Downturn sees WYG losses deepen

The group, which has just emerged from a painful restructuring which

saw its banks take a controlling stake, said revenue slumped 20 per cent to 115.2m in the six months to the end of December. After exceptional items, WYG made a pre-tax loss of 4.5m against a 2.1m loss a year earlier.

WYG changed its name from White Young Green when it completed its refinancing earlier this year. As part of its new strategy it is focusing on growing international revenues to make up for poor conditions in the UK and Ireland.

Yesterday it said while international revenues are picking up, "there is, as yet, no evidence of sustained or significant recovery" across the group.

WYG has also made more job cuts to cope with lower business levels, shrinking its workforce to about 2,500 at the end of the year, from about 2,700 six months earlier.

Chief executive Paul Hamer and finance director David Wilton, a new management team brought in to rescue WYG from collapse, inherited a company with a heavy debt burden after a series of poorly integrated acquisitions.

Coupled with falling revenues as the recession hit, the group came close to breaching banking covenants.

"We are quietly content with the results because we recognise that these results have been delivered whilst we were right in the middle of refinancing," said Mr Hamer. "There was huge pressure and distraction."

On an operating basis, stripping out exceptional costs, WYG made a 3.5m profit, down from 12.1m a year earlier. All its divisions delivered an operating profit.

"The stability is very positive when you think about where we were 12 months ago," said Mr Wilton.

"The underlying profit is a significant achievement. We were going through a pretty traumatic change programme."

Debt now stands at about 50m, and the group said results were in line with its expectations.

"We feel we have got control of our own direction," said Mr Hamer. He added the current 2,500 workforce is "about the right size".

Redundancies cost the group 1.2m over the period.

The group's domestic markets suffered from project cancellation and postponement over the period, with private development, housing and land regeneration all hit. WYG said it expects these markets to "remain challenging for the foreseeable future".

Bright spots included the defence sector, where funding appears "fairly sustainable". It is recruiting in environmental services, energy and management services.

The group sees increasing its work overseas as key to its growth in future.

WYG said winning new international business boosted its order book to 290m at the year end, compared to 260m in June.

This division grew revenue 31 per cent to 32.5m and multiplied profits five times to 1.2m.

Going international key to recovery