TIDMWYG
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 GBP73.5m (H1 2015: GBP62.6m)
-- Adjusted operating profit before tax** up 27% to GBP2.8m (H1 2015: GBP2.2m)
-- Profit before tax up 18% to GBP2.6m (H1 2015: GBP2.2m)
-- Order book increased by 33% to GBP163.7m at 30 September 2016
(30 September 2015: GBP123.4m)
-- 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 GBP2.6m (H1 2015: GBP5.3m)
-- 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 GBP79.9m (30 September 2015: GBP60.9m)
-- 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 GBP83.8m (30 September 2015: GBP62.5m)
-- Major project wins included: EUR13.1m Western Balkans IPF5
programme, EUR6.6m of projects funded by European Structural Funds
in support of the Polish government's initiative to help the
unemployed and EUR5.4m of EU technical assistance projects in
Turkey
Outlook:
-- Order book increased to GBP163.7m 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 GBP25m 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 Tel: +44 (0) 113 278 7111
Paul Hamer, Chief Executive
Officer
Iain Clarkson, Chief Financial
Officer
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
Tim Feather +44 (0) 113 394 6611
Ed Allsopp +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 GBP163.7m 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 GBP23bn 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 GBP10.9m to GBP73.5m (H1 2015: GBP62.6m). 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
GBP2.8m (H1 2015: GBP2.2m). On a statutory basis, the Group made a
profit before tax (after separately disclosed items) of GBP0.8m (H1
2015: GBP2.1m) on pre-joint-venture revenues of GBP72.9m (H1 2015:
GBP62.3m). 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 GBP4.9m (H1 2015:
net cash of GBP3.4m) 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
GBP2.6m (H1 2015: GBP5.3m 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
GBP0.5m 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 GBP25m 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 GBP53.6m
(H1 2015: GBP46.2m) with an operating profit before separately
disclosed items and central overheads of GBP4.6m (H1 2015:
GBP4.5m).
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
GBP79.9m: 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 GBP9.7m (H1
2015: GBP10.9m), 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 EUR6.6m potentially rising to
EUR12.4m. 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 EUR13.1 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 GBP60.0m
(2015: GBP42.8m).
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 GBP10.2m (H1 2015:
GBP5.5m), and generating an operating profit before separately
disclosed items and central overheads of GBP0.4m (H1 2015: loss of
GBP0.2m).
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 EUR5.4m 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 GBP23.3m
(2015: GBP19.5m).
Unaudited consolidated income statement
For the six months ended 30 September 2016
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2016
2016 2015 Audited
Notes GBP'000 GBP'000 GBP'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
Six months ended
ended 30 30 Year to
September September 31 March
2016 2015 2016
GBP'000 GBP'000 GBP'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 As at As at
30 September 30 September 31 March
2016 2015 2016
Notes GBP'000 GBP'000 GBP'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
Non
Share Translation Retained controlling Total
capital reserve earnings Total interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ -------- ----------- ---------- ------- ------------- --------
Balance as at 1 April
2015 72 580 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
Non
Share Translation Retained controlling Total
capital reserve earnings Total interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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
Non
Share Translation Retained controlling Total
capital reserve earnings Total interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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
Six months ended
ended 30 30 Year ended
September September 31 March
2016 2015 2016
Note GBP'000 GBP'000 GBP'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 Profit/(loss)
venture Operating before
revenues profit/(loss) tax
GBP'000 GBP'000 GBP'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 Six months
ended ended Year
30 30 ended
September September 31 March
2016 2015 2016
GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'000 GBP'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
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)
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
Six months ended
ended 30 30 Year ended
September September 31 March
2016 2015 2016
GBP'000 GBP'000 GBP'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 Six months
ended ended Year
30 30 ended
September September 31 March
2016 2015 2016
GBP'000 GBP'000 GBP'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 Six months
ended ended
30 30 Year ended
September September 31 March
2016 2015 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 Intangible
equipment assets
GBP'000 GBP'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 30
September September 31 March
2016 2015 2016
GBP'000 GBP'000 GBP'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 Six months Year
30 ended 30 ended
September September 31 March
2016 2015 2016
GBP'000 GBP'000 GBP'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)
Other At 30
At 1 April non-cash September
2015 Cash flows items 2015
GBP'000 GBP'000 GBP'000 GBP'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
--------------------------- ----------- ----------- ----------- -----------
Other At 30
At 1 April non-cash September
2016 Cash flows items 2016
GBP'000 GBP'000 GBP'000 GBP'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
END
IR FDDFISFMSEIF
(END) Dow Jones Newswires
December 01, 2016 02:00 ET (07:00 GMT)
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