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WYG set for Autumn Statement boost

The chancellor's £23bn pledged infrastructure spending could prove fruitful for the project management and consultancy business
December 1, 2016

The promise of a £23bn cash injection into the infrastructure sector, outlined in the recent Autumn Statement, should be good news for project management and consultancy business WYG (WYG). The company is already geared into central and regional government departments and so chief executive Paul Hamer thinks the company's work in markets "of national significance" will mean it is likely to benefit. Its order book has grown by a third to £163.7m, which Mr Hamer called a "record level". Contracts linked to projects such as the development of RAF Lossiemouth, finding locations for army sites around Salisbury and its involvement in various transport and town planning projects boosted this figure.

IC TIP: Buy at 109p

Importantly its international division has returned to profitability. It was held back last year due to a funding delay from the European Union (EU) for certain development projects. Now this has been confirmed, WYG can get on with projects in countries including Poland, Croatia and Turkey, all places where it considers itself the market leader. Mr Hamer said EU contracts last on average for two to three years and, towards the end of that period, it can bid for new projects. This provides "absolute visibility" for the future of the business, Mr Hamer said.

Analysts at N+1 Singer expect pre-tax profit of £9.7m for the year to March 2017, giving EPS of 12.6p, up from £7m and 9.8p in FY2016.

WYG (WYG)
ORD PRICE:109pMARKET VALUE:£75m
TOUCH:105-112p12-MONTH HIGH:145pLOW: 94p
DIVIDEND YIELD:1.5%PE RATIO:55
NET ASSET VALUE:43p*NET DEBT:16%

Half-year to 30 SepTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201562.62.13.10.5
201673.50.81.10.6
% change+17-63-65+20

Ex-div: 9 Mar

Payment: 3 Apr

*Includes intangible assets of £26.5m, or 38.5p a share