WYG Regulatory News (WYG)

7 June 2012

WYG plc ("WYG" or the "Group")

PRELIMINARY RESULTS

WYG plc, the global project management and technical consultancy, announces its audited preliminary results for the year to 31 March 2012.

Financial overview:

·; Revenue at £139.9m (nine months to 31 March 2011: £121.5m)

·; Net Revenue at £123.4m (nine months to 31 March 2011: £106.7m)

·; EBITDA loss of £1.5m (nine months to 31 March 2011: £2.2m profit)

·; Operating loss* of £3.5m (nine months to 31 March 2011: profit of £0.1m)

·; Adjusted loss* per share of 7.4p (nine months to 31 March 2011: 5.9p loss)

·; Net cash as at 31 March 2012 £23.0m (2011: net debt of £29.2m)

·; Orderbook as at 31 March 2012 £153.6m (31 March 2011: £177.6m)

*Before separately disclosed items

Key points:

·; Capital restructuring created a 'New WYG' with a strong balance sheet and significant net cash balances

·; Considerable improvement in the Group's profitability in H2 compared with H1

·; Reduced overhead and legacy costs ahead of market expectations

·; Delivering against strategy to drive high quality revenue growth - secured key international orders in Western Balkans, Eastern Europe and the Middle East/North Africa

·; Seven industry awards won including British Expertise International Awards Winner for Consultancy Project of the Year 2011

·; Strengthened management structure, including a number of key appointments

Current trading & outlook:

·; Trading since the year end has continued in line with expectations

·; Group focus now shifted to delivering quality revenue growth

·; Ongoing delivery of 'self help' measures will continue to drive Group's recovery in the near term

·; UK trading environment is more stable, with improvements in certain UK public and private spending activity

·; Good international prospects as WYG exploits opportunities through globally integrated sector focus and partnerships

Paul Hamer, Chief Executive Officer, said:

"The first year of the 'new WYG' has been a year of tremendous change and I am pleased to report that we have delivered a financial performance consistent with management's expectations at the time of the placing in July 2011. The considerable improvement in the Group's performance in the second half of the financial year compared with the first half reflects the continuing benefits of the Board's strategy and the excellent progress made with implementing the 'self help' measures identified last year.

"Going forward, the Group's focus now shifts from internal improvements to creating quality top line growth through the delivery of our Global Integrated Strategy. Against this backdrop, the Board is confident of returning the Group to an operating profit in the near term."

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

James White

Vicky Watkins

Numis Securities Limited Tel: 020 7260 1000

Stuart Skinner (Nominated Adviser)

David Poutney (Corporate Broker)

CHAIRMAN'S LETTER

The first year of the 'new WYG' has been a year of tremendous change and I am pleased to report that we have delivered a financial performance consistent with the management's expectations at the time of the placing in July 2011. The considerable improvement in the Group's performance in the second half of the financial year compared with the first half reflects the continuing benefits of the Board's strategy and leaves the Group on track to return to operating profit in the near term.

Crucially, we completed a major capital restructuring on 15 July 2011 which included a placing to raise approximately £30.0m net of expenses, the conversion of approximately £51.0m of the Group's net debt (excluding certain restricted cash balances) into convertible shares and the redesignation of the Group's preference shares. This created a 'new WYG' with a strong, debt-free balance sheet and significant net cash balances. This leaves us well positioned to take advantage of the opportunities presented by our clear global strategy and tightly focussed market offering and to continue to realise the benefits of previously identified cost reductions.

Group net revenue for the year was £123.4m (nine months to 31 March 2011: £106.7m) and the operating loss before separately disclosed items was £3.5m (nine months to 31 March 2011: £0.1m profit). However, the full year performance masks the considerable improvement in the Group's profitability as it moved through the year, with an operating loss before separately disclosed items of £1.0m in the second half representing a 65% reduction in losses compared to the £2.5m operating loss in the first half. This improvement reflects the realisation of the benefits of cost saving initiatives on a stabilised revenue base. Overall, international revenue continues to grow, constituting 44% of total revenue (nine months to 31 March 2011: 36%) and cash generation at the operating level is improving.

With a significantly improved balance sheet, a stable business, a strengthened and incentivised management team and a well defined strategy, our aim is now to restore the Group to profit and growth. The Group's recovery thus far has been achieved primarily by delivering on a programme of 'self help' measures. Our rigorous focus on overhead and legacy costs has ensured that they continue to reduce ahead of market expectations.

Strategy

With a robust financial platform in place, we recently revisited the Group strategy that was put in place in 2009. This review resulted in the development of our new Global Integrated Strategy. Briefly, it focuses on:

·; Enhancing our competitive client offering - delivering the best possible service and optimum value to our clients. We are keeping abreast of the latest technologies and techniques and are continually growing our expertise and experience. Over the past two years we have made considerable progress in streamlining our operations so as to maximise our competitive offering to the market. By engaging with clients at an early stage of their projects we are able to deliver added value over the lifetime of the project.

·; Creating growth - directing our resources to attractive market sectors and geographies where we have or can achieve leading positions. We have defined the seven core market sectors we serve. They are: Defence & Justice, Energy & Waste, Environment (including water and waste water), Transport, Mining, Metals & Minerals, Urban & Commercial Development, and Social Development & Infrastructure. We have created sector-focused teams and plans so that we are better placed to export our strong domestic services into niche demand areas overseas.

·; Delivering global projects though greater internal and external collaboration - ensuring we make best use of our Group-wide resources by effectively combining our group-wide sector and technical expertise with local experience to address the growth opportunities across our geographical footprint. This approach is to be complemented by establishing and developing strategic partnerships and collaborations with third parties enabling us to deliver enhanced local services to our global clients.

Dividend

We continue to believe that, for the time being, any cash generated by the Group should be used to take advantage of the opportunities that exist to grow in WYG's chosen markets and to attract and retain talented employees. Although we do intend to resume dividend payments when possible and appropriate, we do not expect to pay a dividend in the foreseeable future.

Accordingly no dividend is proposed (nine months to 31 March 2011: nil).

Board

As we announced on 2 December 2011, Sean Cummins took over as Group Finance Director from David Wilton who resigned from the Board on 17 November 2011.

Sean was Group Finance Director of Scott Wilson plc, the global design and engineering consultancy, from 2007 until its acquisition by URS Corporation in September 2010. He had previously spent seven years as Finance Director of Yule Catto & Co plc, the international chemicals group.

The Board is extremely grateful to David, who joined WYG as Group Finance Director in February 2009, for the central role he played over a very challenging two and a half year period, culminating in July's successful capital restructuring.

Current trading and outlook

The Group's trading performance since the year end continues in line with expectations.

Whilst low levels of confidence in the UK economy mean that trading conditions remain challenging, we are experiencing a more stable environment and are encouraged by signs of improving levels of activity in specific areas of UK public and private spending where WYG has a strong historical position.

Furthermore, we continue to win international orders which fulfil our contract selection criteria and, having worked on phases one and two since 2008, we are delighted to have won a two year extension to the second phase of the EC funded €72m Infrastructure Projects Facility ('IPF'), to restore and upgrade transport, environment and energy infrastructure across the Western Balkans, the full development value of which is in excess of €10bn. With this and other recent project wins in Eastern Europe and the Middle East & North Africa, we continue to believe that WYG's international prospects remain positive.

We have made excellent progress on the 'self help' measures identified last year and we expect this outperformance to continue throughout the current year. This, combined with our refreshed growth strategy, will maintain the momentum observed in our recent financial performance.

Based on this outlook, the Board is confident of returning the Group to positive operating profit in the near term.

BUSINESS REVIEW

The March year-end brought our two year programme of major Group restructuring to a close and our focus now turns towards maximizing 'self help' opportunities and creating a platform from which to restore the business to sustainable growth.

During the past year we have worked hard to deliver on the commitments made to our new shareholders in July 2011 by delivering on an aggressive programme of 'self help' measures whilst maintaining a rigorous focus on legacy costs - those relating to historical issues arising from the poor professional indemnity insurance performance and the sub-optimal property portfolio from which WYG has operated in the UK and Ireland. I am pleased to report that on this first element of our strategy - to enhance our competitive client offering - our progress in reducing these costs is running ahead of expectations. We have also made further progress in reducing our underlying cost base to enhance our future competitiveness.

During the second half of the year we also took significant steps towards the fulfilment of the other two elements of our strategy - creating growth and a more internationally focussed and integrated group - by initiating a programme to form a small number of strategic partnerships and collaborations with key business partners, primarily in our overseas markets. We expect to see tangible results from this initiative over the next 12 months that will underpin the Group's return to growth.

For the third year running, trading conditions in our domestic markets remained challenging. Generally low levels of confidence in the UK economy have had a depressing effect on the construction sector as a whole. For WYG, however, our focus on key sectors where historically we have a strong or market leading position ensured that we have been successful in securing new frameworks and call off contracts. These have featured our front-end offerings of planning, transport and project management services in the Defence & Justice and Urban & Commercial Development sectors where we continue to strengthen our long standing and valued relationships with the MoD, the MoJ, Sainsburys and other key clients. Also, the Government's commitment to additional infrastructure investment set out in its Autumn Statement meant that work on some major projects, including the A453, have already restarted. Across the UK, our Planning & Design teams continue to experience good levels of activity.

The Group's historical over-reliance on the use of bonds in support of certain international markets has, in the past, consumed a disproportionate amount of our debt capacity. Therefore, we have placed much focus during the year on reviewing our approach to these markets, reducing our use of bonds through project selection, consortium partnering and diversification from a narrow focus on EU donor funded work, for which we are the market leader. The measure of our success is that we have increased our international pipeline, whilst issuing a substantially reduced value of bonds. A positive consequence of this new approach is an improvement in our working capital dynamic.

Although we have seen revenues increase in the MENA region, elsewhere in our international operations, revenues have reflected our decisionnot to pursue opportunities with onerous working capital requirements. There has been no noticeable reduction in the availability of funding for strategic infrastructure programmes and we continue to deliver major projects around the world. As our presence in international regions continues to grow, we will seek to leverage our position to extend the delivery of our core services into these new markets providing that any new opportunities meet our project selection criteria.

Operationally, the Group is structured, and reports, on a regional basis with the four regions being:

·; UK & Ireland

·; Eastern Europe (which includes CIS and Western Balkans)

·; MENA (Middle East & North Africa including Turkey)

·; Rest of the World - focussed on the international donor-funded market

UK & Ireland (56% of Group revenue)

The UK & Ireland region generated revenue of £78.9m (nine months to 31 March 2011: £77.9m) with an operating loss before separately disclosed items of £4.7m (nine months to 31 March 2011: £1.5m).

In the UK public sector the Coalition Government's preferred method of procurement is through large, often national, frameworks. In our key sector of Defence & Justice we were successful in being appointed to multi-disciplinary frameworks for a number of government departments and agencies including: the Foreign and Commonwealth Office, the Government Procurement Service and the Ministry of Justice. We have also expanded our services to the Defence Infrastructure Organisation and are now providing professional and technical support to the Operations South area as well as Operations North. Projects includethe Base Optimisation Programme to support the re-basing of Army units and their families from Germany. In addition, we recently started design work on the £100m integrated training and learning college for Police, Fire and Prison Services located in Desertcreat, Cookstown, Northern Ireland.

In the Urban & Commercial Development sector our Planning & Design team has consolidated its position as one of the UK's largest and most successful consultancies with the retail and residential markets performing particularly strongly. Amongst a number of high profile planning applications submitted during the year, our role in supporting Peel Holdings with their Liverpool Waters project stands out. This planning application, at c.£5.5bn, is one of the largest privately funded schemes ever submitted in the UK. The Group provided a range of services including town planning, project management, stakeholder consultation and a full range of environmental disciplines. Further into the project lifecycle, our Buildings & Infrastructure team has been working on a number of high profile projects, notably with Wilson Bowden Developments on the design of the £125m Marketplace Barnsley scheme.

We have seen opportunities emerging from the private sector as both planning and design workloads remained stable and our client base increased in the Transport sector. There has been an immediate impact in terms of opportunities and workload in highways as a direct consequence of the Fiscal Stimulus package announced by the Government in November 2011. Of particular significance is the re-emergence of the £160m A453 widening project in the Midlands. The road is currently regarded as a congestion and accident blackspot. We are providing design services to Laing O'Rourke on this Highways Agency project which has been procured through the Early Contractor Involvement route.

In the Energy & Waste and Environment market sectors we have maintained our long standing relationships with key clients including Sellafield Limited and Northern Ireland Water. One noteworthy success is our appointment to a major framework contract at Sellafield to provide specialist inspections, surveys and associated services.

Eastern Europe (32% of Group revenue)

Our operations in Eastern Europe (which includes CIS and operates from a network of offices in Poland, Romania, Bulgaria and Russia) achieved revenue of £43.8m (nine months to 31 March 2011: £33.2m) with an operating profit before separately disclosed items of £1.5m (nine months to 31 March 2011: £1.4m).

Throughout the year WYG operated in this region through its network of offices in Poland, Romania, Bulgaria and Russia.

WYG in Poland maintained its position as one of the country's leading consultancies and training organisations in the Social Development & Infrastructure sector. During the year we signed more than 250 new contracts, covering projects in such diverse fields as reducing unemployment, improving the competitiveness of enterprises, upgrading the quality of services provided by public sector institutions, caring for the environment, and creating greater territorial cohesiveness throughout the country through quality transport solutions. Thousands of trainees increased their skills by participating in WYG-run and organised programmes, including the "Construction Academy" initiative, a series of regional contracts targeting management and employees in the construction industry. We also provided research data and advice to the Polish government and regional authorities on ways to improve the efficiency and effectiveness of publicly financed development programmes. In the Transport sector, as the national highways development programme went through its peak construction phase, we finalised a number of highway design projects.

In Romania we also continue to provide services in the Transport sector and have won new work in the Waste sector. In Bulgaria we implemented an important sustainable urban transport sector project in Stara Zagora and successfully entered the market for the delivery of research and evaluation services to the national authorities.

Our flagship project in the Western Balkans is the EC funded Infrastructure Projects Facility, restoring and upgrading transport, environment and energy infrastructure across the Western Balkans, the full development value of which is in excess of €10bn. In October 2011, we received a €15m extension to the second phase of the project (IPF2). Among other projects in the region, we have also been working in Serbia on a€1.9m public financial management strengthening programme for the Ministry of Finance.

In the CIS we provide consultancy services in the Mining, Metals & Minerals sector through a collaborative joint venture. We also provide certain engineering services and socio-economic investment appraisal services. The joint venture has performed well in delivering front-end mining consultancy services and there has been a strong demand for its JORC (Joint Ore Reserves Committee) compliance assessments in connection with IFRS compliance and Initial Public Offerings.

MENA (11% of Group revenue)

In the MENA region we generated revenue of £15.3m (nine months to 31 March 2011: £8.7m) with an operating profit before separately disclosed items of £0.1m (nine months to 31 March 2011: £0.1m).

During the year we transferred responsibility for the development of our regional operations in the Middle East and North Africa to the well-established leadership team that has been operating successfully out of Turkey since the 1990s and within the WYG Group since 1997.

Our successful Turkish operations have seen significant growth over the past five years and the MENA region will benefit from the support of the existing office and expertise available in Ankara. Our expansion will build on the current operation in Abu Dhabi, with new offices scheduled to open in Dubai, Doha and Istanbul.

During the year our two main projects outside Turkey were the Wadi Al Asla Project in Saudi Arabia, where we have been working on masterplanning for a new city to be built 25km east of Jeddah with housing and infrastructure (including a hospital, a university, shopping malls, theme parks and stadiums) to support a population of 170,000, and the District Cooling Plant and distribution network for the Abu Dhabi's new Central Business District. This is one of the largest cooling plants in the UAE and it will also supply many of the other future occupants of Al Maryah Island - a 114 hectare mixed-use residential, retail, leisure, hotel and commercial development in the heart of Abu Dhabi.

In our primary sector, Social Development & Infrastructure, we have maintained our market leading position in the delivery of EuropeAid contracts and have won several major new framework contracts, both in Turkey and further afield, for projects ranging from cultural and regional development programmes to large scale education schemes.

In the Environment sector, we have been awarded two major projects to deliver our first waste water treatment plants in Siverek and Ordu and initiated a programme to assist the Turkish authorities to meet the required standards expected under the European wastewater directives whilst improving the living conditions of the local population. We expect to win a lot more work in this rapidly expanding sector.

Rest of the World (1% of Group revenue)

In the Rest of the World - predominantly focused on the donor funded market - we generated revenue of £1.8m (nine months to 31 March 2011: £1.6m) with an operating loss before separately disclosed items of £0.3m (nine months to 31 March 2011: £0.1m profit).

During the past four years, we have significantly increased our portfolio of public financial management (PFM) projects with funding from the Asian Development Bank, the UK's Department for International Development, European Bank for Reconstruction and Development, EU and World Bank. The latest additions to this portfolio include the €3m PFM Strengthening Programme for the World Bank in Laos, which is the second largest PFM project ever won by WYG, and technical assistance to the democratic governance programme in Malawi.

Additionally, in the field of Social Development & Infrastructure, we are working in partnership with IPA Economics (UK) and CID Consulting (Egypt) to transform the Egyptian water sector by making utilities more efficient. We are undertaking similar but smaller projects with Safege in Lesotho.

Our strategic aim to diversify our client base in the international donor market was boosted by our inclusion in two framework contracts under the UK Government's Governance and Security Programme. The programme covers the supply of selected governance and security sector services under bilateral programmes in fragile and conflict-affected states until at least February 2014, with the possibility of an extension for a further two years.

We have also secured a number of major contract extensions, notably a two year extension to our work to strengthen trading relations between the European Union and South Africa. This EU-funded project, which is now set to run until 2015, is improving communication and information exchange between government and non-government organisations, increasing public awareness and building the capacity of stakeholders engaged in international trade.

Financial review

Gross revenue was £139.9m (nine months to 31 March 2011: £121.5m). Net revenue attributable to in-house services, after deducting revenue associated with third parties on which the Group does not make a margin, was £123.4m (nine months to 31 March 2011: £106.7m). Net revenues were stable through the year at £62.1m in the second half compared with £61.3m in the first half.  International revenues now account for 44% of all revenue - on an annualised basis.

The Group made an operating loss before separately disclosed items of £3.5m (nine months to 31 March 2011: profit of £0.1m). More importantly, we have seen a significant improvement in business performance in the second half of the year, with an operating loss before separately disclosed items of £1.0m, which compares to an equivalent £2.5m loss in the first half. Following a period of sustained decline, stable revenue has provided a platform from which we have focused on improving staff utilisation, whilst our success in reducing overhead costs, particularly professional indemnity insurance, property and information technology costs, has exceeded our original expectations. Further benefits are expected to accrue in productivity and overhead savings.

Within interest cost we have nearly four months of cost associated with the loan facility prior to the refinancing in July; thereafter the primary component is the interest charge relating to the ongoing bond facility which will gradually reduce through to the start of 2015.Overall, the Group recorded a loss before tax and separately disclosed items of £3.5m (nine months to 31 March 2011: £0.1m profit). The Group has significant losses brought forward in the UK and is unlikely to pay UK tax for the foreseeable future. However, we do generate profit in many of our overseas activities, upon which we attract local corporation tax.

Loss per share adjusted to exclude separately disclosed items fell to 7.4p (2011: loss of 5.9p).

On a statutory basis, the Group made a profit before tax of £11.9m (nine months to 31 March 2011: loss of £28.6m), reflecting the positive impact of separately disclosed items in the period, details of which are set in note 2. Group EBITDA before separately disclosed items was a loss of £1.5m (2011: profit of £2.2m).

Following the capital restructuring the Group had net cash at 31 March 2012 of £23.0m (31 March 2011: net debt of £29.2m). Within the reported net cash balance, we have an element of restricted cash, primarily associated with the captive insurance company, together with other project specific commitments. At the year end, the restricted balance was £6.7m, leaving an unrestricted balance, our key performance indicator, of £16.4m. (31 March 2011: net debt of £37.7m.) The reduction in the unrestricted cash value since the restructuring is in line with that expected at the time of the capital raising last summer. £9.4m has been applied towards legacy issues including the ongoing commitments on unoccupied offices, settlements on professional indemnity insurance excesses together with redundancy and restructuring payments. The cash cost of such issues should reduce significantly over the next two years. Funding trading losses was the other major cause of the reduction in the cash balance.The Group continues to be acutely focused on cash generation and the effective management of working capital. We have introduced a number of initiatives directed at improving the working capital cycle, whilst reducing our use of advance payment bonds. We are already seeing great success in this area as we modify arrangements with our consortium partners and diversify our international portfolio to be less concentrated on EU donor funded work. Initially, working capital will increase during the course of this year, as 'old regime' contracts work their way through the system, thereafter we should see the benefits of current initiatives showing through. Working capital days, excluding advance payments, will be the measure of success, which at the year end was 110 days.

 As at 31 March 2012, the order book stood at £153.6m (2011: £177.6m) which is made up of UK and Ireland orders of £72.9m (2011: £73.6m) and international orders totalling £80.7m (2011: £104.0m).

CONSOLIDATED INCOME STATEMENT

For the year ended 31 March 2012

The financial year was changed to 31 March in 2011 so the prior period reports nine months' results compared to the current year of twelve months.

Operating profit for the current year includes a gain on debt restructuring of £49.7m and a number of other items (previously described as exceptional) that are separately disclosed in Note 4.

The accompanying notes to the accounts are an integral part of this consolidated income statement.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2012

BALANCE SHEETS

As at 31 March 2012

The accompanying notes to the accounts are an integral part of these Balance Sheets.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

For the year ended 31 March 2012

CASH FLOW STATEMENTS

For the year ended 31 March 2012

The accompanying notes to the accounts are an integral part of this cash flow statement.

NOTES TO THE ACCOUNTS

1. GENERAL INFORMATION

WYG plc is incorporated and domiciled in England. The address of its registered office is Arndale Court, Headingley, Leeds, LS6 2UJ. The company's shares are traded on AIM, a market operated by the London Stock Exchange plc.

The principal activity of the Group during the period ended 31 March 2012 was that of consultant to the built, natural and social environment. The Group's revenue derives from activities in the UK, Ireland and the Group's International division.

The preliminary results for the year ended 31 March 2012 have been extracted from audited accounts which have not yet been delivered to the Registrar of Companies. The Financial Statements set out in this announcement do not constitute statutory accounts for the year ended 31 March 2012 or the period ended 31 March 2011. The financial information for the period ended 31 March 2011 is derived from the statutory accounts for that period. The report of the auditors on the statutory accounts for the year ended 31 March 2012 was unqualified and did not contain a statement under Section 498 of the Companies Act 2006.

2. BASIS OF PREPARATION

Of the new standards, amendments and interpretations that are in issue and mandatory for the financial year end to 31 March 2012, there is no financial impact on this condensed consolidated financial report.

Items that are material and whose significance is sufficient to warrant separate disclosure and identification within the consolidated financial statements are included within separately disclosed items.

A number of the items included within separately disclosed items were previously disclosed as exceptional items in the prior period.

3. CAPITAL RESTRUCTURING

On 15 July 2011, the Company announced the completion of a major financial restructuring. This comprised:

·; the placing ('Placing') of in aggregate 64,000,000 new Ordinary Shares at a price of 50 pence per new Ordinary Share with new institutional investors (equivalent to one pence per Ordinary Share on a pre share consolidation basis), raising gross proceeds of approximately £32 million (approximately £30 million net of expenses);

·; the conversion of approximately £51 million of the Group's net debt (excluding certain restricted cash balances) into 4,540,758 Convertible Shares;

·; the redesignation of all of the Preference Shares held by the Group's Lenders and the Employee Benefit Trust with an aggregate nominal value of £30 million into 'C' Deferred Shares;

·; the provision by the Group's Lenders of revised bonding facilities in relation to those bonds in issue at completion of the Placing which are required as part of the Group's ongoing operations;

·; a share reorganisation such that each existing Ordinary Share of 10 pence each in the capital of the Company was sub-divided into one ordinary share of 0.002 pence each and one 'B' Deferred Share of 9.998 pence each in the capital of the Company; and

·; a share consolidation undertaken on the basis of one post-consolidation Ordinary Share for every 50 existing Ordinary Shares.

As a consequence of the capital restructuring above, the Directors' latest financial projections demonstrate that the Company has sufficient cash resources for at least twelve months from the date of approval of these financial statements. On this basis, the Directors confirm their belief that it is appropriate to use the going concern basis of preparation for the Group financial statements.

4. DETAILED CONSOLIDATED INCOME STATEMENT

Details of separately disclosed items

The Group has incurred a number of material items in the year, whose significance is sufficient to warrant separate disclosure. The key elements included within separately disclosed items are:

·; Employee termination, office closure costs and other restructuring costs incurred as a result of the ongoing restructure of the Group

·; Impairment of goodwill; the Group has reviewed the value of goodwill arising on past acquisitions. Following this review the group has impaired the value of goodwill carried on its balance sheet

·; Gain arising on the debt restructuring

·; Transaction costs in relation to the debt restructuring

·; Annual charge in relation to share option costs

·; Annual charge for the amortisation of acquired intangibles

5. SEGMENTAL INFORMATION

Business segments

IFRS 8 requires segment reporting to be based on the internal financial information reported to the chief operating decision maker. The Group's chief operating decision maker is deemed to be the senior management team comprising Paul Hamer (Chief Executive Officer), Sean Cummins (Group Finance Director) and Graham Olver (Chief Operating Officer). Its primary responsibility is to manage the Group's day to day operations and analyse trading performance. The Group's segments are detailed below and are those segments reported in the Group's management accounts used by the senior management team as the primary means for analysing trading performance and allocating resources. The Executive Committee assesses profit performance using operating profit measured on a basis consistent with the disclosure in the Group accounts.

The Group's operations are managed and reported by key market segments. These have changed from the prior period and are now reported as follows:

UK and Ireland

MENA

EE

ROW

The results for the period ended March 2011 have been restated to reflect this market segment analysis.

The segment results for the year ended 31 March 2012 are as follows:

Unallocated corporate assets represent cash and cash equivalents, tax recoverable and deferred tax assets. Unallocated corporate liabilities represent bank overdrafts and loans, retirement benefit obligations, corporation tax, derivative financial instruments and deferred tax liabilities.

The segment results for the 9 months ended 31 March 2011 are as follows:

Unallocated corporate assets represent cash and cash equivalents, tax recoverable and deferred tax assets. Unallocated corporate liabilities represent bank overdrafts and loans, retirement benefit obligations, corporation tax, derivative financial instruments and deferred tax liabilities.

6. EARNINGS PER SHARE

The calculation of basic and diluted earnings per share is based on the following data:

Following the share reorganisation the number of ordinary shares in issue for EPS purposes was 64,533,158. This number of shares if applied to the results for the twelve months ended 31 March 2012 would give an EPS of 17.6p and an adjusted loss per share of 9.8p.

7. DIVIDENDS

There were no dividends paid or proposed in the prior period or in the year ended 31 March 2012.

8. GOODWILL

Goodwill is tested for impairment annually and whenever there are indications that it may have suffered an impairment. Goodwill is considered impaired to the extent that its carrying amount exceeds its recoverable amount, which is the higher of the value in use and the fair value less costs to sell of the cash generating unit (CGU) to which it is allocated. In the impairment tests of goodwill performed, the recoverable amount was determined based on the value in use calculations.

The value in use calculations are based on cash flow forecasts derived from the most recent two year financial plans approved by the Board.

Cash flows for the periods beyond the two year financial plans for the CGUs to which significant amounts of goodwill were allocated were calculated as follows: cash flows from years three and thereafter were projected to remain constant per annum so prudently not exceeding the long term growth rates in the principal end markets in the UK, Republic of Ireland and Europe.

Discount rates were applied to the resulting cash flow projections that reflect current market assessments of the time. Pre tax discount rates used in the annual impairment were 14%

During the financial period, impairments totalling £14.8m were recognised in relation to the goodwill allocated to the UK following continued restructuring in those business segments.

Management has assessed the sensitivity of the recoverable amounts to key assumptions to be as follows: a one percentage point increase in the pre-tax discount rate of 14% would reduce the recoverable amount by £1,008,000; a one percentage point fall in operating margin across the CGUs would reduce the recoverable amount by £5,000,000; and a one percentage point fall in the assumed long term growth rate of 0% would reduce the recoverable amount by £1,325,000.

The remaining carrying values of goodwill relate to UK & Ireland.

9. PROVISIONS, LIABILITIES AND OTHER CHARGES

Claims

Provisions are made for current and estimated obligations in respect of claims made by contractors and the general public relating to accident and other insurable risks arising as a result of the business activities of the Group. These include claims payable by the Group's captive insurance company, Oakdale Insurance Company Limited.

Redundancy

Provision is made for current estimated future costs of redundancy and ex gratia payments to be made where this has been communicated to those employees concerned.

Vacant leasehold properties

The Group has a number of vacant leasehold properties, the majority of which are held under head leases expiring within the next five years. Provision has been made for the residual lease commitments together with other outgoings, after taking into account assumptions relating to later periods of vacancy.

10. SHARE CAPITAL

Ordinary shares

Preference shares

Share capital restructuring

Debt for equity swap

On 15 July 2011, the Group completed a restructuring of its existing borrowing facilities of £58.2m with its lenders. The transaction resulted in total drawn borrowings of £52.8m (net £50.9m) being cancelled and converted into 4,540,758 convertible shares at 0.01 pence each.

The convertible shares are subject to certain conditions, and have rights of conversion into ordinary shares. The convertible shares have no voting, economic or other rights save certain circumstances, and are not be entitled to participate in a return of capital or assets. The convertible shares are not listed on AIM or any other investment exchange and the holder is entitled to convert the convertible shares into ordinary shares at any time provided that:

·; The Group's volume weighted average ordinary share price rises above three times the placing price for a period of at least 25 consecutive trading days between the second and tenth anniversary following admission; or

·; An offer is made to acquire the entire issued share capital of the Company which becomes unconditional in all respects (or, if conducted by way of a scheme of arrangement, such scheme of arrangement becomes effective); or

·; The ordinary shares cease to be listed either on AIM or the main market of the London Stock Exchange.

The Group has recognised a gain of £49.7m during the year, representing the difference between the carrying value of £50.9m of the borrowings converted and the fair value of the convertible shares of £1.2m issued to the lenders at the date of the debt for equity swap.

The profit and loss reserve has been reduced by £49.7m and the share premium account increased by a similar amount to reflect the legal measurement of share capital and share premium on the issue of the convertible shares as required by the Companies Act 2006.

The convertible shares have been recorded as equity as the holders do not have an unconditional right to require their redemption

Share reorganisation

Ordinary shares

The Group undertook a share reorganisation such that each existing ordinary share of 10 pence each was sub-divided into one existing ordinary share of 0.002 pence each and one 'B' deferred share of 9.998 pence each.

The 'B' deferred shares had no voting rights or dividend rights and on a return of capital, had the right to receive an amount equal to the sum of the nominal value of such shares. The 'B' deferred shares were repurchased and subsequently cancelled on 23 September 2011.

The existing ordinary shares following the reorganisation but before the placing referred to below were consolidated into ordinary shares of 0.1 pence each. The share consolidation was on the basis of one post-consolidation ordinary share for every 50 existing ordinary shares giving 705,797 ordinary shares of 0.1 pence each.

Preference shares

The preference shares were re-designated as a new class of 'C' deferred shares with the same rights and restrictions as the deferred shares, and therefore, no economic value was attached to the 'C' deferred shares. The 'C' deferred shares carried no entitlement to dividends, no redemption premium on a sale or winding up and no voting rights. The 'C' deferred shares were repurchased and subsequently cancelled on 23 September 2011.

Placing

£30.6m (net of expenses) was raised by the issue of 64,000,000 new ordinary shares with new institutional investors at an issue price of 50 pence per new ordinary share. The new ordinary shares are identical to, and rank in full with, the post-consolidation ordinary shares for all dividends or other distributions declared, made or paid.

Share repurchase

The Group repurchased and subsequently cancelled all of the deferred, 'B' deferred and 'C' deferred shares in issue on 23 September 2011 for a total consideration of 1p. The nominal value of the amounts repurchased and cancelled was transferred to the Capital Redemption Reserve. The Capital Redemption Reserve was subsequently cancelled (see below).

Capital reduction

On 19 October 2011, the cancellation of the Company's share premium account and its capital redemption reserve, approved by shareholders at the AGM, was confirmed by an order of the High Court. This is reflected in the transfer from the share premium account and the capital redemption reserve to retained earnings.

11. CASH GENERATED FROM OPERATIONS

12. ANALYSIS OF CHANGES IN NET DEBT/CASH

Restricted cash relates to balances in the Group's captive insurance company, restricted access accounts in WYG International Limited, and at 31 March 2011 the sales proceeds from the disposal of AKT.

Other non-cash movements represent currency exchange differences, the accrual of Payment in Kind (PIK) interest and the impact of the debt for equity swap.

ENDS