A combination of higher sales volumes, self-help measures and the British government pushing through a series of infrastructure projects more than tripled underlying operating profit at engineering consultant WYG (WYG) to £1.4m in the first half. Probably the most important point, though, is that the company's outsourcing niche in project planning and management looks to have ridden out the storm that is currently engulfing the big, universal outsourcers.
The United Kingdom represents 55 per cent of sales and the division returned to profit during the half, creeping up by £0.3m into the black. Chief executive Paul Hamer said he expected the UK to deliver significant amounts of volume growth this year with the initiation of several major infrastructure projects. An example of what he meant was the £150m contract win, after the period-end, from the Ministry of Defence to redevelop a major UK military base. The Europe, Africa & Asia division, which benefits from long-term contracts financed by international aid agencies, saw improved sales of £19.8m, with operating profits doubling to £1.2m. The group order book has grown by 6 per cent to £82.6m, too, compared with the 31 March year-end, which represents between three to four months of work.
Broker WH Ireland forecasts full-year adjusted pre-tax profit of £3.9m, giving adjusted EPS of 5p (from £0.7m and 0.9p in 2013).
WYG (WYG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 109p | MARKET VALUE: | £70.5m | |
| TOUCH: | 108-110p | 12-MONTH HIGH: | 120p | LOW: 65p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 26p* | NET CASH: | £12.5m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 61.8 | -0.74 | -1.30 | nil |
| 2013 | 63.9 | -0.74 | -1.50 | nil |
| % change | +3 | - | - | - |
*Includes intangible assets of £16.8m, or 26p a share | ||||
