30 Aug 2012 07:00
30 August 2012
WYG plc
Announcement re business in Ireland
As previously reported, WYG's business in the Republic of Ireland (the "Irish Business") has experienced extremely challenging trading conditions in recent years as a result of the wider economic conditions in Ireland and the severe decline in the Irish construction market. The Irish Business was built up through a series of 12 acquisitions between 1999 and 2008. A very significant factor leading to the trading underperformance of the Irish Business has been the unsustainable property costs and the legacy of claims associated with those acquisitions.
Although the directors of the Irish Business and members of its senior management have made every effort to reshape the business (including its property portfolio) to secure its viability, the legacy cost structure has proved insurmountable. The directors of WYG have therefore concluded that it is no longer viable to support this loss-making operation. As a consequence, WYG Ireland Limited and certain of the companies within the Irish Business have been left with no alternative but to apply for the appointment of a provisional liquidator over the Irish Business.
The directors of WYG plc estimate that the future legacy costs, primarily property-related, of supporting the Irish Business would have been €5 million and these sums will now be redirected towards underpinning the growth initiatives for the wider WYG business set out in the Group's annual report published on 4 July 2012.
The Irish Business's subsidiaries in Northern Ireland (the "Northern Irish Business") continue to trade profitably and are unaffected by the property issues that have impacted the Irish Business.
WYG plc (through its relevant subsidiaries) has submitted an offer to the provisional liquidators, Paul McCann and Stephen Tennant of Grant Thornton, for the Northern Irish Business. There can, however, be no certainty that this offer will be accepted, as the provisional liquidators will be seeking further expressions of interest in the Northern Irish Business over the next few days. In the meantime, this business will continue to trade normally.
Paul Hamer, Chief Executive Officer of WYG plc, said:
"We greatly regret the impact that this decision will have on all those associated with the Irish business. However, despite the very best efforts of its management team, it has become clear that the scale and nature of the legacy issues it faces are ultimately insurmountable. This move is the only responsible course of action for WYG's board to take."
ENDS
For further information, please contact:
WYG plc Tel: 0113 278 7111
Paul Hamer, Chief Executive Officer
Sean Cummins, Group Finance Director
MHP Communications Tel: 020 3128 8100
John Olsen / Katie Hunt / Vicky Watkins
Numis Securities Limited Tel: 020 7260 1000
Stuart Skinner/ Jamie Lillywhite (Nominated Adviser)
David Poutney/ Ben Stoop (Corporate Broker)