WYG Regulatory News (WYG)

27 Feb 2007 07:01

White Young Green PLC27 February 2007 For Immediate Release 27 February 2007 WHITE YOUNG GREEN PLC Interim results for the six months ended 31 December 2006 White Young Green Plc, consultant to the built, natural and social environment,announces its interim results for the six months ended 31 December 2006. Highlights: - 26% increase in gross revenue to £99.1m (2005: £78.6m) - 27% increase in net revenue to £79.0m (2005: £62.3m) - 31% increase in operating profit before amortisation of acquired intangibles to £8.4m (2005: £6.4m) - 10.7% operating margin on net revenue (2005: 10.3%) - 28% increase in profit before tax and amortisation of acquired intangibles to £6.9m (2005: £5.4m) - 11% underlying organic growth - 13% increase in adjusted earnings per share to 10.7p (2005: 9.5p) - 12% increase in interim dividend to 2.9p (2005: 2.6p) - 18% increase in net order book to a record of £330m (2005: £280m) - Four acquisitions completed since July 2006 Commenting on the results, Chairman Peter Wood said: "I am delighted to report an excellent set of results for the six months to 31December 2006. WYG enters the second half of the financial year with confidenceand optimism. Trading conditions are favourable in all key markets, the orderbook is at record levels and prospects are strengthening as WYG engagespositively to address many of the key demand led issues facing our communitiestoday." For further information, please contact: WHITE YOUNG GREEN PLC Tel: (0113) 278 7111John Purvis, Chief Executive OfficerBob Hartley, Finance Director BUCHANAN COMMUNICATIONS Tel: (020) 7466 5000Tim Anderson / Rebecca Skye Dietrich CHAIRMAN'S STATEMENT I am delighted to report an excellent set of results for the six months to 31December 2006. These results reflect an increased momentum in both revenue andprofit growth achieved as a consequence of enhanced double digit organic growthand a demonstrably successful acquisition strategy. Together these havedelivered a 31% increase in operating profit to £8.4m (2005: £6.4m) and afurther strengthening of the operating margin on net revenue to 10.7% (2005:10.3%). The acquisitions completed in the second half of the last financial year haveall contributed strongly to this result, in line with our expectations, andtheir integration is progressing well. The four acquisitions completedsubsequent to 1 July 2006 will assist further in maintaining this growthmomentum through to the year end and beyond. WYG therefore enters the second half of the financial year with confidence andoptimism. Trading conditions are favourable in all key markets, the order bookis at record levels and prospects are strengthening as WYG engages positively toaddress many of the key demand led issues facing our communities today. RESULTS In the six month period to 31 December 2006, gross revenue grew by 26% to £99.1m(2005: £78.6m). Net revenue attributable to in-house services increased by 27%to £79.0m (2005: £62.3m). This increase has been generated by a mixture ofacquisitive and organic growth. Excluding the contribution from acquisitionsmade in 2006, underlying organic growth was 11% (2005: 10%). The increase in operating profit of 31% to £8.4m (2005: £6.4m) was greater thanthe increase in revenue, reflecting the improvement in margin brought about by achange in business mix and further operational efficiencies. Operating profitmargin on net revenue improved to 10.7% (2005: 10.3%). Profit before tax andamortisation of acquired intangibles increased by 28% to £6.9m (2005: £5.4m).Profit before tax remained at £5.3m (2005: £5.3m). As noted in the Annual Report and Accounts last year the impact of the chargefor the amortisation of acquired intangible assets in the profit and lossaccount has increased as WYG has continued its acquisition activity. Thischarge reflects the amortisation of intangibles such as customer relationshipsand order books which have been valued as required under IFRS. The charge of£1.6m (2005: £0.1m) has been separately identified in the profit and lossaccount and has been excluded from the interpretation of underlying performancein the six months. Earnings per share before amortisation of acquired intangible assets increasedby 13% to 10.7p (2005: 9.5p). This increase reflects both the increase inprofitability and the increase in the average number of shares in issue in theperiod of 13% to 46.5m (2005: 41.1m) following the issue of shares insatisfaction of consideration for acquisitions and share option arrangements.Earnings per share after amortisation of acquired intangibles was 7.2p (2005:9.3p). Effective balance sheet management continues to be of utmost importance to theGroup and it is pleasing to note that although the quantum of net investment inwork in progress, trade debt and advance payments has increased as a result ofgrowth in the business to £67.0m (2005: £43.5m) underlying working capital daysin the UK and Ireland have fallen to 114 days (2005: 115 days). Net debt at 31 December 2006 was £43.2m (2005: £18.1m), principally as a resultof expenditure on acquisition activity in the period, giving a gearing level of52% (2005: 32%). Interest cost is covered 6.2 times (2005: 6.1 times) byoperating profit. In February 2007 the Group borrowing facility was reviewedand a new agreement signed. The main borrowing facility has been increased from£52m to £100m and extended to February 2012 which will support financing of thecash element of future acquisitions and the provision of additional workingcapital as WYG continues to grow. DIVIDEND The interim dividend is being increased by 12% to 2.9p (2005: 2.6p). This willbe paid on 9 May 2007 to shareholders on the register at 23 March 2007. REVIEW OF OPERATIONS WYG has enjoyed another six months of successful trading with order book up 18%to £330m (2005: £280m) and prospects for future growth strengthening across allthree principal areas of business activity. The business mix within the Group has continued to evolve in the period withmanagement services increasing to 36% of gross revenue (2005: 31%) as aconsequence of the acquisition of Tweeds, Nolan Ryan and Trench Farrow duringcalendar year 2006. This is higher margin business of more strategic value toclients. As a consequence the Group's operating profit margin on net revenuehas also increased to 10.7% (2005: 10.3%). Further improvements in margin areanticipated as a consequence of the continuing evolution of the business mix andthe influence of the acquisition of Adams Kara Taylor on engineering marginsgenerally. The change in the business mix within WYG is reflected in a change in sectorpenetration with the private sector providing the higher proportion of GB andIreland net revenue in the period for the first time in four years at 52% (2005:46%). This trend is expected to continue through to the full year as privatesector confidence continues to strengthen. Private sector net revenue in GB andIreland has grown by 49% in the period to £37.3m (2005: £24.1m) compared to anincrease of 18% in public sector net revenues. The latter reflects an on-goingcommitment to investment in health, education and law and order. The underlying organic growth in both gross revenue and operating profit hasincreased in the period to 11% (2005: 10%). This continues the WYG growth modelof blending consistent double digit organic growth with earnings enhancingacquisitions which act as catalysts for change and contribute to future organicgrowth through cross-selling, knowledge transfer and skills development. Thisstrong underlying organic growth is reflected in all three geographic areas ofoperation, with GB at 12%, Ireland at 10% and International at 7%. Engineering Engineering revenues grew in the period by 14% to £41.1m (2005: £36.0m) whichrepresents 41% of total Group revenue (2005: 46%). Operating margin on netrevenue was maintained at 7% whilst organic growth, exclusive of acquisitions,was an encouraging 9%. Trading conditions for engineering services, both in GB and Ireland, remainfavourable with strong sustainable growth being experienced at the present timein energy, transportation, health, education and private sector developmentwork. In the international arena the diversification of WYG International intotraditional engineering disciplines is also gathering pace with EU funded watersupply projects being secured in Algeria and Syria over recent months inaddition to a major transportation study in Poland. It is anticipated thatengineering revenues from International business will increase in the future inresponse to the recently established access to growth markets in Eastern Europeand the Mediterranean rim countries. In the domestic market WYG's engineering and environmental teams work closelytogether to provide a coordinated, integrated and leading edge response to thechallenges of climate change, energy management and the carbon agenda. This isdelivered through the WYG Sustainability Bureau which provides clients with asingle point of contact for all related technologies including renewable energy,carbon footprinting, sustainable low carbon design, energy modelling andenvironmental assessments. Projects carried out in the period include a majorcarbon footprinting study for a national retailer, the design of multi-turbinewindfarms at Daracott and in North West Scotland and the development ofbio-diesel plants in Belfast and County Tipperary in Ireland. The latter willbe the first facility in Ireland to comply with recently introduced EUregulations for the processing of animal waste into bio-energy and bio-diesel. In the increasingly important nuclear decommissioning market WYG has beenappointed by the Nuclear Decommissioning Agency to the peer group review team tochallenge the proposed range of decommissioning for all Magnox sites with a viewto accelerating the implementation programme. This is in addition to dealingdirectly with major decommissioning works at Sellafield for British NuclearGroup. Transportation, whether by road, rail or air, continues to offer significantopportunities for sustainable growth to WYG's engineering design teams. In thesix month period to 31 December 2006 WYG has been appointed as designer for theconversion of RAF St Mawgan into Newquay International Airport and is workingwith Transport for London on the tunnel cooling programme for London UndergroundLtd. More recently the Group has been appointed by Iarnrod Eireann (Irish Rail)to represent their interests in the redevelopment of Landsdowne Road Stadium inDublin with particular reference to the associated rail infrastructure. WYG's long and successful association with Balfour Beatty (BB) on majorhealthcare projects continued in the period with the appointment of the BB/WYGteam as preferred bidder on the £152m Fife Regional General Hospital PFIproject. This follows the successful joint delivery of major new hospitals atDurham and Blackburn and current on-going design and construction work atBirmingham, Pontefract & Pinderfields and Northern Batch hospitals. Thissuccessful relationship has recently been extended to cover similar majoropportunities in the education field in response to the Government's planned £36billion investment in schools during the period to 2011. In the private sector, development field work commenced in the period on thedetailed engineering design of a 50 storey tower for St George Developments atSt George's Wharf on the Thames. In addition, WYG's building physics team hasbeen appointed by Turnstone Developments to provide engineering services for alandmark development for Cambridge University on the West Cambridge Science Parkwhich combines scientific incubator facilities with high quality lettable officespace designed specifically for the technology market. Management Services Gross revenue from management services grew in the period by 45% to £35.4m(2005: £24.4m) and now represents 36% of total Group revenue (2005: 31%).Operating margin on net revenue also increased in the period to 15% (2005: 13%)confirming the importance of the rapid growth of management services within WYGto the delivery of further sustainable improvements in overall Group margins. Management services are defined as non-design related skills and comprise, in GBand Ireland, three key components: cost management, project & propertymanagement and health & safety management. In the international arena theycomprise the socio-economic advisory service provided by WYG International tothe development aid donor market including the EU, World Bank and UK Departmentfor International Development (DFID). These services are all of a highstrategic value to clients assisting them in key decision making processes and,as a consequence, attract higher margins. Trading conditions for management services, both in GB and Ireland, continue tobe very favourable with a particular focus on private sector development workand strategic initiatives in the upgrade and modernisation of CentralGovernment's defence and prison estates. With regard to the latter, the HomeOffice has recently appointed WYG to act as Client Representative on thepotential prison expansion programme at HMP Littlehay. This new £100m prison isintended to have 480 places and is to be designated as a Category B trainer. Itwill incorporate educational and workshop facilities, healthcare, welfare,administration and other functions and will be designed in accordance withgovernment targets for sustainable construction. WYG's profile in the delivery of management services to the private sectordevelopment market has been significantly enhanced by the acquisition duringcalendar year 2006 of Tweeds and Trench Farrow in the UK and Nolan Ryan in theRepublic of Ireland. All three businesses have integrated well into WYG andhave continued to secure important new assignments from their establishedclients during the six month period to 31 December 2006. Tweeds has beenappointed by London & Regional Properties as project manager and quantitysurveyor on the £500m Greenwich Wharf scheme which will link the Dome toGreenwich town centre in SE London and will act as a catalyst for the £4 billionregeneration of the Greenwich peninsula. In Ireland, Nolan Ryan has secured asimilar appointment as project manager and quantity surveyor on the €300mCitymart development in Kilkenny town centre. This project will start on sitein summer 2007 and will be completed over a six year period. It is anticipatedthat this enhanced exposure to the private sector development market will be ofparticular benefit to WYG's engineering and environmental skill groups in thefuture. WYG International continues to trade strongly in its traditional socio-economicregeneration market in addition to the diversification into technical servicesreferred to previously. In the period there has been a significant increase inactivity and opportunity in Romania and Bulgaria, together with encouraging newproject wins in the more mature Polish market. The most recent success is a£5.6m contract, awarded in January 2007, to tackle the specific challenges facedby people with disability in finding secure long term work in Poland. Thecontract is funded by the European Social Fund and is the largest evercommitment of its type by the fund in Poland. The project will provide servicesto at least 5,000 people with moderate to severe disabilities during calendaryear 2007 and aims to place them into work in the private, public or voluntarysector or into longer term education and training. The project will also workwith officials to increase their sensitivity to issues of disability to enablethem to offer improved services. WYG International has also recently been appointed by UK DFID to work with theAgency for European Integration in Kosovo to establish systems and proceduresfor the implementation of an action plan aimed at establishing a closerrelationship with the European Union and a better understanding of itsstructures and standards. This is seen as an essential step in achieving amulti-ethnic, stable and democratic Kosovo and progress is reported quarterly tothe European Commission. The Environment WYG helps to support and sustain the environment through the application of awide range of technology based environmental sciences and through the provisionof professional town planning services. Collectively these services representthe fastest growing element of WYG's business when acquisitions are discountedand currently provide 23% total Group revenue (2005: 23%). Gross revenues fromthese business streams increased in the period by 24% to £22.6m (2005: £18.2m)of which 20% was achieved organically. The balance of 4% was contributed by theacquisition of Farningham McCreadie in March 2006. Operating margin on netrevenue was slightly down in the period at 13% (2005: 15%) as a consequence ofincreased competitiveness in the ground technology sector. This is expected tostabilise over the full year. WYG's environmental skills have already been extensively utilised in preparatorywork for the 2012 Olympic Games. This is now expected to increase furtherfollowing the recent award of a framework contract by Nuttall and MorrisonConstruction for the provision of ground investigation services on the OlympicPark. It is anticipated that this will be the single largest site investigationand enabling works project ever undertaken in the UK. WYG's environmental portfolio extends beyond the traditional ground, air andwater technologies to include important specialisms including ecology,archaeology and waste management. In the period the Group has been appointed byLiverpool City Council to undertake a survey of all natural and semi-naturalhabitats in the city to inform the preparation of a strategy to maximisebiodiversity within the local development framework. Elsewhere, EnglishPartnerships has appointed WYG to project manage archaeological investigationsat the Royal Train Shed in Wolverton, Milton Keynes. Proposed development onthe site is close to the location of one of the first railway stations to bebuilt in England. The site also includes listed bridges and historic canalinfrastructure. In the waste management sector WYG has recently been awardedtwo significant contracts by the London Borough of Hammersmith and Fulham. Thefirst relates to market testing of refuse collection, recycling and streetcleaning services. It entails a review of current arrangements and theprocurement of future services to meet demanding technical and economicperformance standards. The second project has similar objectives but relates togrounds maintenance services. The environmental market has grown rapidly over recent years and is forecast togrow even further as the focus on climate change, the carbon agenda, wastemanagement and energy utilisation increase. Key drivers for growth willcontinue to be the volume and complexity of regulation and legislation, backedup by more vigorous enforcement, together with an increasing general awarenessof the potential impact of these issues on future generations. The protection of the environment from unsustainable and inappropriatedevelopment is, of course, the primary function of planning legislation and,over recent years, WYG Planning has grown rapidly to become one of the largesttown planning consultancies now operating across all regions of the UK. Thebusiness has been further strengthened over recent months by the acquisition inMarch 2006 of Farningham McCreadie with offices in Scotland and NorthernIreland, and more recently by the addition of Turner Holden in South WestEngland. Town planning is very much a front-end advocacy skill and, as such, itattracts higher margins. It also generates significant opportunities for otherWYG skill groups in support of planning applications, appeals and enquiries. ACQUISITIONS WYG has completed four acquisitions since 1 July 2006 for a total initialconsideration of £17.0m comprising Trench Farrow in October 2006, Adams KaraTaylor in November 2006, Malachi Cullen in January 2007 and Turner Holden inFebruary 2007. Collectively these high margin acquisitions add approximately£13.0m to gross revenue on an annualised basis. The financial details of theseacquisitions are contained in note 8 of the interim financial information. Trench Farrow is a niche project management consultancy based in London andSwindon which focuses particularly on the corporate fit out and urbanregeneration markets. It adds specialist complementary expertise to WYG'sexisting project management portfolio in the public sector and private sectordevelopment markets. Adams Kara Taylor is an award winning structural and civil engineeringconsultancy based in London. It works closely on iconic structures with many ofthe better known architects, developers and contractors, both in the UK andinternationally, and has grown consistently since its formation in 1996 on theback of a reputation for innovation, creativity and delivery. This acquisitionwill significantly strengthen WYG's position in the strategically importantLondon and export markets. The acquisition of Malachi Cullen is a small but important step forward in theongoing development of WYG in Ireland. This civil and structural engineeringconsultancy based in Athlone services a region of Ireland which is experiencingsubstantial and exciting economic growth. WYG will seek to enhance the range ofservices available to existing clients in that region and use the new officelocation to develop additional business for national clients. Turner Holden is a town planning consultancy based in Wellington, Somerset,which operates primarily in the house building sector. It will complement WYG'sexisting town planning operations in South West England and will createopportunities for WYG's environmental and transportation teams in the housebuilding sector in the region. All of these acquisitions have settled well into WYG and are performing at leastin line with expectations. All major clients have been retained and theintegration of business systems is well advanced in all cases. WYG continues to recognise acquisition consideration through a mix of cash andshares with earn-outs, where appropriate, being restricted to one year only inorder to facilitate integration. However, as the financial strength andborrowing capacity of the Group has increased then the cash/shares mix hasevolved from 30/70 towards parity. This improves earnings per share growth andencourages greater stability in share ownership from incoming vendors. EMPLOYEES WYG has grown significantly over the past three years whilst retaining theessential ethos, character and vision that has driven its corporate developmentsince inception. This could not have been achieved without the belief,commitment and enthusiasm of all of its staff including those who are relativelynew to the business. I therefore take this opportunity to thank all members ofstaff for their exceptional support and professionalism. I also thank all staff for their enthusiastic participation in delivering WYG'scorporate social responsibility commitments including community engagement,charitable fundraising, local educational programmes and environmentalinitiatives. All of these benefit local communities whilst also encouragingteamwork and mutual respect. BOARD OF DIRECTORS The Board announces today the planned retirement of Chief Executive Officer(CEO) John Purvis, when he reaches his 60th birthday in October of this year.John has given 17 years service to the Group, having joined the company in 1990. He has been a Plc Director for the last ten years, initially as Group ManagingDirector, and more recently as CEO following the retirement of his predecessorin December 2003. He will step down as CEO on 30 June 2007. John Purvis has made an enormous contribution to the successful growth of WYG,especially over the last three years as CEO. We are all very grateful for histireless efforts and wish him a long, happy and healthy retirement. The Board is well advanced in the appointment of a successor and hopes to be ina position to make an announcement shortly. The Board has also been strengthened in the period by the appointment of anadditional Non-executive Director. Robert Barr, who is currently ChiefExecutive of Heywood Williams Group Plc, joined the Board on 1 January 2007.His extensive operational and international experience will be of benefit to theGroup as it embarks on its next stage of growth and development. OUTLOOK WYG enters the second half of the financial year with continuing confidence andoptimism. Trading conditions are favourable in all key markets and geographiclocations. The order book is at record levels and prospects are strengtheningas private sector confidence and commitment continues to build. In GB andIreland WYG's skills diversity enables it to engage quickly and constructivelyin all areas of increased demand from carbon footprinting to renewable energyand from increased capacity in the prison estate to the likely impact on theplanning process of proposed new legislation covering development and floodrisk. In the international arena there is increased demand for socio-economicsupport in Poland, Romania and Bulgaria whilst diversification into the deliveryof technical services is gathering pace. The recent acquisition activity, and acontinued focus on strong underlying organic growth, provides a firm foundationfor further progress in the second half of the year and the acquisition pipelineremains strong. In the longer term WYG's exciting and ambitious Corporate Development Plan to2010 provides a practical framework for the realisation of the Group's vision tobe leaders in the built, natural and social environment. It focusesparticularly on the four key areas of activity considered to be of primarysignificance to the future development of WYG: energy and the environment,transportation and infrastructure, international diversification and the furtherdevelopment of higher value management services. The Group is thereforeconfident that it has the vision, financial capability, business model andskills mix to enable it to fulfil its ambitions and deliver success for allstakeholders. Unaudited Consolidated Income Statementfor the six months ended 31 December 2006 Six months ended 31 December 2006 Six months ended 31 December 2005 Year ended Before Before amortisation amortisation of acquired Amortisation of acquired Amortisation 30 June intangibles of acquired intangibles of acquired 2006 intangibles Total intangibles Total Total Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000Continuing operationsRevenue 5 99,140 - 99,140 78,573 - 78,573 167,487Operating expenses (90,703) (1,644) (92,347) (72,130) (63) (72,193) (154,405)Operating profit 5 8,437 (1,644) 6,793 6,443 (63) 6,380 13,082Finance costs (1,529) - (1,529) (1,039) - (1,039) (2,020)Profit before tax 6,908 (1,644) 5,264 5,404 (63) 5,341 11,062Tax 6 (1,934) - (1,934) (1,513) - (1,513) (3,224)Profit attributable to 4,974 3,828 7,838equity shareholders (1,644) 3,330 3,891 (63) Earnings per share 7Basic 10.7p (3.5p) 7.2p 9.5p (0.2p) 9.3p 18.6pDiluted 10.2p (3.4p) 6.8p 9.3p (0.2p) 9.1p 17.8p Dividend per shareInterim - proposed 2.9p - 2.9p 2.6p - 2.6p 2.6pFinal - proposed - - - - - - 4.6p 2.9p - 2.9p 2.6p - 2.6p 7.2pPaid 4.6p - 4.6p 4.1p - 4.1p 6.7p Dividends recognised in the period amounted to £2.1m (six months ended 31December 2005: £1.7m, year ended 30 June 2006: £2.8m). The interim dividendproposed but not recognised in these interim financial statements amounted to£1.3m (six months ended 31 December 2005: £1.1m). Unaudited Consolidated Balance Sheetas at 31 December 2006 As at As at As at 31 31 30 June December December 2006 2005* 2006 £'000 £'000 £'000Non-current assetsGoodwill 74,102 38,942 60,132Other intangible assets 11,058 1,176 7,910Property, plant and equipment 10,279 9,663 9,480Deferred tax assets 2,779 2,455 2,302Derivative financial instruments 52 - - 98,270 52,236 79,824Current assetsWork in progress 34,842 25,583 30,966Trade and other receivables 57,909 41,486 52,554Tax recoverable 893 435 599Cash and cash equivalents 9,553 8,676 9,322 103,197 76,180 93,441Current liabilitiesTrade and other payables (57,093) (39,221) (53,107)Current tax liabilities (4,067) (1,701) (2,230)Financial liabilities (9,306) (2,944) (6,092) (70,466) (43,866) (61,429)Net current assets 32,731 32,314 32,012Non-current liabilitiesFinancial liabilities (43,465) (23,873) (32,068)Retirement benefit obligation (4,103) (5,291) (4,251)Deferred tax liabilities (233) (125) (164)Derivative financial instruments (25) - - (47,826) (29,289) (36,483)Net assets 83,175 55,261 75,353 Shareholders' equityShare capital 2,387 2,079 2,304Share premium account 56,907 35,296 51,332Hedging and translation reserve (612) (360) (432)Retained earnings 24,493 18,246 22,149Total shareholders' equity 83,175 55,261 75,353 * as restated (see note 4) Unaudited Consolidated Statement of Recognised Income and Expensefor the six months ended 31 December 2006 Six Six Year months months ended ended ended 31 31 30 June December December 2006 2005 2006 £'000 £'000 £'000Profit attributable to equity shareholders 3,330 3,828 7,838Net exchange adjustments offset in reserves net of tax (207) 80 8Actuarial gains on defined benefit pension schemes - - 768Gains on cash flow hedges 27 - -Tax on items taken directly to equity 439 199 29Total recognised income and expense for the period 3,589 4,107 8,643 Unaudited Consolidated Statement of Changes in Shareholders' Equityfor the six months ended 31 December 2006 Six Six Year months months ended ended ended 31 31 30 June December December 2006 2005* 2006 £'000 £'000 £'000Profit attributable to equity shareholders 3,330 3,828 7,838Net exchange adjustments offset in reserves net of tax (207) 80 8Actuarial gains on defined benefit pension schemes - - 768Gains on cash flow hedges 27 - -Share-based payments 694 292 722New share capital issued, net of expenses 5,658 1,771 18,032Tax on items taken directly to equity 439 199 29Equity dividends paid (2,119) (1,681) (2,816)Net addition to shareholders' equity 7,822 4,489 24,581Equity attributable to equity shareholders of the Company at beginning of 75,353 50,772 50,772the periodEquity attributable to equity shareholders of the Company at end of the 83,175 55,261 75,353period * as restated (see note 4) Unaudited Consolidated Cash Flow Statementfor the six months ended 31 December 2006 Six Six Year months months ended ended ended 31 31 30 December December June 2006 2005 2006 £'000 £'000 £'000Operating activitiesCash (used in)/generated from operations (154) 4,489 9,375Interest paid (1,046) (627) (1,324)Tax paid (967) (1,617) (3,575)Net cash (used in)/generated from operating activities (2,167) 2,245 4,476 Investing activitiesProceeds on disposal of property, plant and equipment 145 130 250Purchases of property, plant and equipment (1,296) (832) (1,243)Purchases of businesses (10,444) (975) (16,759)Purchases of intangible assets (computer software) (635) (325) (1,072)Cash balances/(overdraft) acquired with businesses 2,829 (23) (699)Net cash used in investing activities (9,401) (2,025) (19,523) Financing activitiesNet proceeds on issue of ordinary share capital 408 121 7,334Equity dividends paid (2,119) (1,681) (2,816)Repayment of borrowings - (6,084) (6,084)Draw down of loan facilities 11,500 14,000 22,500Repayments of obligations under finance leases (1,574) (1,446) (2,950)Net cash generated from financing activities 8,215 4,910 17,984 Net (decrease) increase in cash and cash equivalents (3,353) 5,130 2,937Cash and cash equivalents at beginning of period 6,045 3,108 3,108Cash and cash equivalents at end of period 2,692 8,238 6,045 Unaudited Analysis of Changes in Net Financial Liabilitiesfor the six months ended 31 December 2006 At Other At 1 July Cash non cash 31 December 2006 flows Acquisitions items 2006 £'000 £'000 £'000 £'000 £'000Cash and cash equivalents 9,322 (2,598) 2,829 - 9,553Bank overdrafts (3,277) (3,584) - - (6,861)Bank loans due after one year (29,413) (11,500) - 246 (40,667)Loan notes due within one year (245) - - - (245)Finance leases and hire purchase contracts (5,225) 1,574 (321) (1,026) (4,998)Total (28,838) (16,108) 2,508 (780) (43,218) Notes to the Interim Resultsfor the six months ended 31 December 2006 1. Company details WYG is an international business providing consultancy services to the built,natural and social environment. 2. General information The interim financial information is unaudited. The financial information doesnot constitute statutory accounts within the meaning of section 240 of theCompanies Act 1985. The financial information relating to the year ended 30 June2006 is an extract from the latest published accounts which have been deliveredto the Registrar of Companies; the report of the auditors on these accounts wasunqualified. 3. Accounting policies The interim financial information has been prepared in accordance withInternational Financial Reporting Standards (IFRS) as adopted by the EuropeanUnion. The same accounting policies and methods of computation are followed inthe interim financial statements as the latest published audited accounts, whichare available on the Company's website at www.wyg.com. The Group has chosen notto adopt IAS 34 (Interim Financial Statements) in preparing the interimfinancial information. 4. Restatement The 31 December 2005 balance sheet has been restated to reclassify deferredconsideration as trade and other payables as opposed to being included withinequity as shares to be issued. This is in accordance with IAS 32 (FinancialInstruments: Disclosure and Presentation) which states that where deferredconsideration payable is fixed at the acquisition date and the number of sharesissued to satisfy that consideration varies according to the market price of theshares at the date the consideration is issued, the amount should be recognisedas a liability. 5. Segmental information For management purposes, the Group is currently organised into three operatingbusiness segments - Engineering, Management Services and The Environment. Thesebusiness segments are the basis on which the Group reports its primary segmentinformation. The segment results for the six months ended 31 December 2006 are as follows: Management The Engineering Services Environment Group £'000 £'000 £'000 £'000RevenueExternal sales 43,787 35,622 23,334 102,743Inter-segment sales (2,645) (263) (695) (3,603)Total revenue 41,142 35,359 22,639 99,140 ResultOperating profit before amortisation of acquired intangibles 2,658 3,453 2,326 8,437Amortisation of acquired intangibles (280) (1,234) (130) (1,644)Operating profit 2,378 2,219 2,196 6,793Finance costs (1,529)Profit before tax 5,264Tax (1,934)Profit attributable to equity shareholders 3,330 5. Segmental information (continued) The segment results for the six months ended 31 December 2005 are as follows: Management The Engineering Services Environment Group £'000 £'000 £'000 £'000RevenueExternal sales 38,165 24,548 18,653 81,366Inter-segment sales (2,157) (168) (468) (2,793)Total revenue 36,008 24,380 18,185 78,573 ResultOperating profit before amortisation of acquired intangibles 2,355 1,918 2,170 6,443Amortisation of acquired intangibles - - (63) (63)Operating profit 2,355 1,918 2,107 6,380Finance costs (1,039)Profit before tax 5,341Tax (1,513)Profit attributable to equity shareholders 3,828 6. Tax The tax charge for the six months ended 31 December 2006 has been calculated at28%, the estimated effective tax rate for the year ended 30 June 2007. 7. Earnings per share Adjusted earnings per share is calculated after adding back acquired intangibleasset amortisation of £1.64m (2005: £0.06m), giving adjusted earnings of £4.97m(2005: £3.89m) which are divided by the average number of shares in issue duringthe period ranking for dividend of 46,509,024 (2005: 41,102,590). Earnings per share is calculated on the profit after tax of £3.33m (2005:£3.83m) and the average number of shares in issue disclosed above. Diluted earnings per share is calculated by taking the earnings as disclosedabove and the average number of shares that would be issued on the full exerciseof outstanding share options and the issue of shares in respect of deferredconsideration of 48,923,768 (2005: 42,053,213). 8. Acquisitions On 23 October 2006 the Group acquired the entire share capital of Trench FarrowLimited. The initial consideration was £4.5m comprising £2.25m in cash and623,097 shares in White Young Green Plc at a market value of £3.611. Furtherconsideration of up to £1.4m is payable if certain performance targets are met.The additional consideration will be paid in either shares or loan notes at theoption of the Group. On 13 November 2006 the Group acquired the entire share capital of Adams KaraTaylor Limited. The initial consideration was £10.5m comprising £7.5m in cashand 784,419 shares in White Young Green Plc at a market value of £3.824.Further consideration of up to £4.0m is payable if certain performance targetsare met. The additional consideration will be paid in either shares or loannotes at the option of the Group. On 23 January 2007 the Group acquired the entire share capital of Malachi Cullenand Partners Limited. The initial consideration was £1.1m comprising £0.6m incash and 96,147 shares in White Young Green Plc at a market value of £4.775.Further consideration of up to £0.2m is payable if certain performance targetsare met. The additional consideration will be paid in either shares or cash atthe option of the Group. On 5 February 2007 the Group acquired the entire share capital of Turner HoldenLimited. The initial consideration was £0.9m comprising £0.54m in cash and76,750 shares in White Young Green Plc at a market value of £4.691. Furtherconsideration of up to £0.5m is payable if certain performance targets are met.The additional consideration will be paid in either shares or cash at the optionof the Group. 9. Availability of interim report The interim report will be posted to shareholders on 13 March 2007 and copieswill be available at the Company's registered office at Arndale Court,Headingley, Leeds LS6 2UJ, or on the Company's website www.wyg.com. This information is provided by RNS The company news service from the London Stock Exchange