Political uncertainty hits WYG

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Global project manager WYG said annual operating profits are likely to be "materially below" current market expectations and blamed UK political uncertainty for the fall.

The Leeds-based group said its UK markets are being hit by the current cautious business sentiment and political uncertainty.

Its consultancy services division has seen delays in investment decisions regarding new work as well as the deferral of activity on existing projects, across both the public and private sectors.

"As a result, we think it necessary to take a more cautious view as to the likely out turn for our UK business for the year such that we no longer expect to see the marked increase in our UK activity that has been typical of the final quarter of our financial year in the past," the firm said.

The group has opened discussions with its lending bank with a view to securing a deferral or waiver of the relevant covenant tests.

It said it already has a number of clearly defined actions underway in order to materially reduce its net debt position.

Douglas McCormick, chief executive of WYG, said: "While it is disappointing to be revising expectations today, subdued domestic economic conditions and the headwind from political uncertainty is affecting many businesses' willingness to commit to major new projects.

"This has particularly affected the construction sector which underpins much of our business in the UK."

He said he was confident that the actions being taken will improve the longer term prospects of the business.

"We will look to accelerate these actions to mitigate against the impact of an unusually difficult final quarter in the current uncertain macro-economic environment," he added.