WYG in talks with lenders as losses spiral to £22m

Aaron Morby 13 years ago

Engineering consultant WYG is in talks to secure long term funding of the business after another tough six months of trading.

The firm suffered further pre-tax losses, including exceptional costs, of £22m in the six months to December 2010 on turnover slumped 27% to £84m.

Before exceptional costs WYG scraped in with a trading profit of £100,000.

WYG said it was in talks with its lenders to explore the options available to address long term funding requirements and would finalise a deal before 30 June 2011.

The consultant stressed it remained compliant with existing covenants and continued to forecast that its future borrowing requirements will be within the level of its overall banking facilities.

Paul Hamer, chief executive officer, said that the restructuring of the business, which saw 400 jobs axed in the last six months, was close to being completed.

He added that future growth would be delivered from plans to develop overseas work.

“After nearly two years of major restructuring, we now have an appropriate operational and support structure.

“The latter stages of this restructuring have been undertaken against a backdrop of profoundly difficult and uncertain market conditions in the UK, particularly in the public sector, and significant volumes of work have been cancelled, reduced or deferred.”

Following a full business review, the value of goodwill carried on the balance sheet was reduced by £12.1m.

The group incurred exceptional costs of £2.7m to cover redundancies and £3.1m in office closures.

He added: “The overseas markets in which we operate have remained relatively resilient.

“Following the restructuring, we have a more efficient globally organised business that is well placed to benefit from the opportunities in international markets.

“Our focus is now on growing our global revenues through key relationships and strategic partners.

“As part of this we are looking at options that may allow us to create a positive growth environment with focused investment in employee retention, key recruitment and non-organic expansion”, he added.

“Significant market challenges remain and we will continue to drive further efficiencies across the Group.”

The specialist consultancy, which employs around 1,800 people in over 40 countries, has also restructured into four key market segments, creating a more efficient global business that is better positioned to exploit international opportunities.

Part of WYG’s three-part strategy is to grow its international footprint and during the six months to 31 December 2010 it opened local entities in Syria, Croatia, Bosnia and South Africa, and its international order book increased by £12.6m to £89.2m.

Trading by new divisions

Buildings & Critical Infrastructure achieved revenue of £32.5m (2009: £53.2m) with an operating loss before exceptional and other items of £1.2m (2009: £0.5m profit).

Transport Solutions generated revenue of £8.0m (2009: £8.5m) with an operating profit before exceptional and other items of £0.9m (2009: £0.8m).

Energy, Sustainability & Environment contributed revenue of £12.1m (2009: £15.2m) with an operating loss before exceptional and other items of £1.4m (2009: £1.0m loss).

Risk & Assurance Services achieved revenue of £31.1m (2009: £38.3m) with an operating profit before exceptional and other items of £1.7m (2009: £3.3m).

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