WYG warns on UK profit performance, sees company revenue ahead

Shares in WYG Plc are down almost a fifth after it warned its full-year profit performance in the UK will not be as strong as we expected, but also flagged a double-digit rise in the company's revenue for the period.

The global programme, project management and technical consultancy said in a trading update for the year to 31 March that it saw full-year revenue growth of about 13% to £150m.

Directors had revised views for underlying operating profit to a figure approaching £9m, an improvement of about 25% on the year. Net debt at year's end was expected to be about £6m.

"Disclosed items, excluding amortisation of acquired intangible assets and share based payments, are expected to be approximately £2.5m including ... a charge for the restructuring of our Polish operations," the company said.

It added that activity levels in the UK had increased during the year.

"Although revenue during the fourth quarter, traditionally the group's strongest trading period, is expected to be higher than in the same period last year, a combination of programme deferrals on existing contracts and some delays in the confirmation of new contracts has led to weaker than anticipated profit performance," the company warned.

WYG said it found a a greater incidence of project delays in its higher-margin service lines to be frustrating.

"This, together with the investment we have made in building our UK capacity in anticipation of even higher activity levels that have not materialised, is expected to result in UK profitability for the year being lower than in 2016."

WYG continued that the performance of its international operations was ahead of expectations in both revenue and profit, with the MENA region performing particularly strongly.

With the exception of certain operations in Poland, which were now being restructured, all other areas of WYG's international business had delivered good performances and the pipeline of opportunities remained encouraging across all regions.

"Reassuringly, we have seen no material project cancellations and, as at the end of February, the group's order book of secured contracts was approximately £150m, broadly unchanged on the position at March 2016 notwithstanding the substantial increase in revenues booked during the period.

"Overall, the strength of our order book, particularly the level of cover for the coming financial year, and future pipeline is such that our expectations for the financial year ending 31st March 2018 remain unchanged."

At 09:49 GMT, shares in AIM-traded WYG were down 19.92% to 102.5p each.