WYG Regulatory News (WYG)

WYG plc

("WYG" or the "Company" or the "Group")

PRELIMINARY RESULTS FOR THE NINE MONTHS ENDED 31 MARCH 2011

AND

PROPOSED CAPITAL RESTUCTURING

WYG, the global consultancy to the built, natural and social environment, announces its unaudited preliminary results for the nine months ended 31 March 2011* and a proposed capital restructuring of the Group.

Strategy update:

·; Following appointment of a new executive management team in 2009, significant strategic repositioning, cost reduction and operational restructuring has been undertaken;

·; Three part strategy in place to create a more efficient business structure, globalise WYG's core capabilities and create "peaks of excellence" in chosen markets and geographies;

·; Operational restructuring now substantially complete with headcount reduced by over 50% and the Company's cost base reduced by £110m;

·; Group now focused on four global market segments:

·; Buildings & Critical Infrastructure

·; Transport

·; Energy & Environment

·; Assurance Services

Results overview:

·; Gross revenues of £121.5m for the nine months to 31 March 2011 (year ended 30 June 2010: £220.6m); international revenues increased by 8% (on an annualised basis) and now represent circa 35% of whole;

·; Revenues increased in all key overseas markets; UK and Ireland markets remain challenging;

·; Operating loss before exceptional and other items** of £0.3m (year ended 30 June 2010: profit of £7.7m);

·; Strong cash performance, with cash generated from operating activities of £4.3m (year ended 30 June 2010: £2.3m);

·; Net debt at 31 March 2011 reduced to £29.2m (year ended 30 June 2010: £33.9m);

·; New wins by the recently established businesses in South Africa, Croatia and Bosnia-Herzegovina;

·; International order book increased to £104.0m (year ended 30 June 2010: £100.6m);

·; Loss before tax of £28.6m (year ended 30 June 2010: £21.9m).

Proposed capital restructuring:

·; As announced on 31 March 2011, the Board has been reviewing the Group's capital structure;

·; The Board has entered a collaborative process of negotiations with the Group's lenders (the "Lenders") and, recognising that the Group's current level of debt is unsustainable, has, since the March announcement, considered a full range of alternatives to address the Company's capital structure and to allow the strengthened operational business to grow;

·; The Company expects shortly to announce a capital restructuring which includes proposals to:

·; raise £30m (net of expenses) by way of an equity fundraising;

·; convert the Group's net debt (excluding certain restricted cash balances) into convertible shares; and

·; redesignate its preference shares into deferred shares,

to create the balance sheet strength required to win new business and to recruit, retain and incentivise employees with appropriate performance-based rewards;

·; The planned equity fundraising will be conditional, inter alia, upon the Lenders' formal agreement and shareholder approval and, if completed, will involve a very significant dilution of existing shareholders;

·; The Board has received positive feedback from certain prospective institutional investors and has signed non-binding heads of terms in relation to the proposed capital restructuring with the Lenders ("Heads of Terms"). However, should the relevant approvals not be received, or the proposed equity fundraising ultimately prove unsuccessful, then the Group would be unable to satisfy its financial covenants and/or service its existing borrowings under the terms of its current financing arrangements;

·; The Board expects to announce details of the proposed capital restructuring very shortly, and no later than 30 June 2011.

Trading outlook:

·; Outside the UK, a significant and growing pipeline of opportunities exists in our key regions;

·; Business conditions in the UK and Ireland continue to be challenging;

·; Trading in the current financial year is in line with the Board's expectations.

* The Group announced, on 1 July 2010, that the Group's financial year end would change from 30 June to 31 March. Accordingly, these results are for a nine month period and may not be directly comparable to the results for the 12 month period ended on 30 June 2010.

** Other items relate to amortisation of customer relationships and order book intangible assets.

Paul Hamer, Chief Executive Officer, said:

 "WYG has undergone tremendous change over the last two years which has been challenging for everyone associated with the Group. The operational restructuring of the business is now substantially complete and WYG is much better placed to exploit the opportunities available to us in our chosen international markets.

"The immediate priority now is to complete a successful capital restructuring which would enable us to realise those opportunities, to retain and attract talent and, overall, to create a positive growth environment. The Board is confident that this capital restructuring can be completed and that WYG will move forward successfully with a strong balance sheet."

For further information, please contact:

WYG plc

Paul Hamer, Chief Executive Officer

David Wilton, Group Finance Director Tel: 0113 278 7111

Arbuthnot Securities (Nomad & Broker)

Nick Tulloch/Rebecca Gordon Tel: 0207 012 2100

MHP Communications

John Olsen/Katie Hunt/James White Tel: 0203 128 8100

Chairman's Statement

Introduction

The results being presented today are for the nine months to 31 March 2011, it having previously been announced that the Group's financial year end would move from 30 June to 31 March*. We are also today announcing our proposal to carry out a capital restructuring, which would include an equity fundraising to raise £30m (net of expenses).

If completed, the proposed capital restructuring will provide WYG with significant positive cash balances and a strengthened balance sheet, creating a viable, sustainable capital structure and a positive growth environment for WYG, both internally and externally.

Since the appointment of a new executive management team in 2009, a programme of significant and very necessary change has been implemented. The cost base has been cut by £110m, in part through reducing the Group's headcount by over 50%, a capital restructuring was announced in 2009 and completed in early 2010, and the Group has been strategically repositioned to better reflect the opportunities that exist in the international markets in which we operate. This operational restructuring is now substantially complete.

For the period under review, the UK marketplace was in a state of hiatus, both before and following the Government's two major spending reviews. Against a backdrop of unprecedented cuts in public sector spending, we focused on the development of our operations outside the UK and Ireland, where our markets remained more resilient. This led to a number of significant new international business wins in our traditional donor-funded markets, as well as in the area of technical services, where, prior to restructuring the business, the Group's offering was limited to the UK and Ireland.

As a result, in the nine months to 31 March 2011, Group revenue reduced to £121.5m (year ended 30 June 2010: £220.6m) but, encouragingly, international revenue increased by 8% on the comparable 12 month period to 31 March 2010. International revenue now accounts for c.35% of the whole on an annualised basis. The Group generated an operating loss before exceptional and other items of £0.3m (year ended 30 June 2010: £7.7m profit). Cash generation at operating level, however, was strong.

On 31 March 2011, we completed the sale of the business of Adams Kara Taylor ("AKT") to a management team backed by Tyréns AB, a Swedish consultancy firm, for cash consideration of £3.75m. It had become evident that the AKT business did not fit within WYG's new globally integrated capability-led business model and would be better suited to independent ownership.

Operations

Throughout this financial period, we have continued to implement our three-part strategy, adopted in 2009, to create a more focused and efficient business, to globalise the Group, and to create "peaks of excellence" across critical and sustainable sectors. Our operations are now managed on a global basis by capability in four key market segments:

1. Buildings & Critical Infrastructure;

2. Transport;

3. Energy & Environment; and

4. Assurance Services.

This new structure is stimulating much greater international collaboration and is underpinned by the Commercial Development & Operations Process introduced in the previous financial period. Through it, we seek to generate client value through the provision of high quality services whilst managing professional and contractual risk effectively.

We continue to work in partnership with our clients to deliver solutions to some of our markets' most sophisticated assignments and we remain committed to improving the quality of the built, natural and social environment. We submitted the UK's largest planning application for a £5.5bn redevelopment of Liverpool docklands, completed Europe's largest water enhancement project in Poland worth €60m and signed our first mutual cooperation agreement with a leading engineering consultancy group in China as part of our ongoing international growth strategy. In addition, we have incorporated a new company in South Africa where we have won a significant two-year project. We have also been awarded new contracts or contract extensions for the recently opened businesses in Croatia and Bosnia-Herzegovina.

Although domestic markets have been and remain very challenging, we continue to maintain and grow strong relationships with our domestic clients. Earlier this year, we continued our longstanding relationship with Northern Ireland Water and won a contract to design, manage and co-ordinate a new project to reduce sewer spills to water courses in Belfast, which forms part of a larger eight-year framework.

Our people and projects continue to be recognised with major awards including the ROSPA (Royal Society for the Prevention of Accidents) Gold Medal Award 2011, the Project of the Year Award at the RICS (Royal Institution of Chartered Surveyors) Northern Ireland 2011 Awards, and the award for Positive Environmental Impact at the 2010 British Expertise Awards for improving water governance and promoting the fair sharing of water resources in Central Asia.

During the operational period under review, we had to implement further redundancies and office closures across the Group. Whilst the operational restructuring is substantially complete, we expect to take further steps to increase the operational efficiency of the Group and continue to implement the previously announced strategy to rationalise the Group's UK property portfolio. There will, therefore, be more exceptional costs in respect of operational restructuring in the financial year ending 31 March 2012, although such costs are expected to be significantly less than those incurred in the recent past. The Directors are very grateful for the support shown by all the Group's employees, clients and other stakeholders during these challenging times.

Proposed capital restructuring

With the Group's operational restructuring programme now substantially complete, WYG's focus has turned to growing its global revenues through key relationships and strategic partners. The Board believes, however, that this growth can only be achieved with a strong balance sheet.

The restructuring, announced in December 2009, secured the immediate survival of the Group. However, as at 31 March 2011, the Company's net debt was £29.2m and there remains an additional £30m in nominal value of preference shares in issue. With a £58m facility due to expire in December 2012, the current capital structure and the costs of servicing it are unsustainable. A capital restructuring is therefore required.

As disclosed in the announcement of our interim results for the six months to 31 December 2010, we have been considering the options that may allow us to create a positive growth environment. With our advisers and the Lenders, we have considered a full range of alternatives that would deliver the most value for stakeholders, revise the Company's current capital structure and alleviate some of the covenants and controls that are currently in place to allow the strengthened operational business to move forward. Such alternatives have included obtaining capital from a variety of sources and the sale of all or parts of the business.

As a result we are now proposing to undertake a capital restructuring by way of a non pre-emptive equity fundraising to raise £30m (net of expenses), through a placing of new ordinary shares (the "Placing"). The Placing is expected to be conditional upon, inter alia, conversion of the Group's net debt (excluding certain restricted cash balances) into convertible shares, the redesignation of the preference shares into deferred shares, the provision 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 and obtaining shareholder approval. If completed, the Board believes that these proposals will provide the Group with significant positive cash balances and a strengthened balance sheet, creating a viable, sustainable capital structure enabling it to win new business and to recruit, retain and incentivise employees with appropriate performance-based rewards.

Based on feedback from initial meetings with certain potential institutional investors, discussions with the Group's advisers and the signing of the Heads of Terms with the Lenders, the Board is confident that the proposed Placing and capital restructuring can be completed successfully.

It is intended that further details regarding the proposed Placing and the capital restructuring, including the convening of a general meeting to propose resolutions to, inter alia, grant the Directors the authority to allot the new ordinary shares and disapply pre-emption rights, will be announced in the very near future, and no later than 30 June 2011. The Group currently remains in compliance with its existing covenants. However, as previously announced, the current covenant structure will tighten from 30 June 2011 and, given the major operational restructuring programme implemented across the Group, the continuing pressure on its domestic markets and the sale of AKT, the Board expects that WYG would not comply with these covenants were they to be tested on the due reporting date of 14 August 2011.

However, if the Placing and capital restructuring complete prior to the reporting date, then the facilities agreement will have been amended and restated and the financial covenants will no longer apply. There remains the risk that the Lenders could withdraw from or seek to re-negotiate the Heads of Terms. Furthermore, whilst the Board is confident that the Placing can be completed, there is no certainty that this will be the case. Accordingly, should the Lenders withdraw their support or the Placing fails to be completed for any reason or complete within the requisite timescales, the Group would be unable to satisfy its existing financial covenants and/or service its existing borrowings.

The Placing, if completed, will involve a very significant dilution of existing shareholders' holdings in the Company such that existing shareholders' holdings in the enlarged issued share capital would be minimal. The Board believes, however, that the Placing and the capital restructuring, if completed, would safeguard the future of the Group, enable it to implement its growth strategy in its chosen markets and provide more value to existing shareholders than any alternative option.

Dividend

No final dividend is proposed (year ended 30 June 2010: nil).

Outlook

Market conditions remain largely as they were when we announced our interim results on 31 March 2011. Business conditions in the UK continue to be challenging and, although revenues are now stabilising, there is still limited visibility of future work in both the public and private sectors. There are early signs of some modest improvements, particularly in relation to private sector development, ongoing retail expansion and the drive for green and renewable energy generation but, overall, the scale and timing of any sustained recovery in the UK remains very difficult to predict.

Outside the UK, we continue to see a significant and growing pipeline of opportunities in our key regions. These opportunities are in both the donor funded sector, in which we continue to have a strong and established track record, and also in the international public and private sector markets.

Overall, in the current financial year, WYG is trading in line with the Board's expectations.

Much has been achieved over the past two years to recreate a stable platform from which to operate and to grow. WYG is a significant organisation, employing over 1,500 people in the UK and internationally and delivering on some of the most sophisticated assignments in our chosen markets. There is further work to be done but, based on the substantial progress to date, if the proposed capital restructuring is successfully completed then WYG will be far better positioned to deliver growth and enhance the value of the Company over the medium term.

Mike McTighe

Chairman

16 June 2011

* The Group announced, on 1 July 2010, that the Group's financial year end would change from 30 June to 31 March. Accordingly, these results are for a nine month period and may not be directly comparable to the results for the 12 month period ended on 30 June 2010.

Chief Executive's Review

We continued to implement our three-part strategy, to create a more focused and efficient business, globalise the Group and deliver technical excellence across our chosen sectors throughout the period under review.

Trading conditions in many of the Group's domestic markets were generally challenging and, whilst there are opportunities in the UK and revenues are now stabilising, there remains ongoing uncertainty around public sector spending. However, we are heartened by potential opportunities, particularly within framework agreements in the public sector relating to defence, justice and nuclear new build and decommissioning. We consider that our potential to secure new work under these framework agreements would be further enhanced following a successful capital restructuring.

The Group remains focused on optimising performance across its established international operating businesses. We have seen encouraging success here, with revenues increased in all the Group's key overseas markets, including on infrastructure and transport projects and in programme management and policy advice services in Central and Eastern Europe, Middle East and Africa, and the Balkan states.

Ongoing implementation of working capital management procedures ensured that cash generation was, once again, significantly ahead of expectations. As previously announced, further improvements to the operating cost base will be generated through a programme of UK office consolidations and additional service efficiency gains.

Financial Performance

Gross revenue in the nine month period reduced to £121.5m (year ended 30 June 2010: £220.6m). Net revenue attributable to in-house services, after deducting revenue attributable to third parties on which the Group does not make a margin, was £106.7m (year ended 30 June 2010: £193m).

International revenues increased in all the Group's key overseas markets and in the period under review represented 36% of the whole. International revenues now account for circa 35% of revenues on an annualised basis.

The Group generated an operating loss in the nine month period before exceptional and other items of £0.3m (year ended 30 June 2010: profit of £7.7m). Operating profit margin on net revenue fell to -0.3% (year ended 30 June 2010: 4%), as a result of the challenging market conditions and our operational restructuring process. On a statutory basis, the Group made a loss before tax in the nine month period of £28.6m (year ended 30 June 2010: loss of £21.9m), reflecting the impact of the exceptional and other items in the period. Loss per share adjusted to exclude other items fell to 5.9p (year ended 30 June 2010: profit: 4.6p). On a statutory basis, loss per share was 35.9p (year ended 30 June 2010: 31.0p).

Cash generated from operating activities in the nine month period was £4.3m (year ended 30 June 2010: £2.3m), representing another strong cash performance across the Group.

Net debt at 31 March 2011 reduced from £33.9m at 30 June 2010 to £29.2m. These net debt figures include both cash balances held within the captive insurance company and restricted cash balances. Net debt at 31 March 2011, excluding these two categories, was £37.7m up from £36.6m at 30 June 2010. The movement in net debt is affected by the cash payment of exceptional costs incurred in the ongoing operational restructuring of the Group. It is worth noting that the net debt position at 31 March 2011 was better than both the latest budget and management's expectations at the time of the 2009 restructuring. The Group continues to be acutely focused on cash generation and the effective management of working capital.

The order book now stands at £178m (year ended 30 June 2010: £214.6m) which is made up of UK and Ireland orders of £73.6m (year ended 30 June 2010: £114.0m) and international orders totalling £104.0m (year ended 30 June 2010: £100.6m).

Strategy

The Board introduced the Group's three-part strategy in 2009 to:

1. create a more focused and efficient business;

2. globalise the Group; and

3. create "peaks of excellence" across critical and sustainable sectors.

Progress has been made on all three fronts and particularly on the globalisation of the Group. Traditionally, WYG's international presence has been focused on providing programme management and policy advice to countries and communities impacted by social issues, environmental emergencies, ethnic strife and political turmoil. WYG helps to stabilise and improve living conditions in impoverished regions and establish basic infrastructure services. Since the introduction of our new strategy, our objective has been to build on these traditional international service lines by offering or increasing the provision of our core technical capabilities. Revenue generated overseas has been encouraging, as the global markets in which the Group operates have proved more resilient than some domestic markets.

The Board intends to continue building on the Group's existing operations in key countries with its selected partners to optimise global opportunities, while concentrating on being "best in class" in our chosen markets.

Employees

At the end of March 2011, we employed 1,587 permanent employees compared to 2,148 at 30 June 2010. The majority of the reduction was from our engineering and management services teams in the UK and part of the reduction is attributable to the transfer of around 120 colleagues through the sale of AKT. However, this net reduction masks the investment in new employees in a number of growing business areas.

Exceptional and other items

The Group incurred significant exceptional costs during the financial period, which arose from the impairment of goodwill and from the ongoing operational restructuring programme. The Group reviewed the value of goodwill arising from past acquisitions carried on its balance sheet. Following this review, the value has been reduced by a total of £12.1m, a non-cash item. In addition, the Group incurred exceptional costs in respect of redundancies (£4.6m) and office closures (£4.9m). Other items relate to the amortisation of customer relationships and the order book. A significant element of the exceptional and other items incurred during the nine months to 31 March 2011, therefore, did not represent a cash cost in the period. The exceptional and other items are summarised below:

We expect to incur further exceptional costs in the year to 31 March 2012 in respect of ongoing operational restructuring, although such costs are expected to be significantly less than those incurred in the recent past.

In addition, in the event that the proposed capital restructuring is completed, there will be significant exceptional items in respect of this process relating to the professional fees and the accounting gain arising upon the debt for equity conversion. 

Business Review

Throughout the financial period the Group has been organised globally into four key market segments:

1. Buildings & Critical Infrastructure;

2. Transport;

3. Energy & Environment; and

4. Assurance Services.

This structure replaced the Group's five historic Business Units - WYG Engineering; WYG Management Services; WYG Environment Planning Transport; WYG Ireland and WYG International, although these continue to exist as legal entities.

During the financial period, the Group continued to take measures to improve efficiency, strengthen governance and enhance support services. The focus remains on fee earning efficiencies, optimising staffing structures and increasing the ratio of direct to indirect employees. We continue to implement our property strategy, based on a small number of "hub" offices with smaller operational satellites in appropriate locations. A significant proportion of the property portfolio is held on leases which are due to expire or have break clauses exercisable in the next 18 months. This will also drive down fixed IT and other costs and complements our IT strategy, which concentrates on more selective and justified investment. During the financial period, we implemented further specific enhancements to the recently upgraded Management Information System and additional enhancements are planned. As our enhanced operational risk controls and processes take effect and we resolve legacy issues, we expect to bring down further the costs of insurance across the Group.

Buildings & Critical Infrastructure (39% of Group revenue)

Buildings & Critical Infrastructure achieved revenue in the nine month period of £46.8m (year ended 30 June 2010: £97.9m) with an operating loss before exceptional and other items of £1.9m (year ended 30 June 2010: £1.9m profit).

In the UK, the Government's Comprehensive Spending Review immediately impacted on planned projects, particularly on the Building Schools for the Future ("BSF") programmes. However, we were successful in winning new work on the Blackburn with Darwen and Hertfordshire BSF projects.

We delivered a number of major projects in the healthcare, education, energy and defence sectors during the period and there was more consistent throughput of leisure projects than previously experienced. Our team was also part of the supply chains that secured framework contracts to deliver expertise in the NHS's new £3bn healthcare programme, ProCure21+.

Whilst we take a prudent view on any recovery in the domestic markets, our Buildings & Critical Infrastructure team is looking to benefit from the Group's new operational structure, which allows it to offer technical expertise across the Group's chosen global markets.

Transport (8% of Group revenue)

Transport generated revenue in the nine month period of £9.8m (year ended 30 June 2010: £12.3m) with operating profit before exceptional and other items of £1.1m (year ended 30 June 2010: £1.5m).

We maintained a steady workload during the financial period with signs of increased developer activity beginning to emerge. The loss of some public sector transport work was partially offset by private sector and overseas projects, including a new settlement near Jeddah, in Saudi Arabia, which will house over 100,000 people. The Transport team also increased its bidding and business development activity elsewhere in the Middle East.

We won work from EDF Energy to provide transport advice on, potentially, the first of the UK's new generation of new nuclear power stations at Hinkley Point in England. In Bulgaria, we are developing a financing proposal for the modernisation and sustainable development of the transport system in Stara Zagora and we are providing transport solutions in Warsaw, Gdynia, Radom and Bialystok in Poland.

Looking ahead, we expect the domestic market to remain steady for the next 12 months as any loss of public sector work due to the Government's Comprehensive Spending Review has been absorbed. Overseas, we believe that opportunities for growth will continue to present themselves.

Energy & Environment (16% of Group revenue)

Energy & Environment contributed revenue in the nine month period of £19.4m (year ended 30 June 2010: £31.6m) with an operating loss before exceptional and other items of £1.3m (year ended 30 June 2010: £1.0m profit).

Trading conditions across the UK and Ireland remained challenging, particularly in disciplines that were reliant on the domestic construction sector. However, parts of the business, including waste management, habitat protection and specialised technical services performed strongly within sectors where demand for these compliance orientated services has remained. Our geo-environmental services also managed to prevail in a highly competitive market, primarily driven by the need for energy companies to keep up with the drivers and developments in the renewables sector.

The demand for our environmental services overseas was strong with several large Government funded opportunities emerging in developing countries. We were appointed by the Ministry of Finance & Economy of Adjara, an Autonomous Republic of Georgia, to provide assistance with environmental improvements, under EBRD (European Bank for Reconstruction and Development) funding. In Poland, we developed a full project and financing proposal for the Polish Forestry authorities, targeting the recultivation of 24,000 hectares of forests in 57 locations. Our work has allowed Polish Forests to access €40m of European Union financing for the implementation of this groundbreaking and ambitious project. Towards the end of the period, we saw a significant increase in the number of enquiries for our environmental services.

For our planning and design services, the UK food retail sector continued to produce projects as a result of fierce competition between the major companies for new floor space. If implemented, the UK Government's proposed changes to the planning system, set out in the "Localism Bill", will create a need for greater engagement with the UK public, which should provide additional opportunities in the medium term. Our town planning and design services have performed well in key sectors such as regeneration, housing, retail, healthcare and minerals. In the UK public sector, despite a very competitive market place, we have continued to win work with local authority clients, particularly in specialist areas such as advice on retail development. An increased focus on overseas planning and design work has identified a number of opportunities from which we expect to create a growing stream of work in the future.

The outlook across Energy & Environment remains positive due to the increasing emphasis around the world on climate change, alternative energy, greenhouse gas emissions, waste management, clean water supply and the requirement for businesses to respond to new environmental legislation and to secure the benefits afforded by embracing sustainable solutions.

Assurance Services (37% of Group revenue)

Assurance Services achieved revenue in the nine month period of £45.5m (year ended 30 June 2010: £78.9m) with an operating profit before exceptional and other items of £1.8m (year ended 30 June 2010: £3.3m).

Market conditions for our project management services continued to be challenging, particularly across the UK public sector where the impact of the Government's Strategic Defence and Security Review resulted in reduced revenues during the period.

We secured a new four-year framework agreement with the Ministry of Justice ("MoJ") for the delivery of co-ordinated estate and property consultancy support, which gives all MoJ clients access to a range of our professional services for projects including repairs, refurbishment, relocation, extension, regeneration and new build projects.

Private and commercial development markets were subdued throughout the period as corporate clients, investors and developers remained cautious as the economy recovers from recession.

Our programme management and policy advice services secured a number of overseas contracts in Central and Eastern Europe, Middle East and Africa, and the Balkan states. In a very high profile project, we were appointed by the Office of the Prime Minister of the Republic of Poland to provide consulting and training services to the public administration to upgrade the quality and standards of their operations.

Whilst international market conditions remained steady, due to the benefit of stable international donor funding opportunities available from existing funding budgets, competition has increased as a result of shrinking domestic and private sector markets.

The outlook for programme management and policy advice services remains strong with donor funding programmes committed for the period to 2013. In the Commonwealth of Independent States, the private sector also remains strong, which should provide opportunities to offer technical services in infrastructure projects.

Paul Hamer

CEO

16 June 2011

CONSOLIDATED INCOME STATEMENT

For the period ended 31 March 2011

Prior year results have been restated for the reclassification of interest on bonds. Details are given in note 5.

Details of exceptional and other items are given in note 6.

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

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the period ended 31 March 2011

CONSOLIDATED BALANCE SHEET

As at 31 March 2011

The accompanying notes to the preliminary statement are an integral part of this consolidated balance sheet.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

For the period ended 31 March 2011

CONSOLIDATED CASH FLOW STATEMENT

For the period ended 31 March 2011

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

NOTES TO THE FINAL RESULTS

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 decision to move the financial reporting period to 31 March 2011 has resulted in a shorter current reporting period of nine months.

The principal activity of the Group during the period ended 31 March 2011 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 same accounting policies and methods of computation are followed as in the latest published audited accounts for the year ended 30 June 2010, which are available on the Company's website at www.wyg.com.

The preliminary results for the period ended 31 March 2011 are unaudited. The financial information set out in the announcement does not constitute the Company's IFRS statutory accounts for the period ended 31 March 2011 or 30 June 2010 as defined by Section 434 of the Companies Act 2006.

The statutory accounts for 2011 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies and issued to shareholders in August 2011.

Exceptional items are those that are both material and non-recurring and whose significance is sufficient to warrant separate disclosure and identification within the consolidated financial statements and are disclosed within their relevant business segment within segmental reporting. Items that may give rise to classification as exceptional items include, but are not limited to, significant and material restructuring closures and reorganisation programmes, asset impairments, and the profit or losses on the closure of offices. They have been separately identified as they represent an investment in the future performance of the Group and are not considered to be 'business as usual' expenses and have a varying impact on different businesses and reporting periods.

This preliminary statement is unaudited.

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 2011, there is no financial impact on this condensed consolidated financial report.

3. GOING CONCERN

Since the announcement within the interim results for the six months to 31 December 2010 of WYG's intention to consider the "…options that may allow us to create a positive growth environment…", WYG, its advisers and the Lenders have considered a full range of alternatives that would address the Company's capital structure and place it on a footing which would allow the strengthened operational business to grow. These included obtaining capital from a variety of sources and a possible sale of parts or all of the business.

WYG now announces that it proposes to undertake a capital restructuring by way of an equity fundraising to raise £30m (net of expenses), through a placing of new ordinary shares. The Placing is expected to be conditional upon, inter alia, conversion of the Group's net debt (excluding certain restricted cash balances) into convertible shares, the redesignation of the preference shares into deferred shares, the provision of revised bonding facilities in relation to those bonds which are in issue at completion of the Placing required as part of the Group's ongoing operations and obtaining shareholder approval.

The Board intends that the Placing takes place as soon as possible and expects it to be completed before the date on which the Group would otherwise be required to confirm its compliance with the financial covenants as at 30 June 2011. As previously announced, the existing covenant structure will tighten from June 2011. The Board expects that WYG would not comply with the financial covenants if they were to be tested on its due reporting date of 14 August 2011. The Group remains in compliance with its existing covenants.

The Placing, if completed, will involve a very significant dilution of existing shareholders' holdings in the Company, such that existing shareholders' holdings in the enlarged issued share capital would be minimal. The Board believes however that the Placing and the capital restructuring, if completed, would safeguard the future of the Group, enable it to implement its growth strategy in its chosen markets and provide more value to existing shareholders than any alternative option.

MATERIAL UNCERTAINTIES

The Company has entered into non-binding heads of terms with the Lenders. Whilst the Heads of Terms have been approved by the credit committee of each Lender, there remains the risk that the Lenders could withdraw from or seek to renegotiate the agreed Heads of Terms. Furthermore, whilst the feedback from initial meetings with potential institutional investors and discussions with the Group's advisers has led the Board to be confident that the Placing can be completed, there is no certainty that this will be the case.

The Placing requires shareholder approval at a general meeting by a majority of 75% of those shareholders attending and voting (in person or by proxy). In the event that the necessary approvals are not obtained and the relevant resolutions are not passed, the Placing will not complete and the Group would be required to re-enter negotiations with the Lenders.

Should any further negotiations with the Lenders prove unsuccessful or the Placing fails to be completed for any reason or be completed within the anticipated timetable then the Group will be unable to satisfy its existing financial covenants and/or service its existing borrowings.

The Board has concluded that the status of the Heads of Terms and the conditions relating to the Placing and the capital restructuring, including the need for the requisite shareholder approval, represent material uncertainties which may cast significant doubt on the Group's ability to continue as a going concern.

However, after considering these uncertainties and in light of the recent forecasts of the Group, the Board has a reasonable expectation that the Group will be successful in completing the Placing and for this reason considers it to be appropriate to continue to adopt the going concern basis in preparing the financial statements. The financial statements do not include adjustments that would result if the Group was unable to continue as a going concern.

Should these material uncertainties not be satisfactorily resolved prior to approval of the Group financial statements, the Group's auditors have informed the Board that they would expect to refer to these uncertainties in an emphasis of matter within their audit report.

4. 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), David Wilton (Group Finance Director) and Graham Olver (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:

Buildings & Critical Infrastructure

Transport

Energy & Environment

Assurance Services

Results for the year ended 30 June 2010 have been restated to reflect these key market segments.

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

The segment results for the period ended 30 June 2010 are as follows:

5. FINANCE COSTS

Bond interest is now classified in finance costs. Prior periods have been restated to reflect the classification from operating expenses.

6. EXCEPTIONAL AND OTHER ITEMS

The Group has incurred substantial exceptional items in the financial year. These arose predominantly from the impairment of goodwill (see note 10), and the ongoing restructure of the Group. A significant element of the exceptional and other items do not represent a cash cost in the financial year. Other items relate to the amortisation of customer relationships and order book intangible assets.

The AKT business was sold on 31 March 2011. Proceeds for the disposal were £3,750,000, with a net loss recorded after costs of £1,095,000.

7. TAX

Tax for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

Factors Affecting the Current Tax Charge for the period

The tax credit for the period is lower (year ended 30 June 2010: lower) than the standard rate of corporation tax in the UK when applied to reported loss. The differences are explained below:

8. EARNINGS PER SHARE

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

9. DIVIDENDS

There were no dividends paid or proposed in the current period or in the year ended 30 June 2010.

10. 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 one year financial plans approved by the Board.

Cash flows for the periods beyond the one year financial plans for the CGUs to which significant amounts of goodwill were allocated were calculated as follows: cash flows from years two 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 £12.1m were recognised in relation to the goodwill allocated to Energy & Environment and Assurance Services following further restructuring in those business segments. In addition, £1,950,000 of goodwill impairment relating to Ireland acquisitions was reclassified to acquired intangibles.

In the prior period, impairments totalling £6.9m were recognised in relation to the goodwill allocated across CGUs in Ireland.

11. OTHER INTANGIBLE ASSETS

12. PROPERTY, PLANT AND EQUIPMENT

In the prior year, £7.5m of assets under construction relating to software development costs were transferred to intangible assets and impaired. This is shown as part of the impairment of capitalised software development costs analysed in the exceptional items (note 6).

13. WORK IN PROGRESS

The value of work in progress comprises the costs incurred on a contract plus an appropriate proportion of overheads and attributable profit. Profit is recognised on a percentage completion basis when the outcome of a contract or project can be reasonably foreseen. Provision is made in full for estimated losses.

14. TRADE AND OTHER RECEIVABLES

15. TRADE AND OTHER PAYABLES

16. PROVISIONS, LIABILITIES AND OTHER CHARGES

Professional indemnity 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 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.

17. FINANCIAL LIABILITIES

18. SHARE CAPITAL

Preference shares

19. CASH GENERATED FROM OPERATIONS

20. ANALYSIS OF CHANGES IN NET DEBT