WYG Regulatory News (WYG)

3 December 2015

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

Half Year Report

Strong order book momentum underpins recently revised expectations

WYG, the global project management and technical consultancy, announces its half year results for the six months ended 30 September 2015.

Financial highlights:

Significant profit growth despite delayed approval of the EU budget holding back international revenues as anticipated

· Revenue* of £62.6m (H1 2014: £63.2m)

· Adjusted profit before tax** up 13% to £2.2m (H1 2014: £1.9m)

· Profit before tax of £2.1m (H1 2014: loss of £0.4m)

· Adjusted** earnings per share of 3.3p (H1 2014: 2.9p)

· Interim dividend up 67% at 0.5p per Ordinary Share (2014: 0.3p)

· Unrestricted cash as at 30 September 2015 of £2.6m (H1 2014: £6.6m) after £2.5m of acquisition related costs

· New £25m five year committed facility with HSBC

· Order book increased by 18% to £123.4m at 30 September 2015 (31 March 2015: £105.0m) of which:

· UK - up 15% to £60.9m (31 March 2015: £53.0m)

· International - up 20% to £62.5m (31 March 2015: £52.0m)

· New management incentives approved at the AGM - 12.2m options awarded under the TIP have been surrendered, equivalent to 17.9% of the current issued share capital

*Including share of Joint Venture revenues

**Before separately disclosed items

Operational highlights:

Strong UK performance and progress in converting international pipeline

UK:

· 15% increase in revenue and 67% increase in underlying operating profit driven by buoyant infrastructure and planning markets

· Consolidated our position as a top three planning consultant in the UK

· Alliance Planning business performing well since acquisition in September 2014

· Acquired FMW Consultancy Limited in June 2015

· Significant expansion of new asset management discipline with wins including Co-op and the MoD for the surveying of overseas service families' accommodation

· More than 100 new projects won under UK framework agreements including development of the MoD's new base in Bahrain

International:

· Whilst EU Budget delays held back first half revenues, some significant new multi-year EU projects were won during the period including a €8.8m two year social inclusion contract with a Turkish Ministry on behalf of EuropeAid and a €2.9m extension of the Western Balkans IPF4 programme

· Strong progress in wider international market with £29.6m of new projects won in the first half

· We are currently delivering 19 projects in 12 countries in Africa alone

Post period end and Outlook:

· Trading since the half year end is in line with management's expectations

· Order book further increased to £130.0m as at 30 November 2015 following further contract wins

· New Board appointments: Jeremy Beeton and Neil Masom

· Acquisition of North Associates (Cumbria) Limited further bolsters WYG's leading position in UK property asset management and planning

· Further major opportunities arising from the UK government's spending reviews and Autumn Statement

Paul Hamer, Chief Executive Officer of WYG, said:

"Building on the strong first half performance in the UK, we are seeing an increasing flow of work from major public and private sector clients, underpinned by continuing economic growth and infrastructure spending which are the main drivers of our core front-end planning and consultancy business.

"Internationally, we continue to make very good progress with our activities in fragile and developing states where we are starting to see good levels of growth, particularly in Africa. Whilst the delay in the ramp up in the EU funding cycle held revenues back during the first half, since this issue was resolved we have started to win some significant new multi-year EU related projects. We expect performance to build during the second half of the year and for several years beyond.

"With an exceptionally high proportion of our current year revenue expectations already in our order book together with the strong momentum in our international business and the steps taken over recent years to increase Group profitability, we are well placed to deliver on market expectations for the full year.

"In addition, having recently secured a more flexible £25m bank facility, we are actively reviewing a number of acquisition opportunities and investing in growth in support of our aspiration of building towards a profit before tax of £15m by 2018."

For further information, please contact:

WYG plc Tel: +44 (0) 113 278 7111

Paul Hamer, Chief Executive Officer

Sean Cummins, Group Finance Director

MHP Communications Tel: +44 (0) 203 128 8100

John Olsen / Katie Hunt / Ollie Hoare

N+1 Singer Tel: +44 (0) 207 496 3000

Sandy Fraser / Nick Owen

WH Ireland Limited Tel: +44 (0) 207 220 1666

Adrian Hadden / Liam Gribben

CHAIRMAN'S STATEMENT

Introduction

I am pleased to report that the Group has delivered a 13% increase in adjusted profit before taxation against the comparative period despite broadly flat revenues which were held back by the delayed ramp-up of the EU funding cycle, as stated in our announcement of 24 September 2015.

We have also made considerable progress towards delivering our strategy of accelerating future growth with a focus on driving quality revenues from our core areas of strength; front end planning consultancy and international development. We intend to deliver this growth both organically and through selective acquisitions which provide access to a wider range of skills and resources, framework agreements or geographical coverage. Since the announcement of the conclusion of our strategic review on 9 June, we have secured appropriate funding, broadened the skills and experience on our Board and put in place performance based management incentives which will enhance our ability to deliver our strategy. In addition, we acquired North Associates in October 2015, which further consolidates our leading position in UK planning consultancy and we have continued to invest in our team.

Recent UK government announcements including the Chancellor's Autumn Statement validate our current growth strategy and confirm that we are well positioned to take advantage of opportunities arising from the latest Comprehensive Spending Review and the Strategic Defence and Security Review (SDSR). In particular, our position on key frameworks with FCO, World Bank and DfID means that we should benefit from the Chancellor's confirmation that 50% of DfID's budget will be allocated to fragile states in each of the next five years, the Conflict Stability and Security Fund will increase from £1.0bn to £1.3bn by 2019/20, the Good Governance Fund for Eastern Europe and the Balkans will be doubled to £40m a year, the creation of a new £500m crisis reserve and the finance for climate change resilience in developing countries will be increased by 50% to at least £5.8bn. Likewise, under the SDSR, confirmation that £178bn is to be spent by the MoD on new assets over the next 10 years and that the MoD estate is to be reduced by 30% to build 55,000 new homes means that our positioning on the ASP Supply Chain framework and our involvement with the Army Basing Programme, together with our experience of over 25 years on projects for the MoD such as masterplanning for Salisbury Plain, ensure that we are ideally placed to win many major new opportunities for which there is a firmly stated political will and a clearly identified budget.

Bank Facility

In July 2015 we secured a new £25m five-year committed multicurrency revolving credit facility from HSBC offering broad flexibility between debt and bonding requirements. This facility, which gives the Group access to debt for the first time since 2010, ensures that we have the resources with which to fund our accelerated growth ambitions through the remainder of the current financial year and beyond.

Board changes

As part of our strategic review, we said that we would take the opportunity to challenge and test the suitability of our Board structure to empower the business to make it more agile and responsive to help deliver the Board's growth ambitions for the next phase of the Group's development. As a result of that review, Graham Olver, the Group's Chief Operating Officer, decided to step down from the Board in August. In September, Robert Barr the Group's senior independent non-executive director retired from the Board having completed the maximum nine years' service on the board during which he could be deemed to be independent under the Code.

On 1 October 2015, we announced the appointment of two new non-executive directors. Jeremy Beeton joined us as senior independent non-executive director with more than 40 years' experience in international business, government, construction and civil engineering. Neil Masom joined us to chair WYG's Remuneration Committee with more than 30 years' experience of working in complex, politically sensitive activities in international, commercial and public sector organisations.

We also announce today that after four very challenging yet successful years, Sean Cummins has decided, for personal reasons, to step down as Group Finance Director. The Company has started an external search for a successor and will make an announcement in due course. Sean will continue in his role as Group Finance Director until his successor is appointed in order to facilitate a smooth and effective transition. During his time with the Group, Sean has played a key role in WYG's transition to a well funded, independent group and will leave the Group in a strong position to execute the growth strategy which is at the heart of the next phase of its development. The Board thanks Sean for his contribution and wishes him well in his future career.

New Management Incentives and Share Capital

At the Annual General Meeting on 24 September 2015 shareholders approved new incentive arrangements which comprised three key elements: (1) a revised annual bonus arrangement which included a significant element of bonus deferral in the form of cash and share-based payments which are subject to the achievement of demanding PBT and cash conversion targets; (2) a new Performance Share Plan (PSP) covering the senior executive and leadership teams which will vest only if absolute EPS growth targets and TSR targets measured against a peer group are achieved; and (3) a Restricted Share Plan (RSP) covering other key senior employees. It was a precondition to entry into the new plans that individual participants were required to surrender the overwhelming majority of unvested awards under the Transformation Incentive Plan (TIP) which the new scheme supersedes. We are pleased to confirm that 12.2m options previously awarded under the TIP have been surrendered, equivalent to 17.9% of the current issued share capital; thus substantially removing the potentially dilutive effect of the TIP scheme which had become an impediment to optimising shareholder value. Following the surrender of awards under the TIP there are 4.2m vested and unvested options over ordinary shares.

The Company has granted options over 1.4m ordinary shares under the PSP and 1.2m ordinary shares under the RSP. There are no other options over the Company's ordinary shares.

Acquisitions

Following the acquisition of Alliance Planning in September 2014, we made two more acquisitions during and after the half year period which further bolster the Group's strength in front end planning consultancy and support its focus on high quality revenues.

We acquired FMW Consultancy Limited on 8 June 2015, a specialist transport and infrastructure consultancy, in a transaction with an enterprise value of £1.4m, further cementing our status as one of the largest transport and infrastructure planning consultancies in the UK. The acquisition was immediately earnings enhancing and is performing well as part of the Group.

After the period end, on 30 October 2015, we announced the acquisition of North Associates (Cumbria) Limited together with its subsidiary Taylor & Hardy Limited for a maximum total consideration of £5.0m. This acquisition not only bolsters the Group's status as one of the largest property asset management and planning consultancy businesses in the UK, it also positions WYG to benefit from some of the anticipated £90 billion of investment planned as part of the development of Britain's Energy Coast in West Cumbria.

We continue to review a pipeline of acquisition opportunities and, having secured a new, flexible £25m bank facility, we are well positioned to convert this pipeline over time.

People

We have continued to invest in our team, increasing the number of technical staff in the UK during the first half of the financial year by more than 5%, in anticipation of the expected significant increase in demand for our services. We have also strengthened our recruitment capability. However, the temporary reduction in international work has necessitated some reorganisation of certain parts of the business with the result that total headcount as at 30 September 2015 was only marginally ahead at 1,483 (31 March 2015: 1,481).

We have upgraded employee benefits and continued to improve employee engagement, career development and internal communications to ensure that retention levels remain as high as possible and that we invest in the development of the high quality of leadership enabling us to continue to expand our business.

Results

The UK business has delivered an excellent performance as the Group has taken advantage of its strong market position in a trading environment underpinned by continuing economic growth and infrastructure spending. With the UK order book up 15% since 31 March 2015, this performance looks set to continue. We are achieving an improving bid to win ratio on long-term frameworks and an increasing flow of work from major public and private sector clients. The relatively short-term nature of a large proportion of our UK order book means that orders translate into revenue more quickly than in other regions giving us good near-term visibility.

Whilst the delay in the ramp-up of the EU funding cycle held back revenues in the first half as expected, we are now converting a large proportion of our EU related pipeline into firm project wins such that, at the half year end, our International businesses have delivered an even greater increase in order book than in the UK, up more than 20% on the figure reported as at 31 March 2015. New contracts were secured to the value of £29.6m (£15.6m in EAA and £14.0m in MENA). These offer longer term revenue visibility, with a meaningful proportion of these wins being multi-year projects that will drive performance as we go into the second half of the year and for several years beyond.

We are also working closely with the UK's Ministry of Defence, Foreign & Commonwealth Office, the Department for International Development (DfID) and EuropeAid to grow our portfolio of work in Fragile and Conflict Affected States (FCAS). We are currently delivering 19 projects in 12 countries in Africa where we have a strong order book and pipeline.

We have made a number of investments in new programmes to enhance our IT hardware and software, and the ongoing rollout of our project management and other essential programmes.

As we announced in September, gross revenue (including our share of Joint Venture revenues) was, as expected, broadly unchanged at £62.6m (H1 2014: £63.2m). A £6.1m increase in UK revenue was offset by the decrease in our international revenue caused by the slow commencement of projects under the new EU funding cycle.

Underlying profit performance continues to improve with the Group increasing adjusted profit before tax (before separately disclosed items) to £2.2m (H1 2014: £1.9m). On a statutory basis, the Group made a profit before tax of £2.1m (H1 2014: loss of £0.4m) on pre-joint-venture revenues of £62.3m (H1 2014: £62.3m).

Earnings per share adjusted to exclude separately disclosed items was 3.3p (H1 2014: 2.9p).

The Group closed the period with unrestricted cash of £2.6m (H1 2014: £6.6m) reflecting normal seasonal trends in working capital utilisation, the planned application of money towards legacy issues, cash consideration spent on acquisitions totalling £2.5m. Cash spending on legacy issues continues to reduce ahead of target and, by focusing on cash generation and the effective management of working capital, we expect cash balances (before any further spending on acquisitions) to show their normal increase in the second half. 

Dividend

For the current period, in line with the Board's confidence in the Group's improving results and outlook, the Board has decided to approve an interim dividend of 0.5p per ordinary share (30 September 2014: 0.3p). The interim dividend will be paid on 16 March 2016 to shareholders on the register on 26 February 2016 and WYG shares will trade ex-dividend on 25 February 2016.

Outlook

Building upon a strong UK performance in the first half, we are seeing an increasing flow of work from major public and private sector clients underpinned by continuing economic growth and infrastructure spending which are the main drivers of our core front-end planning and consultancy business. Our two recent acquisitions have helped to secure the Group's position as a leading UK planning and transport consultant and will help to augment the growth of our UK activities.

Internationally, we continue to make very good progress diversifying into fragile and developing states and we are starting to see good levels of growth, particularly in central Africa. Whilst the delay in the ramp up in the EU funding cycle held revenues back in the first half as anticipated, we have started to win some significant new multi-year EU related projects since the start of the financial year, which we expect to drive performance during the second half of the year and for several years beyond.

This, combined with our increasing profitability and an exceptionally high proportion of the current year revenue expectations already in our order book, leaves us well placed to deliver on market expectations for the full year.

In addition, having secured a £25m bank facility, we are actively reviewing a number of acquisition opportunities and investing in other growth initiatives to support our aspiration of building towards a profit before tax of approximately £15m by 2018.

Mike McTighe

Chairman

3 December 2015

BUSINESS REVIEW

Operationally, the Group is structured, and reports, on a regional basis as described below.

UK (74% of Group Revenue)

The UK region generated revenue of £46.2m (H1 2014: £40.0m) with an operating profit before separately disclosed items and central overheads of £4.5m (H1 2014: £2.7m).

The UK region continued to deliver a strong performance in the first half of the year: revenues grew by 15% and operating profit increased by 67%. Steady growth has been evident in most core sectors, with transport performing particularly well. The acquisition of FMW Consultancy has strengthened our business in this sector, particularly in the South West and South Wales.

In a rapidly evolving residential sector, we have increased our numbers of planners, project managers, engineers, transport planners, environmentalists and urban & landscape designers. We continue to work with most of the largest national house-builders as well as the social housing sector.

At the start of this year we established a separate Asset Management discipline and this has already expanded significantly. Key wins have included our appointment as Technical Assessor to the Co-op Group and selection by the Defence Infrastructure Organisation to undertake surveys on accommodation standards for service families on all of its international estate which involved deploying surveyors to 14 countries.

Our Management Services and Engineering disciplines have also been successful in winning a number of significant projects. These include a commission to oversee the refurbishment of the Headquarters of the City of London Police and provision of Technical Advisory support to the Ministry of Justice. Our Belfast office has been appointed by Southern Regional College to design and manage the replacement of further education colleges in Craigavon, Banbridge and Armagh with three new, state of the art college campuses with a combined construction value of £55m and, shortly after the period end, was also appointed to design and manage the delivery of another major education project with a construction value of circa £114 million.

Other significant wins in the period include 16 new projects under the Defence Infrastructure Organisation's Principal Support Provider framework, a £1.0m, two year programme of work to support the MoD's development of a new naval base in Bahrain, a £2.1m civil & structural laboratory project, a four year framework to provide mechanical & electrical engineering services to the Belfast Harbour Commissioners, and a framework to provide health & safety and environmental services to Transport for London.

The University of Surrey, School of Veterinary Medicine received a royal seal of approval when it was officially opened by Her Majesty the Queen and HRH the Duke of Edinburgh on 15 October 2015. Our engineers were actively involved in the design process at every stage, from inception through to completion. One of our major schemes for the Defence Infrastructure Organisation has also recently been successfully handed over, with the new £150m barracks at MoD Stafford completed and opened by The Princess Royal.

Our order book in the first half of the year has also continued to grow, closing at £60.9m: up £7.9m (15%) from 31 March 2015.

Europe, Africa and Asia (EAA) (17% of Group Revenue)

In this region WYG operates through four sub-regional business units - Central and Eastern Europe (CEE), South East Europe (SEE), Africa and Asia. In the period, the EAA region generated revenue (including our share of Joint Venture revenues) of £10.9m (H1 2014: £15.6m), which generated a breakeven operating position before separately disclosed items and central overheads (H1 2014: profit of £0.7m).

The period was characterised by strong order book development in the international donor market where we have won a number of projects with DfID, EuropeAid and the World Bank including a €1.9m programme for strengthening democratisation and Good Governance in Zanzibar and a €4.6 million extension to the Western Balkans Infrastructure Project Facility Phase 3. This significant upturn involved securing new contracts with an aggregate value of more than €20.0m.

Our operations throughout CEE remained at depressed levels while the markets continued to await the commencement of the new financing arrangements. Once the European Structural Funds facility became operational, the numbers and value of opportunities in our core socio-economic services market in CEE started to accelerate and is now growing significantly, increasing our expectation for strong order book growth in the coming periods. In the technical services area, our Polish business was highly successful in securing and delivering a number of national railway commissions.

In SEE we benefited from our leading position in Croatia and long-standing involvement in the Western Balkans Infrastructure Project Facility programme, thereby successfully running a business operation with access to a diversified mix of local, EU Structural Funds and EuropeAid markets. This allows us to target a strong overall performance in SEE for the current year. In the period WYG's Russian business, a collaborative joint venture delivering engineering and consultancy services to the mining sector, operated under difficult market conditions and we expect this to continue into the medium term.

In summary, current operations in the region overall have been affected by continued lower spending on our EU market and our investment into new clients and regions (mainly Africa). Both EuropeAid and Structural Funds opportunities are now re-emerging, and the investment into Africa has already brought record levels of new wins. The Region, with some restructuring and reorganization now taking place, is confidently looking towards a period of opportunity and growth.

Middle East and North Africa (MENA) (9% of Group Revenue)

The MENA region (which includes Turkey) contributed revenue of £5.5m (H1 2014: £7.5m) with an operating loss before separately disclosed items and central overheads of £0.2m (H1 2014: profit of £0.6m). The period has been dominated by a huge ramp up in tendering activities as the release of EU funds finally translated into a programme of new, large opportunities; we expect this high level of tendering activity to continue. As market-leader in our chosen fields, we anticipate securing significant success from these opportunities and, since 1 April 2015, the team has won new contracts with an aggregate value of €19.6m. At 30 September 2015, the Region's order book stood at €27.0m, nearly three times what it was at the same time last year.

While we continue our efforts to diversify our technical and engineering services in Turkey, the mainstay of our work, the water and wastewater projects in Ordu, Siverek and Bulancak assisting the Turkish Ministry of Environment in the supervision and design of water and wastewater infrastructure to meet EU environmental standards, are progressing well. The first two projects are nearing completion but we are already preparing for significant extensions securing another two to three years' additional work. In addition, we have won and started work on the Kahramanmaraş water and wastewater project which will be our largest so far. With its €4.0m contracted budget, it is further evidence of our leading position in the Turkish Environmental Operational Programme financed by the EU.

In addition to the water and wastewater projects, we are a leading member of a consortium that has been awarded the "Turkey National Transport Master Plan" project. This represents our first project from the EU financed Transport Operational Programme.

Examples of our recent EuropeAid successes include an €8.8m two year social inclusion project for the Turkish Ministry of Family and Social Policies, the ongoing BENEF 2013 programme, which will run until December 2017 and on which we are working on five separate lots, and three new framework contracts in the field of Economic and Urban Development for delivery in Kenya, Cambodia, and Turkey.

Unaudited consolidated income statement

For the six months ended 30 September 2015

* Operating loss includes a number of items that are separately disclosed in note 4.

The accompanying notes to the Half Year Report are an integral part of this consolidated income statement.

Unaudited consolidated statement of comprehensive income

For the six months ended 30 September 2015

\* These items will not be reclassified subsequently to profit or loss.

Unaudited consolidated balance sheet

As at 30 September 2015

Unaudited consolidated statement of changes in shareholders' equity

For the six months ended 30 September 2014

For the six months ended 31 March 2015

Unaudited consolidated statement of changes in shareholders' equity (continued)

For the six months ended 30 September 2015

Unaudited consolidated cash flow statement

For the six months ended 30 September 2015

1. Company details

WYG plc is incorporated in the United Kingdom under the Companies Act and is registered in England & Wales with registered number 1869543. The address of its registered office is Arndale Court, Otley Road, Headingley, Leeds LS6 2UJ. The Company's ordinary shares are traded on AIM, a market operated by the London Stock Exchange plc.

The principal activity of the Group in the period under review was that of international multi-skilled consultant. The Group's revenue derives mainly from activities in the UK, Eastern Europe and Middle East & North Africa.

2. Basis of preparation

This condensed consolidated interim financial information for the six months ended 30 September 2015 should be read in conjunction with the financial statements for the period ended 31 March 2015, which are available on the Company's website at www.wyg.com, and have been prepared in accordance with IFRSs as adopted by the European Union. While the financial figures included in this half-yearly report have been computed in accordance with IFRSs are applicable to interim periods, this half-yearly report does not contain sufficient information to constitute an interim financial report as that term is defined in IAS 34.

This condensed consolidated interim financial information was approved for issue on 2 December 2015.

This condensed consolidated interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2015 were approved by the Board of Directors on 9 June 2015 and delivered to the Registrar of Companies. The report of the auditor on those accounts was unqualified and did not contain any statement under Section 498 of the Companies Act 2006.

The condensed consolidated interim financial information has neither been reviewed nor audited.

3. Accounting policies

The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 March 2015, as described in those annual financial statements.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected annual earnings.

4. Detailed consolidated income statement

Details of separately disclosed items

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

· Period charge in relation to share option costs

· Period charge for the amortisation of acquired intangibles

· Items included in other credits/(costs) are a credit relating to the legal settlement of the 1986 pension scheme, the release of surplus vacant leasehold provisions net of costs in relation to the bank refinancing, restructuring and acquisition related costs.

5. Segmental information

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 the Chief Executive Officer the Group Finance Director and the Group Commercial Director. 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. 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 as follows:

· UK

· EAA (Europe, Africa and Asia)

· MENA (Middle East & North Africa including Turkey)

The segmental results for the six months ended 30 September 2015 are as follows:

5. Segmental information (continued)

The segmental results for the six months ended 30 September 2014 are as follows:

6. Finance costs

7. Tax

The tax charge for the period has been calculated by applying the Directors' best estimate of the effective tax rate for the year with consideration to the geographic location of the profits, to the profit before tax for the period.

8. Earnings/(loss) per share

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

The adjusted earnings per share is calculated after excluding separately disclosed items. This more accurately reflects the underlying performance of the Group.

In the six months to 30 September 2014 the number of shares used for the calculation of diluted adjusted earnings per share has been increased by 6,105,991. For periods where the Group was loss making, dilution has no effect on loss per share.

9. Dividends

The interim dividend of 0.5p per share (2014: 0.3p per share) was approved on 3 December 2015 and as such has not been included as a liability in these financial statements.

The final dividend of 0.7p per share for the year ended 31 March 2015 was approved by the shareholders at the Annual General Meeting on 24 September 2015 and was paid on 6 November 2015. This has been included as a liability in these financial statements but was not recognised in the financial statements for the year ended 31 March 2015.

10. Business Combinations

In June 2015, WYG Environment Planning and Transport Limited, a wholly owned subsidiary of the Group, acquired 100% of the share capital of FMW Consultancy Limited, a specialist transport and infrastructure consultancy with offices in Bristol, Cardiff and Manchester.

The following table sets out the provisional fair value of the net assets acquired and the resulting goodwill:

On 30 October 2015, North Associates (Cumbria) Limited together with its subsidiary Taylor & Hardy Limited was acquired for a maximum total consideration of £5.0m.

11. Goodwill

Goodwill is tested for impairment at the interim and financial year end reporting dates 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 to which it is allocated. In the impairment tests of goodwill performed, the recoverable amount was determined based on the value in use calculations.

Management based the value in use calculations on cash flow forecasts derived from the most recent financial forecasts approved by the Board including certain sensitivities, in which the principal assumptions were those regarding sales growth and changes in direct costs.

Following the review at 30 September 2015, management decided that no further impairment was necessary.

12. Property, plant and equipment and intangible assets

13. Financial liabilities

The redemption liability relates to the discounted fair value of an option to purchase the remaining 25% of Arndale 22 Limited.

14. Cash (used in)/generated from operations

15. Analysis of net cash/(debt)

Cash and cash equivalents include £7,947,000 cash (2014: £8,507,000) and £nil overdrafts (2014: £138,000).

Restricted cash relates to restricted access accounts in WYG International Limited and cash held in joint operations.

Other non-cash movements represent currency exchange differences.

16. Retirement benefit obligation

The pension obligation at 30 September 2015 comprises the remaining liability in relation to the 1986 pension scheme of £2,567,000 (2014: £2,729,000) and the net liability of the WYD pension scheme (a final salary scheme) of £nil (2014: £119,000).

For the purposes of IAS 19 disclosures, the WYD scheme is disclosed based upon the most recent actuarial valuation at 1 July 2014, updated to take account of the requirements of IAS 19 in order to assess the assets and liabilities of the scheme at 30 September 2015. At this time the scheme had a calculated surplus of £2,485,000, this has then been adjusted to reflect guidance provided by IFRIC14. As the company is unable to recover this surplus, the net liability recognised in the balance sheet for the period ended 30 September 2015 reflects the present value of the contributions due after the 30 September 2015. This is consistent with the approach adopted for the disclosures in respect of the year ended 31 March 2015. The impact of the IFRIC14 adjustment is £2,485,000 (31 March 2015: £1,995,000).

17. Related party transactions

There have been no changes in the nature of related party transactions as described in the 2015 Annual Report and Accounts and there have been no new related party transactions which have had a material effect on the financial position or performance of the Group in the period ended 30 September 2015.

18. Availability of the Half Year Report

Copies of the Half Year Report can be obtained from the Company's registered office at Arndale Court, Otley Road, Headingley, Leeds LS6 2UJ, and on the Company's website: www.wyg.com.