18th May 2009 07:00
For Immediate Release 18 May 2009
White Young Green plc ("WYG" or the "Group")
Interim Management Statement
WYG, the international multidisciplinary consultant, is today issuing an Interim Management Statement for the third quarter ended 31 March 2009 and subsequent period to 18 May 2009.
As indicated in the Interim Report dated 25 February 2009 (the "Interim Report"), trading conditions across the businesses continue to be mixed and more challenging than those experienced in the first half of the financial year.
Significant progress has been made in implementing the Group's strategy which is centred on creating a more focused and efficient businesses and internationalising WYG. Decisive action has been taken to restructure the Group's operations. Total Group headcount has reduced by 324 between 31 December 2008 and 30 April 2009 in addition to the reduction of 235 announced in the Interim Report. WYG has announced the closure of seven regional offices and expects to announce the closure of a further five by the year end as it concentrates on stronger, quality focused regional centres.
As expected, WYG will incur significant exceptional costs during the second half of the financial year including redundancy costs and costs arising upon office closures. The majority of the exceptional costs relating to office closures are provisions for rent and associated costs that will be paid in the future on due dates in accordance with lease agreements.
Given the extensive restructuring of the Group, particularly in the Republic of Ireland, the Group will review the value of goodwill on its balance sheet at the year end and there will be a non-cash impairment charge.
The Group continues to focus on working capital management and cash generation and its net debt position remains broadly similar to that at the half year.
As previously reported WYG is in discussions with its lenders. These discussions are ongoing and the Board expects to make a further announcement in due course.
The Board is encouraged by the progress being made in the implementation of its strategy. The Board now expects that the full year profit before taxation and amortisation and before exceptional costs to be in the region of £12million.
A commentary on each of the five business units is set out below.
Engineering:
In line with its strategy of creating high quality and focused regional centres, the Engineering Business Unit has significantly reduced its staff numbers and is rationalising its current operating centres. This process will be completed by the end of June 2009.
The Engineering Business Unit has experienced a more challenging market which has seen a reduction in the rate at which orders are being received in some of its markets. However, orders continue to be received in the publicly funded Rail, Nuclear and Education sectors and in property maintenance.
Following a focus on international markets in Eastern Europe and the Middle East, the Business Unit continues to see a stream of opportunities and projects coming forward which will support Engineering's move to diversify its revenue streams into markets where the Group already has a successful track record.
Recent new projects include:
Appointed by Network Rail to work on the North London Line which will run from Richmond to Stratford and serve the Olympic Park;
Appointed by Network Rail and Transport for Scotland to the Edinburgh-Glasgow multi modal (Rail, Tram, and Airport) connection services which will service over 15 million users; and
Selected by Skanska to carry out mechanical and electrical services on the All Saints Academy Cheltenham, which provides new Education facilities for 1200 pupils. The project is part funded by the Church of England
Management Services:
The Management Services Business Unit continues to deliver solid profits despite trading conditions remaining mixed across the commercial client base. Turnover in the year to date is relatively similar to the same position last year, with an increase in Public Sector workload from 45 to 65%. This reflects a flexible and sustainable business model capable of transferring workload in a relatively short time frame. The Business Unit is responding proactively to changing market demand by constantly monitoring resources against order intake and, where appropriate, introducing flexible working conditions along with efficiencies in the operating cost base.
Recent New Projects include:
McDonalds - providing Employers Agent and Quantity Surveying services across the wide ranging refurbishment programme currently underway;
Festival City Cairo - executive project management for a £200m large and complex shopping centre development; and
MoD - RAF term commission year 5 - extension to an existing framework agreement for the specialist term commission for buildings and facilities to six RAF operational bases in England and Scotland to provide specialist support to the Royal Air Force, Defence Estates and The Royal Engineers
Environment Planning Transport:
The solid performance of the Environment Planning Transport (EPT) Business Unit has continued from the first six months of the financial year into the current period.
Demand remains good in planning, transport and in many environmental consultancy disciplines (particularly for public sector clients). However, demand has softened in a few areas such as the remediation of contaminated land and, as a result, part of the EPT Business Unit has been restructured to ensure resources are aligned to demand. Measures taken include flexible working within some environmental disciplines.
Whilst demand in the period has continued from many of EPT's core clients, such as clients within the retail sector, the Business Unit is now starting for the first time in several months to receive commissions to work on new sites from some of its developer and residential house builder clients.
Recent new projects include:
Appointed to provide transport advice for a major residential led mixed use development at Hucknall to the north of Nottingham including the potential to extend the existing Nottingham tram system;
Selected by MACE Group to undertake environmental and geo-environmental investigations at the New Barnfield Energy from Waste development in Hatfield, Hertfordshire; and
Supporting the Department of Communities and Local Government (DCLG) to undertake a review on the operation of hazardous substances consents and the Control of Major Accidents Hazards Regulations in England, Scotland and Wales. Part of this review will also look at the role of the planning system in dealing with development around major hazard sites.
Ireland:
In Ireland, against a background of an overall continuing decline in the economy, the second half of the financial year is proving to be challenging for the Business Unit. The order book has declined during the period and the Republic of Ireland Engineering and Management Services operations have been restructured to align workload and resources.
The Republic of Ireland Environmental business continues to trade relatively well with a large proportion of its work coming from the insurance sector. Operations in Northern Ireland are also holding up and WYG continues to win work from the public sector in particular.
Recent new projects include:
Appointed by the Northern Ireland Prison Service on a new prison at Magilligan, Co Londonderry, Northern Ireland in conjunction with WYG Management Services;
Appointed by Perkins & Will Architects for the new Desertcreat Training College for the Police Service for Northern Ireland, Ambulance and Fire Services; and
Secured the 2009 contract for the Environmental Protection Agency's groundwater monitoring project in the Republic of Ireland
International:
Trading conditions in certain international markets where the Group has a strong track record remain solid. The order book for WYG International is now at a record level of circa €111 million. The international public sector continues to provide strong opportunities across Eastern Europe, the Western Balkans and Africa in particular, while the European Commission remains the Group's single largest client. In line with the Group's strategy, WYG is building on its successful proven track record in existing countries and is also diversifying its geographies with new WYG legal entities being created in Abu Dhabi, South Africa and Kazakhstan.
Recent new projects include:
Cyprus - project funded by the European Union to provide consultancy services to create an open access information point which will bring the Turkish Cypriot community closer to the EU;
Poland - appointed by DARR (Lower Silesian Agency for Regional Development) to provide consultancy services and training to local government to improve project management of environmental projects; and
Poland - appointed by the Lipno and Naklo authorities to provide consultancy services for the construction of bypasses around the two conurbations. Commissioned also by the Department of Road and Rail Services in Wroclaw to provide consultancy services for the reconstruction of the road linking the Zerniki Wroclawskie roundabout with the Wroclaw-Wschod motorway junction in Krajkow.
For more information, please contact:
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White Young Green Plc
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Telephone: 0113 278 7111
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Paul Hamer, Chief Executive Officer
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David Wilton, Group Finance Director
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Buchanan Communications
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Telephone: 020 7466 5000
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Tim Anderson Or Rebecca Skye Dietrich
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