WYG aims for £175m in revenues through global expansion bid

WYG's Cork docklands regeneration project, Ireland
WYG's Cork docklands regeneration project, Ireland
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DESIGN and engineering consultancy WYG has announced ambitious plans to build revenue to £175m by 2018, from which it could generate ​pre-tax ​profi​ts of £15m.​

The Leeds-based group told investors at a strategy day yesterday that plans for international expansion will boost the group over the next three years.

The group’s chief executive Paul Hamer said: “We’re almost at the point where there are more opportunities than we can service and we’re having to prioritise.

“Across Africa, Europe and Asia, we’ve identified £300m worth of opportunities. We also expect our UK business to grow by 10 per cent organically over the next three years.”

The group, which has a £75m UK turnover at the moment, expects to be close to £90m to £100m by 2018, with profits increasing from its new activities.

​The group said the economic recovery in the UK is stimulating activity across many sectors and the outlook for consultancy is encouraging .

The firm, which recently worked on the Cork docklands regeneration project in Ireland, also anticipates growth across Europe, with Continental revenues rising from £30m to around £45m.

“We are also supporting the UK Government across Africa and in fragile states,” said Mr Hamer.

“This will result in turnover from these areas rising from £8m to £10m to up to £30m.”

​​WYG is working with Government departments such as the Ministry of Defence and​it said​ it is strongly positioned to secure new contracts across the Department for International Development’s Fragile and Conflict Affected States framework, with a particular focus on Africa.

WYG was recently awarded a three-year technical assistance contract by the European Investment Bank on behalf of the Western Balkans Investment Framework.

The group said its share of the contract will be worth £3.7m.

WYG will advise on infrastructure projects in Albania, Bosnia & Herzegovina, Kosovo, Macedonia, Montenegro and Serbia.

The firm will be a major partner in a consortium, led by COWI, to provide technical assistance to the Infrastructure Projects Facility.

WYG also said it will make £1.5m in cost savings once property leases come to an end in 2017.

“The targets we’ve issued are prudent, realistic and achievable,” said Mr Hamer.

“We’ve got great momentum in the business. There’s a real vibe and a buzz in the market.”

Analysts welcomed the news.

Nick Spoliar at WH Ireland said: “While letting go of unproductive sales, the company has already driven a £10m pre-tax profit turnaround. Strong performance both in the UK and overseas suggests a much increased sales platform at the same time that a significant margin opportunity exists.

“The 10 per cent growth in the order book to around £96m announced by WYG last month reflects the strong and increasing momentum, which includes the impressive 40 per cent win-rate.”

Analyst Andy Brown at N+1 Singer said: “The group is in better shape now than it has been for several years. Its highly differentiated offering and strong financial position mean it is well placed to benefit from an improving UK market along with increasing opportunities overseas.

“Recent acquisitions and new funding arrangements have enhanced its scope.”

Earlier this ​year WYG completed the acquisition of Delta Partnership Solutions​, which it described as an established business with a small but experienced team of permanent consultants and a large network of associates dedicated to improving lives of people in poverty.

“They have an excellent track record of working around the world on programmes to deliver better public services including for the governments of Kenya, Uganda and Rwanda, the bi-lateral aid agencies of Norway, Canada, Belgium, the UK and Sweden, as well as a broad range of non-government organisations and foundations,” said Mr Hamer.