It’s testament to just how bearish investors had been on WYG’s (WYG) prospects that the shares rose briefly after the engineering consultancy detailed its descent into a reported loss at the half-year mark. On an underlying basis, adjusted operating profits decreased by 64 per cent, due to increased operating expenses, as the group increased capacity in anticipation of work that either materialised slower, or was at lower volumes, than originally expected.
Management expects a turnaround in the business in the second half of the year, citing “significant improvement” in consultancy services with an increased number of contracts coming through framework agreements. The international business is also expected to improve as large projects in Southern Africa and the Western Balkans begin to ramp up.
The order book has remained robust in spite of the challenges the group has been facing, increasing 17 per cent to £170m in the period, with more than £50m to be delivered by the financial year-end in March 2018.
Analysts at N+1 Singer predicted things would get worse before they got better for WYG, with adjusted profit before tax hitting £2.8m and EPS 3.4p for the year to March 2018, before beginning to recover in FY2019 (from £8.2m and 11.9p in FY2017).
| WYG (WYG) | ||||
| ORD PRICE: | 39p | MARKET VALUE: | £28.4m | |
| TOUCH: | 37-41p | 12-MONTH HIGH: | 137p | LOW: 37p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | na | |
| NET ASSET VALUE: | 39p* | NET DEBT: | 36% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 73.5 | 0.8 | 1.1 | 0.6 |
| 2017 | 76.2 | -2.8 | -3.8 | 0.6 |
| % change | +4 | -467 | -445 | |
| Ex-div: | 1 Mar | |||
| Payment: | 4 Apr | |||
| *Includes intangible assets of £24.7m, or 34p a share | ||||
