

(95)

1,866

1,771

-

1,771

Total comprehensive (expense)/income for the period

-

(95)

2,492

2,397

10

2,407

Share based payments

-

-

403

403

-

403

Purchase of treasury shares

1

-

-

1

-

1

Dividends

-

-

(342)

(342)

-

(342)

Reduction in minority shareholding

-

-

130

130

(130)

-

Balance at 31 March 2016

73

385

27,791

28,249

32

28,281

 

For the six months ended 30 September 2016

 

 

 

Share

capital

Translation

reserve

Retained

earnings

Total

 

Non controlling interest

 

 

Total equity


£'000

£'000

£'000

£'000

£'000

£'000

Balance at 1 April 2016

73

385

27,791

28,249

32

28,281

Profit for the period

-

-

758

758

-

758

Other comprehensive income:







Currency translation differences

-

962

-

962

-

962

Other comprehensive income for the period

-

962

-

962

-

962

Total comprehensive income for the period

-

962

758

1,720

-

1,720

Share based payments

-

-

418

418

-

418

Dividends

-

-

(684)

(684)

-

(684)

Reduction in minority shareholding

-

-

32

32

(32)

-

Balance at 30 September 2016

73

1,347

28,315

29,735

-

29,735

 

 

 

Unaudited consolidated cash flow statement

For the six months ended 30 September 2016

 



Six months

ended 30

September

2016

 

 

Six months

ended 30

September 2015

 

Year ended

31 March

 2016

 


Note

£'000

£'000

£'000

Operating activities





Cash used in operations

12

(1,981)

(5,102)

(966)

Interest paid


(199)

(1)

(180)

Tax paid


(463)

(185)

(321)

Net cash used in operating activities


(2,643)

(5,288)

(1,467)






Investing activities





Purchases of property, plant and equipment


(1,157)

(956)

(2,092)

Purchases of intangible assets (computer software)


(197)

(186)

(385)

Purchase of businesses (net of cash acquired)


(723)

(2,511)

(7,875)

Net cash used in investing activities


(2,077)

(3,653)

(10,352)






Financing activities





Proceeds on issue of shares


-

-

1

Drawdown of loan


4,500

4,500

8,000

Dividends paid to company shareholders


(684)

-

(821)

Net cash generated from financing activities


3,816

4,500

7,180

Net decrease in cash and cash equivalents


(904)

(4,441)

(4,639)

Cash and cash equivalents at beginning of period


8,231

12,324

12,324

Effects of foreign exchange rates on cash and cash equivalents


286

64

546

Cash and cash equivalents at end of period


7,613

7,947

8,231

 


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 2016 should be read in conjunction with the financial statements for the period ended 31 March 2016, 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 1 December 2016.

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 2016 were approved by the Board of Directors on 7 June 2016 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 2016, 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 joint venture revenues

Operating profit/(loss)

 

 

 

Profit/(loss) before tax


£'000

£'000

£'000

Six months ending 30 September 2016




Before separately disclosed items

73,456

2,820

2,600

Separately disclosed items

-

(1,842)

(1,842)

Total

73,456

978

758

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

Year ending 31 March 2016




Before separately disclosed items

133,482

7,221

7,020

Separately disclosed items

-

(4,798)

(4,798)

Total

133,482

2,423

2,222

 

 

Details of separately disclosed items


Six months

ended 30

September

2016

 

Six months

ended 30

September 2015

Year ended

31 March

 2016


£'000

£'000

£'000

Share option costs

(317)

(735)

(1,475)

Amortisation of acquired intangible assets

(973)

(630)

(1,533)

Other (costs)/credits

(552)

1,266

(1,790)

Separately disclosed items

(1,842)

(99)

(4,798)

 

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 (costs)/credits relate to restructuring costs. The prior period also includes a credit relating to the legal settlement of the 1986 pension scheme, the release of surplus vacant leasehold provisions and costs in relation to the bank refinancing.

 

 

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 executive management team comprising the Chief Executive Officer and the Chief Financial Officer. 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 executive management team as the primary means for analysing trading performance. The Executive team 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 2016 are as follows:


UK

 

EAA

MENA

Group


£'000

£'000

£'000

£'000






Revenues including share of joint venture revenues

53,572

9,694

10,190

73,456

Less share of joint venture revenues

-

(513)

-

(513)


53,572

9,181

10,190

72,943

Result





Operating profit before central overheads and separately disclosed items

4,568

5

408

4,981

Central overheads




(2,161)

Operating profit before separately disclosed items




2,820

Separately disclosed items (Note 4)




(1,842)

Operating profit




978

Finance costs




(220)

Profit before tax




758

Tax




-

Profit for the period




758

 

Profit attributable to the owners of the parent




758

Profit attributable to non-controlling interests




-

 

 

5. Segmental information (continued)

 

The segmental results for the six months ended 30 September 2015 are as follows:


UK

 

EAA

MENA

Group


£'000

£'000

£'000

£'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) excluding 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 attributable to equity shareholders




2,194

 

Profit attributable to the owners of the parent




2,206

Loss attributable to non-controlling interests




(12)

 

 

6. Finance costs


Six months

ended 30

September

2016

 

Six months

ended 30

September 2015

Year ended

31 March

 2016


£'000

£'000

£'000

Interest on bank loans, guarantees, bonds and overdrafts

220

59

180

Interest related to defined benefit scheme

-

9

21

Total finance costs

220

68

201

 

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 profit before tax for the period.

  

 

8. Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:


Six months

ended 30

September

2016

 

Six months

ended 30

September 2015

Year ended

31 March

 2016


£'000

£'000

£'000

Earnings for the purposes of basic and diluted earnings per share being profit for the year

758

2,206

2,832

Adjustment relating to separately disclosed items (see note 4)

1,842

99

4,798

Tax impact of separately disclosed items

-

-

(599)

Earnings for the purposes of basic and diluted adjusted earnings per share

2,600

2,305

7,031

 


Six months

ended 30

September

2016

Six months ended 30

September

2015

Year ended

31 March

 2016


Number

Number

Number

Number of shares




Weighted average number of shares for basic earnings per share

70,638,773

70,688,773

70,638,773

Effect of dilutive potential ordinary shares:




    Share options

3,099,555

-

1,317,148

Weighted average number of shares for diluted earnings per share

73,738,328

70,688,773

71,955,921

 

 




Earnings per share




Basic

1.1p

3.1p

4.0p

Diluted

1.0p

3.1p

3.9p





Adjusted earnings per share




Basic

3.7p

3.3p

10.0p

Diluted

3.5p

3.3p

9.8p

The adjusted earnings per share is calculated after excluding separately disclosed items. This more accurately reflects the underlying performance of the Group.

 

 

9. Dividends

The interim dividend of 0.6p per share (2015: 0.5p per share) was approved on 1 December 2016 and as such has not been included as a liability in these financial statements.

The final dividend of 1.0p per share for the year ended 31 March 2016 was approved by the shareholders at the Annual General Meeting on 22 September 2016 and was paid on 28 September 2016. This was not recognised in the financial statements for the year ended 31 March 2016.

  

 

10. Property, plant and equipment and intangible assets


Property, plant and

equipment

Intangible

assets


£'000

£'000

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

-

909

Depreciation and amortisation

(621)

(858)

Exchange differences

(2)

4

Closing net book amount as at 30 September 2015

2,640

5,077

Six months ended 30 September 2016



Opening net book amount as at 1 April 2016

3,181

9,295

Additions

1,157

197

Depreciation and amortisation

(857)

(1,185)

Exchange differences

24

5

Closing net book amount as at 30 September 2016

3,505

8,312

 

 

 

 

11. Financial liabilities


30

September

2016

 

30

September 2015

31 March

 2016


£'000

£'000

£'000

Current




Bank loans and overdrafts (all payable on demand)

7,500

4,500

3,000

Redemption liability

-

-

50


7,500

4,500

3,050

Non-current




Bank loans

5,000

-

5,000

Redemption liability

-

514

-


5,000

514

5,000





Financial liabilities are repayable as follows:




On demand or within one year

7,500

4,500

3,050

Greater than one year

5,000

514

5,000


12,500

5,014

8,050

 

The redemption liability (the fair value of an option to purchase the remaining 5% of Arndale 22 Limited) was settled in the period.

 

12. Cash used in operations


Six months

ended 30

September

2016

 

Six months ended 30

September

2015

 

 

Year ended

31 March

 2016

 


£'000

£'000

£'000

Profit from operations

978

2,129

2,423

Adjustments for:




Depreciation of property, plant and equipment

857

621

1,362

Amortisation of intangible assets

1,185

858

1,979

Loss on disposal of property, plant and equipment

-

-

58

Share options expense

317

735

1,475

Operating cash flows before movements in working capital

3,337

4,343

7,297

Increase in work in progress

(1,545)

(5,073)

(7,508)

(Increase)/decrease in receivables

(5,954)

2,147

365

Increase/(decrease) in payables

2,181

(6,519)

(1,120)

Cash used in operations

(1,981)

(5,102)

(966)

13. Analysis of net cash/(debt)


At 1 April

2015

Cash flows

Other

non-cash

items

At 30

September

2015


£'000

£'000

£'000

£'000

Cash and cash equivalents

12,324

(4,441)

64

7,947

Bank loans and overdrafts

-

(4,500)

-

(4,500)

Net cash

12,324

(8,941)

64

3,447


At 1 April

2016

Cash flows

 

Other

non-cash

items

At 30

September

2016


£'000

£'000

£'000

£'000

Cash and cash equivalents

8,231

(904)

286

7,613

Bank loans and overdrafts

(8,000)

(4,500)

-

(12,500)

Net cash/(debt)

231

(5,404)

286

(4,887)

 

Restricted cash relates to restricted access accounts in WYG International Limited.

Other non-cash movements represent currency exchange differences.

14. Related party transactions

There have been no changes in the nature of related party transactions as described in the 2016 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 2016.

15. 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
 
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