27th Mar 2014 11:37
LONDON (Alliance News) - WYG PLC saw its shares rise Thursday after it said it expects its pretax profit for the financial year that ends March 31 to be about 10% above current expectations, as revenues increased slightly but operating margins improved considerably as it won more profitable work.
It also said it would resume paying a dividend this year and will provide further details in June.
"That we are able to confirm our resumption of dividend payments underlines the board's confidence in continued progress as we move into the next financial year with a strengthened financial position, a healthy pipeline of opportunities and a continued focus on enhancing profitability," Chief Executive Paul Hamer said in a statement.
Its pretax pre-items profit was GBP0.7 million in the year to end-March 2013, compared with a loss of GBP5.8 million in fiscal 2012. However, it swung to a pretax loss of GBP3.3 million, compared with a profit of GBP11.9 million, including items. It had booked a gain of GBP17.7 million in 2012, mainly for a gain on debt restructuring.
For the current financial year, analysts are expecting the company to report a pretax profit of between GBP3.75 million and GBP4.00 million, according to forecasts on Morningstar.
In a statement, the management and technical consultancy focused on the built and natural environment said the UK economic recovery was stimulating activity across many of its sectors. It said the outlook for consultancy work was encouraging although there is some regional variability and pricing remains competitive.
"We have focussed our efforts on retaining the major, long term framework agreements that underpin our work and on maximising the opportunities that these provide," the company said.
WYG said it was seeing opportunities in both development markets and private markets oversease, although the delay in agreeing the next EU budget had had a knock-on effect on its pipeline of new work in Poland and Turkey.
It is still winning more work from UK government departments and said its is now well placed to win new contracts from the Department for International Development, particularly in Africa.
It said its category 1 order book had grown to GBP88.0 million by the end of February, from GBP77.6 million at the end of March 2013.
WYG said it was successful in retendering for all four of the major UK frameworks that were re-let last year and it remains confident that it will secure further major frameworks in the near term.
It also said that earlier this week, it agreed a new GBP15 million trade finance facility with Santander, which it will use to support its existing activities in Central Europe and Turkey and to "selectively re-enter certain markets where our new financing arrangements will support the pursuit of infrastructure development contracts with a more attractive working capital profile".
Earlier in March, it completed the acquisition of Delta Partnership Solutions Ltd, which it said has an excellent track record on public services contracts.
WYG shares were up 8.8% at 107.45 pence Thursday morning, one of the top gainers on AIM.
By Steve McGrath; [email protected]; @stevemcgrath1
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