WYG Regulatory News (WYG)

25 August 2017

WYG plc

("WYG" or "Company")

Trading Update and Notice of Results

WYG, the global programme, project management and technical consultancy, today provides the following trading update for the year to date.

The Board continues to expect revenue for the current year to exceed £160m representing continuing year-on-year growth in line with market expectations. However, for the reasons explained below, the Board has revised its expectation of near term operating performance and now anticipates that operating profit (before separately disclosed items and share based payments) for the half year will be significantly lower than in the prior year.

Our International Development business announced major project wins in January and June 2017 and it was our expectation that these would mobilise quickly leading to a significant increase in revenue and profit during the early part of the financial year. However, two major projects have taken longer to start than we anticipated. In Turkey, we now expect a lull in activity around the calendar year-end during the transition between the first and second phases of the IPA funding programmes. We are seeing delays in the onset of new work under phase two and this is exacerbated by delays to the signing off of work and receipt of some milestone payments for projects closing out under phase one.

Having undertaken a review of the major contracts within our Consultancy Services business we have concluded that a small number of engineering contracts are likely to deliver lower profitability than originally forecast. This has been further compounded by lower than anticipated volumes under certain framework contracts, though activity on these is now starting to flow through.

Due to our Planning and Transport Planning practices performing below expectations in the early months of the year, we now expect operating profit from this core area of activity to be significantly below budget. In addition, the real estate business, which we acquired in October 2015, has also performed well below budget in recent months and we no longer expect this business to achieve its budgeted profit target, although this will also mean that we are likely to pay less deferred consideration than originally projected. Performance in all these business units is expected to show some recovery in the second half.

As previously reported, we have completed most of the restructuring necessary in Poland, however continuing softness in that market means that it is unlikely to achieve its targets for the year.

The Group's order book continues to be replenished and remains stable at £144m. Overall, our order book cover for the remainder of the current financial year, and the visibility on our future pipeline is such that we expect a significant recovery in performance during the second half, with an even more pronounced second-half weighting than was the case in FY17. The expected shortfall in performance in the first half and related working capital impacts will also affect our net debt position at the half-year. Together, these two factors have caused us to reduce our expectations of performance for the year as a whole. Looking further ahead the Group remains very well-positioned in its core markets and growth prospects for the medium term remain very positive.

We will provide a further update on trading at the time of our interim results which are expected to be released on 5 December 2017.

Douglas McCormick, Chief Executive Officer of WYG, commented:

"Having joined the business at the beginning of June and undertaken a thorough review of the budget and current trading, the Board and I consider it appropriate to revise expectations as we are announcing today. The impact of the first quarter, largely from slow trading, together with some legacy issues make this both prudent and necessary. I have visited some 20 of our offices and spoken with several hundred of our staff in my first three months and I am firmly of the view that the underlying business is a sound platform from which to grow in the medium term"

This announcement contains inside information for the purposes of

 Article 7 of Regulation (EU) 596/2014.

Contacts:

ENDS

NOTES TO EDITOR

About WYG

WYG is a leading programme, project management and technical consultancy employing over 1,600 people and operating from more than 50 locations across the UK, Europe, Africa, Asia and the Middle East. We specialise in creating and managing strategic assets for our clients. We engage with them in the early stages of a project, and often continue to advise them throughout its lifecycle.

Outside the UK, we have a strong, longstanding presence in a number of EU member states and pre-accession countries. We are a leader in international development, exporting our knowledge and networks to undertake ambitious projects that make a positive impact on infrastructure, socio-economic growth and the environment. Our in-house expertise encompasses seven global sectors: defence & justice, energy & waste, environment, mining & metals, social development and infrastructure, transport, and urban development. We also bring together a network of more than 20,000 partners and associates from around the world. This breadth of skills and knowledge allows us to provide a unique integrated approach to solve complex challenges wherever in the world our clients need us.

WYG plc's shares are traded on AIM, a market operated by the London Stock Exchange.