Contract wins to see WYG beat profit forecasts

The Leeds-based group said it has won new business across its core sectors of defence and urban development, including several projects with the MoD’s ‘Base Optimisation’ programme.

This programme oversees the streamlining of the MoD’s UK estate and the six-year programme to repatriate British forces back from Germany to the UK.

The firm is also winning planning work thanks to the increase in activity in the construction and housebuilding sector.

WYG’s chief executive Paul Hamer said: “Three of the major UK housebuilders – Persimmon, Wimpey and Barratt – have moved back into our top 20 client list.

“The Government’s budget stimulus has definitely boosted confidence in the housebuilding sector.”

In the UK, WYG is also winning work in the energy sector including decommissioning nuclear power stations.

“Sellafield is one of our major clients,” said Mr Hamer.

“We also work across the Magnox sites and we’re working with EDF at Hinkley. We’re also looking at wind power and waste to energy schemes.”

Overseas, it has won a number of new contracts in areas that have been hit by conflict.

Last year it won a significant two-year contract with the MoD to help run Camp Bastion, the main military base in Afghanistan.

“We’re also supporting clients across certain parts of Africa,” said Mr Hamer, adding that he couldn’t give details of these areas.

“We’re also in some Middle East states. We’re working with the MoD and the International Department of Development, helping them to re-stabilise fragile and conflict affected states.

“We’re following UK PLC into these countries. The MoD has a military programme. We look after everything else. We try to make their operations function as effectively as possible.”

WYG has also won work in Southern Africa, Bulgaria, Uzbekistan and the Western Balkans, including a large-scale project to advise SMEs in Croatia.

The group said that as a result of this new business, revenues have shown a modest increase which has reversed the negative trend of recent years.

The board said that in light of this positive recent trading it expects profits to exceed expectations – the second profits upgrade this year following the update in June.

“We have had a good, strong start to the year, with encouraging progress in both our UK and overseas markets,” said Mr Hamer.

“Looking ahead, we are beginning to see signs that the UK Government’s investment in major infrastructure projects and its encouragement of the house-building sector are having a positive effect on our core, front-end disciplines of planning and development.

“Overseas, we continue to build on our strong market position and maintain our focus on partnering to access new and emerging markets. Our strong track record in executing quality projects underpins our strategy of creating growth and becoming a global group.”

James Tetley, at N+1 Singer, said: “WYG’s trading update confirms a strong start to the year, ahead of our expectations.

“Notably, the update highlights modest revenue growth year to date, reversing the negative trend of recent years. The return to top-line growth has come through sooner than we expected and therefore we are upgrading our forecasts for the third time this year, an indication of the momentum building within the group.”

N+1 Singer upgraded its 2014 revenue forecast by £2m to £127.5m, with the upgrade slightly biased towards the UK business.

This translated into another upgrade in pre-tax profits to £3.8m, a rise of 12 per cent.

Analyst Nick Spoliar, at WH Ireland, said: “The stand-out feature of today’s update is that having fought the fight effectively on costs and strongly refocused the group’s strategy, WYG has now succeeded in moving the business into the growth mode – and growth notwithstanding vigorous cutting back of unproductive sales earlier.

“The increasingly strong showing of WYG’s urban and commercial development businesses, highlighted in the update, should come as no surprise, given the proliferation of positive UK data.”

The group expects to announce its half year results on December 2.

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