Project delays hits WYG's share price

'‹'‹'‹Shares in project management consultancy WYG '‹plunged 19 per cent after the group warned that project delays will hit profits in 2017.
WYG's CEO Paul Hamer said the group's strategy to build a more broadly based business is starting to bear fruitWYG's CEO Paul Hamer said the group's strategy to build a more broadly based business is starting to bear fruit
WYG's CEO Paul Hamer said the group's strategy to build a more broadly based business is starting to bear fruit

The Leeds-based group said a combination of programme deferrals on existing contracts and delays in the confirmation of new contracts has led to weaker than anticipated profit performance.

In a trading update the company said: "Frustratingly, the group's higher margin service lines have seen a greater incidence of project delays.

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"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."

The group said ​activity levels in the UK have increased during the year.

​WYG's CEO Paul Hamer​ said:​ ​"Whilst our profit performance in the UK will not be as strong as we expected, growth across the ​g​roup and particularly the performance of our international operations provides tangible evidence that the ​g​roup's strategy to build a more broadly based, resilient and balanced business is starting to bear fruit."

​Analyst James Tetley at N+1 Singer said: "WYG’s trading update highlights a frustrating conclusion to 2017 for the UK business, where profitability is expected to be below the prior year despite continued revenue growth.

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"More positively, the performance of the international operations has been ahead of expectations for revenue and profit and the February order book remains a healthy £150m, consistent with the prior year end.

"Revised 2017 operating profit expectations are just under £9m, prompting a 14 per cent reduction in our pre-tax profit forecast. The strength of the order book and pipeline mean than management expectations for 2018 are unchanged anticipating another year of very strong pre-tax profit growth."

The group said it expects revenue for the year to March 31 to exceed £150m, representing year-on-year growth of 13 per cent, in line with market expectations.

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