WYG posts first-half loss
December 06, 2017 – Consulting engineer WYG has posted a £2.8m pre-tax loss for the first half of its financial year, largely due to provisions against legacy contract claims.
For the six months ended 30th September 2017 WYG generated gross revenue up £2.7m (3.8%) to £76.2m (2016 H1: £73.5m).
Adjusted operating profit before tax slumped to £1.0m (2016 H1: £2.8m), but this excludes a £2.45m provision for contract claims.
As previously reported, WYG’s problems stem from delays in major international contracts and an over-optimistic assessment of some consultancy contracts.
On the plus side, the order book has increased to its highest level in recent years at £170m, up 17% since 31st March 2017.
Chief executive Douglas McCormick, who joined in June when predecessor Paul Hamer moved to Sir Robert McAlpine, said: “Although this is a disappointing set of results, reflecting the issues we highlighted in August and November 2017, there are positives. We continue to anticipate a stronger second half, consistent with our historical seasonal trading pattern and our guidance in November. We remain confident that the underlying business is robust and that, supported by a strong order book, we are taking the correct steps to return to a growth trajectory. Importantly, revenue is up on the comparative period and we are seeing major projects in both our principal business streams start to mobilise, albeit some months later than originally expected.
“My first six months at WYG have been very busy. We have been operationalising the commercial strategy announced in June 2017; extended our bank facility with HSBC; and completed a significant step to improve WYG’s position in the light of the potential impact of Brexit.
“Having met a number of major clients, visited almost all our offices and spoken with several hundred of our highly-skilled staff, I am reassured that WYG is a fundamentally sound business and that we have a strong platform from which to grow in the medium term.”