WYG plc Half Year Report

Transcription

1 WYG plc Half Year Report

2 SIGNIFICANT GROWTH IN REVENUES, PROFIT BEFORE TAX AND ORDER BOOK ii WYG plc Half Year Report 2016

3 WYG, the global project management and technical consultancy, announces its half year results for the six months ended 30 September CONTENTS Overview Summary 2 Chairman s statement 8 Business review 14 Financial Statements Unaudited consolidated income statement 25 Unaudited consolidated statement of comprehensive income 26 Unaudited consolidated balance sheet 27 Unaudited consolidated statement of changes in shareholders equity 28 Unaudited consolidated cash flow statement 30 Notes to the unaudited Half Year Report

4 FINANCIAL HIGHLIGHTS A strong financial performance Revenue* up 17% to 73.5m (H1 2015: 62.6m) Adjusted operating profit before tax** up 27% to 2.8m (H1 2015: 2.2m) Profit before tax up 18% to 2.6m (H1 2015: 2.2m) Order book increased by 33% to 163.7m at 30 September 2016 (30 September 2015: 123.4m) Adjusted** earnings per share up 12% to 3.7p (H1 2015: 3.3p) Interim dividend up 20% at 0.6p per Ordinary Share (H1 2015: 0.5p) Cash outflow from operations reduced to 2.6m (H1 2015: 5.3m) Group exposure to defined pension liabilities closed out with return of surplus to WYG *Including share of Joint Venture revenues **Before separately disclosed items 17 % INCREASE TO 73.5 m (H1 2015: 62.6m) *Including share of Joint Venture revenues 2 WYG plc Half Year Report 2016

5 18 % PROFIT BEFORE TAX INCREASE TO 2.6 m (H1 2015: 2.2m) 27 % ADJUSTED OPERATING PROFIT BEFORE TAX** INCREASE TO 2.8 m (H1 2015: 2.2m) **Before separately disclosed items Adjusted** earnings per share of 12% 20% INTERIM DIVIDEND 3.7 p (H1 2015: 3.3p) **Before separately disclosed items at 0.6 p per Ordinary Share (H1 2015: 0.5p) INCREASE IN ORDER BOOK TO m UP 33 % As at 30 September 2016 (30 September 2015: 123.4m) UK up 31 % to 79.9m (30 September 2015: 60.9m) International up 34 % to 83.8m (30 September 2015: 62.5m) Cash outflow from operations reduced to 2.6 m (H1 2015: 5.3m) Group exposure to defined pension liabilities closed out with return of surplus to WYG 3

6 OPERATIONAL HIGHLIGHTS Strong UK growth and growing international pipeline of opportunities Group Continued to invest in IT, business infrastructure and capabilities to support future growth Group operating margin before separately disclosed items up from 3.6% to 3.8% UK (73% of Group revenue) 16% increase in revenue UK order book up 31% to 79.9m (30 September 2015: 60.9m) Secured a number of major projects including overseeing the roll-out of one of the UK s largest portfolios of new privately rented residential properties and appointed Programme Manager on the RAF Lossiemouth Development Programme Won five lots of the Transport for Greater Manchester Framework and re-appointed to the National Grid property framework Our Asset Management team has established a strong position in the retail sector, working with the Co-operative, McDonalds, TGI Fridays, Wagamama and Network Rail s tenanted retail units. International (27% of Group revenue) Overall revenue growth and return to profitability despite project delays which held back first half revenues in EAA MENA Region delivered a near 100% increase in revenue International order book increased by 34% to 83.8m (30 September 2015: 62.5m) Major project wins included: 13.1m Western Balkans IPF5 programme, 6.6m of projects funded by European Structural Funds in support of the Polish government s initiative to help the unemployed and 5.4m of EU technical assistance projects in Turkey. 4 WYG plc Half Year Report 2016

7 OUTLOOK Group revenue International 27% Order book increased to 163.7m as at 30 September 2016, providing a sound platform from which to deliver a full year performance in line with current market expectations UK business expected to benefit from the continued flow of opportunities from our public and private sector clients as a result of ongoing economic growth and the major programmes of infrastructure spending announced in the Autumn Statement UK 73% Market leading local businesses in Poland, Croatia and Turkey ideally placed to take advantage of the pipeline of opportunities from EU funds. 5

8 PAUL HAMER WYG Chief Executive Officer We are pleased to report that the growth in order book seen last year has been successfully converted into significantly improved revenue, profitability and cash flow performance, particularly in the UK. Despite some initial project delays, reflecting uncertainty immediately around the time of the UK referendum on the EU, we are seeing positive signs in almost all of our core services. UK government and infrastructure spending, which are the main drivers of WYG s front-end planning and consultancy business, have remained resilient and we are very encouraged by the proposals contained in the Autumn Statement. Internationally, the scale of the opportunity across our target markets continues to grow. WYG is well established, with market leading local businesses in Poland, Croatia and Turkey, each of which is ideally placed to take advantage of the pipeline of opportunities as EU funds are deployed under the new multi-annual financial framework. To date we have been successful in securing major new programmes resulting in the significant growth of our order book in the EAA and MENA Regions. The strong first half provides a sound performance platform whilst the substantial increase in contracted work deliverable during the second half gives us good forward visibility. This combination underpins our view that we will deliver a full year performance which is in line with current market expectations. In addition, with significant headroom within our 25m bank facility, we will continue to invest in the business to support future growth and to selectively review acquisition opportunities. 6 WYG plc Half Year Report 2016

9 For further information, please contact: WYG plc Tel: +44 (0) Paul Hamer, Chief Executive Officer Iain Clarkson, Chief Financial Officer MHP Communications Tel: +44 (0) John Olsen / Katie Hunt / Ollie Hoare N+1 Singer Tel: +44 (0) Sandy Fraser / Nick Owen WH Ireland Limited Tel: +44 (0) Tim Feather +44 (0) Ed Allsopp +44 (0)

10 CHAIRMAN S STATEMENT Introduction I am very pleased to report continued momentum in the growth of the business, with profit before tax (before separately disclosed items) for the half year ending 30 September 2016 up 27% on revenues which are 17% ahead of the comparative period. In addition, the Group order book, our key lead indicator, increased to 163.7m as at 30 September 2016, up 33% compared with the corresponding time last year and up 9% since 31 March Specifically, the Autumn Statement contained welcome announcements on proposed UK government spending through the creation of the 23bn National Productivity Investment Fund. The majority of the fund will be targeted at housing and transport to accelerate new housing supply and ensure the UK s transport networks are fit for the future. Not only are both these sectors firmly aligned with WYG s core areas of competence in planning and transport planning, they feed our other disciplines including environment, and urban & landscape design. We anticipate a significant number of new opportunities when specific projects are decided and key clients, such as the Homes and Communities Agency and many local councils, look to businesses like WYG with a strong track record of delivering major programmes of work. We are also encouraged by the announcement of new money for Local Enterprise Partnerships (LEPs), particularly as the largest proportion of this spending will be directed to the UK regions where we have a strong footprint and excellent links with many of the LEPs. As an organisation that contracts directly with the EU, we are mindful of the challenges presented by the outcome of the UK s EU Referendum and the on-going uncertainty surrounding its eventual implementation. To date we have seen no material impact on financial performance from the decision. Our international business model is robust and agile and our UK and international subsidiaries have continued to win work with the major international finance institutions and other clients. In the run up to the EU Referendum we undertook a review of the potential impact that a vote to leave the EU would have on the business and we have taken steps to ensure that our model remains appropriate and resilient. Nevertheless, we continue to keep the issue under very close scrutiny. 8 WYG plc Half Year Report 2016

11 Mike McTighe Chairman 9

12 Strategy Our strategy is to grow by developing and serving the markets for our consultancy and international development expertise through both organic investment and selective acquisition. We are currently finalising a new strategic growth plan for the Group which aims to consolidate our position as a trusted adviser to our clients whilst ensuring the business has an efficient, agile and resilient structure. This plan will fully harness the specialist skills across our business and be focused on addressing the major challenges of climate adaptation, energy planning, major infrastructure projects, water management, mass migration and the UK housing shortfall. In today s markets, we believe that agility will be key to future success. The new structure will position WYG best to generate, and rapidly respond to, the most attractive opportunities presented by our clients and potential clients needs as they navigate the current uncertain and dynamic global market and political environment. We expect to provide a further update in Spring Business Review Despite some initial project delays in our UK Region, at the time of the UK referendum, we are seeing positive signs in almost all of our core services. UK government and infrastructure spending have remained resilient and the Group has won a number of new contracts, ranging from projects for the Ministry of Defence at RAF Lossiemouth and implementing the Army Basing Plan on a number of sites around Salisbury Plain to preparing a strategic masterplan for the town of Baldock for Hertfordshire County Council. The scale of the opportunity in other targeted international markets continues to grow, unaffected by the UK s referendum result. WYG is well established and owns the leading local businesses in Poland, Croatia and Turkey. These are ideally placed to take advantage of the significant opportunities that are available as EU funding is deployed under the current multi-annual financial framework (MFF ). Although the EAA Region had a slower than anticipated start to the year, as we announced on 8 August 2016 we have won a number of important new contracts and contract extensions and are encouraged by the pipeline of opportunities. We have undertaken some restructuring of this business to better align it with the new work the team has won and the business opportunities offered by the European Structural Funds. We are pleased to report that there has been no immediate impact on our MENA Region from the recent political unrest in Turkey, although we continue to monitor developments closely. We have secured further projects during the period and our budgeted revenues for the remainder of the current financial year are fully underpinned by contracted work and we therefore expect this Region to continue delivering a strong performance. The Group has made a number of investments in premises, programmes to enhance its IT hardware and software, and the ongoing rollout of our project management and other essential programmes. Our portfolio of recently acquired companies is performing in line with overall expectations. We continue to keep a number of new acquisition opportunities under review. Our projects with the UK s Ministry of Defence and Foreign & Commonwealth Office take WYG into a number of major overseas regions, including Bahrain and Kenya, and complement our growing relationship with the Department for International Development (DfID) as we expand our portfolio of work in Fragile and Conflict Affected States (FCAS). 10 WYG plc Half Year Report 2016

13 Results Gross revenue (including our share of Joint Venture revenues) was up 10.9m to 73.5m (H1 2015: 62.6m). We continue to focus on tightly managing our cost base whilst ensuring we have the most appropriate mix of people and capabilities to win and deliver attractive contract opportunities. This ongoing focus has resulted in Group operating margin (before separately disclosed items) increasing from 3.6% to 3.8% Underlying profit performance also improved with adjusted profit before tax (before separately disclosed items) increasing by 27% to 2.8m (H1 2015: 2.2m). On a statutory basis, the Group made a profit before tax (after separately disclosed items) of 0.8m (H1 2015: 2.1m) on pre-joint-venture revenues of 72.9m (H1 2015: 62.3m). The reduction in statutory profit before tax was due to a one off credit in the prior period relating to the legal settlement of the 1986 pension scheme. This was included in separately disclosed items. Earnings per share adjusted to exclude separately disclosed items was 3.7p (H1 2015: 3.3p). The Group closed the period with net debt of 4.9m (H1 2015: net cash of 3.4m) reflecting the higher working capital requirement driven by the increase in revenue, deferred consideration on acquisitions and planned spending on legacy items. Operating cashflow improved significantly with an outflow of 2.6m (H1 2015: 5.3m outflow). By focusing on cash generation and the effective management of working capital, we expect cash balances (before any further spending on any potential new acquisitions) to show their usual increase in the second half. People and Awards In response to increasing demand for our services, total headcount as at 30 September 2016 has increased to 1,647 (31 March 2016: 1,596) and we maintain our focus on ensuring our people and capabilities are aligned to the key opportunities we are seeing. To support this growth in demand we have strengthened our internal recruitment capability, now directly sourcing more than 80% of all new recruits. Furthermore, we have seen improved levels of employee retention and engagement reflecting investment in our remuneration and reward structures, our graduate development programme, succession planning and training in performance and absence management. The performance of our business has been recognised in a number of prestigious awards in the period. These were not only in respect of specific projects such as Kirkstall Forge (Best Brownfield Infrastructure Award) and the Welsh National Sailing Academy (Sustainability Award) but also on a national level, winning the Association for Consultancy and Engineering s Best UK Business Performance Award for a large firm and the AIM Awards Best Investor Communication Award which recognises honest, accurate and consistent communication with all levels of shareholders and potential shareholders. Dividend Reflecting the Board s confidence in the Group s improving results and outlook, a higher interim dividend of 0.6p per ordinary share (30 September 2015: 0.5p) has been approved. The interim dividend will be paid on 3 April 2017 to shareholders on the register on 10 March 2017 and WYG shares will trade ex-dividend on 9 March Pensions WYG gave notice to the Trustees of the WYD Pension Scheme to trigger the winding up of the Scheme with effect from 1 June The winding up has resulted in the return of a surplus to WYG of 0.5m net of tax in September As a result of these actions, WYG no longer has any exposure to defined benefit pension liabilities. 11

14 Outlook Our UK business is expected to benefit from the continued flow of opportunities from our public and private sector clients as a result of ongoing economic growth and the major programmes of infrastructure spending announced in the Autumn Statement. Our core front-end planning and consultancy business is ideally positioned to advise clients on how to create and protect value from their investments and assets, and to benefit from early stage feasibility work. This frequently leads to further work as WYG is retained to develop and enable projects and manage risks for our clients through the full life cycle of their projects. Internationally, the scale of the opportunity across our target markets continues to grow. WYG is well-established with market leading local businesses in Poland, Croatia and Turkey which are ideally placed to take advantage of the pipeline of opportunities as EU funds flow under the MFF These remain unaffected by the UK s vote to leave the EU, as evidenced by the major new projects won and the significant growth in the order book of our EAA and MENA Regions. The strong first half provides a sound performance platform whilst the substantial increase in contracted work deliverable during the second half gives us good forward visibility. This combination underpins our view that we will deliver a full year performance which is in line with current market expectations. In addition, with significant headroom within our 25m bank facility, we will continue to invest in the business to support future growth and to selectively review acquisition opportunities. 12 WYG plc Half Year Report 2016

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16 BUSINESS REVIEW 14 WYG plc Half Year Report 2016

17 Group revenue (%) UK EAA MENA by region 72.9% 13.2% 13.9% 15

18 UK 72.9% of Group Revenue Strong revenue growth The UK region generated a 16% increase in revenue to 53.6m (H1 2015: 46.2m) with an operating profit before separately disclosed items and central overheads of 4.6m (H1 2015: 4.5m). Our Management Services discipline has continued to secure a number of major projects, including supervising the roll-out of one of the UK s largest portfolios of new privately rented residential properties for Sigma Capital and our recent appointment as Programme Manager on the RAF Lossiemouth Development Programme, where we are providing technical support and enabling infrastructure delivery to support the arrival of new aircraft. The Asset Management team has established a strong position in the retail sector, working with the Co-operative retail group, McDonalds, TGI Fridays, Wagamama and Network Rail s tenanted retail units. In addition, two long term surveying frameworks have been secured in the North West with United Utilities. Growth has also continued in the PFI market, defence & justice and nuclear sectors. The planning business cemented its place as one of the UK s foremost planning consultancies. The Manchester planning team won the RTPI North West Award for Collaboration for its work on Chester s new cultural centre Storyhouse, whilst our Southampton team won the national Planning and Placemaking Award for Stakeholder Engagement recognising its work on the Linden Homes housing development at Broughton. Garden Village in Cheshunt, Hertfordshire and to prepare a strategic master plan for the town of Baldock. In addition, our architects have helped the Welsh Government secure the location of Aston Martin s manufacturing centre for its new crossover vehicle. We have been appointed on five lots of the Transport for Greater Manchester Framework and have been selected to undertake major highway design and supervision roles on schemes including the Ely Bypass and Snowhill Phases 1 and 2 in Birmingham. Following our work on the award winning Welsh Sailing Academy in Phwelli (see image right), we have secured design work for a number of further leisure projects. We have also been awarded a commission for structural and building services design for the new Keele Institute for Entrepreneurship at Keele University. The Environment business also continues to grow, with particular successes in the development, infrastructure and, increasingly, corporate sectors where we have achieved increased revenues from our due diligence services. Our recent re-appointment to the National Grid property framework provides strong underpinning for our order book and extends our continuous relationship with this client to 25 years. Our total UK order book has continued to grow, closing at 79.9m: up 31% from 30 September The Urban and Landscape Design team have been commissioned to develop a comprehensive master plan for the creation of a new 16 WYG plc Half Year Report 2016

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20 Sigma Housing Delivering large PRS portfolios The private rental sector (PRS) has overtaken the social rented category in terms of size and importance and is predicted to account for 20% of households by 2020 (this was 10% in 2000). Regeneration specialist Sigma Inpartnership is aiming to create the largest new build, professionally managed PRS portfolio in the UK to help meet this increasing demand. Having entered into a bespoke partnering arrangement with Countryside Properties to deliver over 900 PRS homes across 16 sites in the North West of England they approached us to act as employer s agent and quantity surveyor for the first phase of their scheme. The new houses and apartments will provide easy to maintain, quality accommodation across the region regenerating communities, a key objective of the government s Northern Powerhouse agenda which aims to boost growth in the North of England. Our role has involved working to an intensive and demanding programme to ensure the pre-let properties are ready for tenants when promised. Owing to our successful approach on the first phase our experts have also now been appointed to work on phase two delivering many more affordable homes for people in the North West. 18 WYG plc Half Year Report 2016

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22 Polish Government initiative to help the unemployed This contract is being delivered through a series of planned actions, supporting the Silesian Labour Office, in eight districts of this industrial region. It involves us providing short-term training and initital assistance to the unemployed. 20 WYG plc Half Year Report 2016

23 EAA 13.2% of Group Revenue Growing international pipeline of opportunities WYG operates through four sub-regional business units in EAA - Central and Eastern Europe (CEE), South East Europe (SEE), Africa and Asia. In the period, the EAA region generated revenue (including our share of Joint Venture revenues) of 9.7m (H1 2015: 10.9m), which after the management actions of last year again delivered a breakeven operating position before separately disclosed items and central overheads. In CEE, the largest wins were recorded in Poland, where we won a portfolio of labour market projects for Polish government institutions with a secured value of 6.6m potentially rising to 12.4m. These projects, which are to be implemented in three regions, involve the provision of targeted training tailored to job seekers, as well as the provision of job search facilities, placement and counseling services to the unemployed. SEE continued to be the EAA s strongest performer in the period, delivering a portfolio of regional socio-economic and infrastructure projects, especially in Croatia. In July we were pleased to announce our position, as consortium leader on the latest phase of the multi-year Infrastructure Projects Facility (IPF) in the Western Balkans. WYG has been involved in this programme since 2008 and the latest contract, due to last four years, is estimated to be worth 13.1m. In light of the changing market conditions in Africa, we have introduced a number of steps to better align our offering with the regional footprint, further enhancing our flexibility in working throughout the continent. The longer term outlook for EAA remains very positive. International development opportunities in Africa and Asia continue to fuel longer term order-book growth in the region, whilst the EU funding cycle has experienced renewed momentum. The Migration Partners have been successful in engaging with EU institutions at senior levels and we anticipate that opportunities will flow as the EU s migration strategy develops over the next 12 months. As a result, the conditions are in place for sustained growth across the region. At 30 September 2016, the Region s order book stood at 60.0m (2015: 42.8m). In Africa and Asia regions our services in Public Financial Management and Monitoring and Evaluation practices recorded strong performances, as we benefitted from their position at the very core of our International Development offering in those regions. The region benefitted from the strategic push into Africa leading to several significant wins in our targeted sectors. 21

24 MENA 13.9% of Group Revenue Strong revenue and profit growth The MENA region, which includes Turkey, has enjoyed a very successful first half, contributing revenue of 10.2m (H1 2015: 5.5m), and generating an operating profit before separately disclosed items and central overheads of 0.4m (H1 2015: loss of 0.2m). The Region generates most of its revenue from socio-economic, technical and engineering programmes, the majority of which are funded under the Instrument for Pre-Accession Assistance (IPA), a component of the MFF We continue to focus on our core strength of socio-economic consultancy, where we are the market leader in Turkey, having maintained and further extended our leading position with a number of new awards. In technical services, we have maintained our market leading position in the water & wastewater sector, where we are currently delivering five major projects, including two contract extensions namely for Ordu and Siverek Water & Wastewater Projects. In August, we were pleased to announce that we had been awarded three new technical assistance projects worth 5.4m in aggregate. These are aimed at developing common product processes and infrastructure among SMEs and entrepreneurs, increasing regional competitiveness and developing the operational capacity of a major logistics centre for the port city of Samsun on the Black Sea coast. We continue to work on a number of new business opportunities with various international development agencies, and we began work on private sector and other EU-funded projects in the Middle East. These efforts are yielding results and we hope for continued growth in this area. We expect the current high volume of opportunities to continue in the second half and, given our success to date, this should help to underpin a strong performance in the MENA region for the full year. At 30 September 2016, the Region s order book stood at 23.3m (2015: 19.5m). 22 WYG plc Half Year Report 2016

25 GETAM We have been appointed to this two-year project to develop common product processes and infrastructure among SMEs and entrepreneurs working primarily in Turkey s leather, jewellery and electronic components markets 23

26 FINANCIAL STATEMENTS 24 WYG plc Half Year Report 2016

27 Unaudited consolidated income statement For the six months ended 30 September 2016 Six months ended 30 September 2016 Six months ended 30 September 2015 Year ended 31 March 2016 Audited Notes Continuing operations Revenue including share of joint venture revenues 73,456 62, ,482 Less share of joint venture revenues (513) (312) (665) Revenue 5 72,943 62, ,817 Operating expenses (72,037) (60,150) (130,377) Share of result of joint ventures 72 2 (17) Operating profit* 978 2,129 2,423 Finance costs 6 (220) (68) (201) Profit before tax 758 2,061 2,222 Tax Profit for the period 758 2,194 2,830 Profit attributable to: Owners of the parent 758 2,206 2,832 Non controlling interests - (12) (2) 758 2,194 2,830 Earnings per share 8 Basic 1.1p 3.1p 4.0p Diluted 1.0p 3.1p 3.9p *Operating profit includes a number of items that are separately disclosed in note 4. The accompanying notes to the Half Year Report are an integral part of this consolidated income statement. 25

28 Unaudited consolidated statement of comprehensive income For the six months ended 30 September 2016 Six months ended 30 September 2016 Six months ended 30 September 2015 Year to 31 March 2016 Profit for the period 758 2,194 2,830 Other comprehensive income: Currency translation differences 962 (100) (195) Tax on items taken directly to equity - - (572) Impact of defined pension asset ceiling* - (459) 2,060 Remeasurement of net defined pension liability* Other comprehensive income for the period ,138 Total comprehensive income for the period 1,720 2,561 4,968 Total comprehensive income attributable to: Owners of the parent 1,720 2,573 4,970 Non controlling interests - (12) (2) 1,720 2,561 4,968 *These items will not be reclassified subsequently to profit or loss. 26 WYG plc Half Year Report 2016

29 Unaudited consolidated balance sheet As at 30 September 2016 As at 30 September 2016 As at 30 September 2015 As at 31 March 2016 Notes Non-current assets Goodwill 18,193 14,523 18,193 Other intangible assets 10 8,312 5,077 9,295 Property, plant and equipment 10 3,505 2,640 3,181 Investments in Joint Ventures Deferred tax assets 1, ,224 31,816 23,085 32,300 Current assets Work in progress 31,916 26,248 30,372 Trade and other receivables 28,796 19,176 22,842 Tax recoverable Retirement benefit asset Cash and cash equivalents 7,613 7,947 8,231 68,625 53,438 62,451 Current liabilities Trade and other payables (46,882) (33,860) (46,682) Current tax liabilities (1,613) (530) (931) Financial liabilities 11 (7,500) (4,500) (3,050) (55,995) (38,890) (50,663) Net current assets 12,630 14,548 11,788 Non-current liabilities Financial liabilities 11 (5,000) (514) (5,000) Retirement benefit obligation (2,225) (2,567) (2,356) Deferred tax liabilities (2,282) (1,250) (2,511) Provisions, liabilities and other charges (5,204) (7,490) (5,940) (14,711) (11,821) (15,807) Net assets 29,735 25,812 28,281 Equity attributable to the owners of the parent Share capital Hedging and translation reserve 1, Retained earnings 28,315 25,108 27,791 29,735 25,660 28,249 Non controlling interest Total equity 29,735 25,812 28,

30 Unaudited consolidated statement of changes in shareholders equity For the six months ended 30 September 2015 Share capital Ttranslation reserve Retained earnings Total Non controlling interest Total equity Balance as at 1 April ,730 22, ,546 Profit/(Loss) for the period - - 2,206 2,206 (12) 2,194 Other comprehensive (expense)/income: Currency translation differences - (100) - (100) - (100) Impact of defined pension asset ceiling - - (459) (459) - (459) Remeasurement of net defined benefit pension liability Other comprehensive (expense)/income for the period - (100) Total comprehensive (expense)/income for the period - (100) 2,673 2,573 (12) 2,561 Share based payments - - 1,184 1,184-1,184 Dividend payable - - (479) (479) - (479) Balance at 30 September ,108 25, , WYG plc Half Year Report 2016

31 Unaudited consolidated statement of changes in shareholders equity (continued) For the six months ended 31 March 2016 Share capital Ttranslation reserve Retained earnings Total Non controlling interest Total equity Balance as at 1 October ,108 25, ,812 Profit for the period Other comprehensive (expense)/income: Currency translation differences - (95) - (95) - (95) Tax on items taken directly to equity - - (572) (572) - (572) Impact of defined pension asset ceiling - - 2,519 2,519-2,519 Remeasurement of net defined benefit pension liability - - (81) (81) - (81) Other comprehensive (expense)/income for the period - (95) 1,866 1,771-1,771 Total comprehensive (expense)/income for the period - (95) 2,492 2, ,407 Share based payments Purchase of treasury shares Dividends - - (342) (342) - (342) Reduction in minority shareholding (130) - Balance at 31 March ,791 28, ,281 For the six months ended 30 September 2016 Balance as at 1 April ,791 28, ,281 Profit for the period Other comprehensive income: Currency translation differences Other comprehensive income for the period Total comprehensive income for the period ,720-1,720 Share based payments Dividends - - (684) (684) - (684) Reduction in minority shareholding (32) - Balance at 30 September ,347 28,315 29,735-29,

32 Unaudited consolidated cash flow statement For the six months ended 30 September 2016 Six months ended 30 September 2016 Six months ended 30 September 2015 Year ended 31 March 2016 Notes Operating activities Cash used in operations 12 (1,981) (5,102) (966) Interest paid (199) (1) (180) Tax paid (463) (185) (321) Net cash used in operating activities (2,643) (5,288) (1,467) Investing activities Purchases of property, plant and equipment (1,157) (956) (2,092) Purchases of intangible assets (computer software) (197) (186) (385) Purchase of business (net of cash acquired) (723) (2,511) (7,875) Net cash used in investing activities (2,077) (3,653) (10,352) Financing activities Proceeds on issue of shares Drawdown of loan 4,500 4,500 8,000 Dividends paid to company shareholders (684) - (821) Net cash generated from financing activities 3,816 4,500 7,180 Net decrease in cash and cash equivalents (904) (4,441) (4,639) Cash and cash equivalents at beginning of period 8,231 12,324 12,324 Effects of foreign exchange rates on cash and cash equivalents Cash and cash equivalents at end of period 7,613 7,947 8, WYG plc Half Year Report 2016

33 NOTES TO THE UNAUDITED HALF YEAR REPORT 1. Company Details WYG plc is incorporated in the United Kingdom under the Companies Act and is registered in England & Wales with registered number The address of its registered office is Arndale Court, Otley Road, Headingley, Leeds LS6 2UJ. The Company s ordinary shares are traded on AIM, a market operated by the London Stock Exchange plc. The principal activity of the Group in the period under review was that of international multi-skilled consultant. The Group s revenue derives mainly from activities in the UK, Eastern Europe and Middle East & North Africa. 3. Accounting Policies The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 March 2016, as described in those annual financial statements. Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected annual earnings. 2. Basis Of Preparation This condensed consolidated interim financial information for the six months ended 30 September 2016 should be read in conjunction with the financial statements for the period ended 31 March 2016, which are available on the Company s website at and have been prepared in accordance with IFRSs as adopted by the European Union. While the financial figures included in this half-yearly report have been computed in accordance with IFRSs are applicable to interim periods, this half-yearly report does not contain sufficient information to constitute an interim financial report as that term is defined in IAS 34. This condensed consolidated interim financial information was approved for issue on 1 December This condensed consolidated interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act Statutory accounts for the year ended 31 March 2016 were approved by the Board of Directors on 7 June 2016 and delivered to the Registrar of Companies. The report of the auditor on those accounts was unqualified and did not contain any statement under Section 498 of the Companies Act The condensed consolidated interim financial information has neither been reviewed nor audited. 31

34 4. Detailed consolidated income statement Revenue including share of joint venture revenues Operating profit/(loss) Profilt/(loss) before tax For the six months ending 30 September 2016 Before separately disclosed items 73,456 2,820 2,600 Separately disclosed items - (1,842) (1,842) Total 73, For the six months ending 30 September 2015 Before separately disclosed items 62,589 2,228 2,160 Separately disclosed items - (99) (99) Total 62,589 2,129 2,061 For the year ending 31 March 2016 Before separately disclosed items 133,482 7,221 7,020 Separately disclosed items - (4,798) (4,798) Total 133,482 2,423 2, WYG plc Half Year Report 2016

35 Details of separately disclosed items Six months ended 30 September 2016 Six months ended 30 September 2015 Year ended 31 March 2016 Share option costs (317) (735) (1,475) Amortisation of acquired intangible assets (973) (630) (1,533) Other (costs)/credits (552) 1,266 (1,790) Separately disclosed items (1,842) (99) (4,798) The Group has incurred a number of items in the period and in the prior year, whose significance is sufficient to warrant separate disclosure. The key elements included within separately disclosed items are: Period charge in relation to share option costs Period charge for the amortisation of acquired intangibles Items included in other (costs)/credits relate to restructuring costs. The prior period also includes a credit relating to the legal settlement of the 1986 pension scheme, the release of surplus vacant leasehold provisions and costs in relation to the bank refinancing. 33

36 5. Segmental information IFRS 8 requires segment reporting to be based on the internal financial information reported to the chief operating decision maker. The Group s chief operating decision maker is deemed to be the executive management team comprising the Chief Executive Officer and the Chief Financial Officer. Its primary responsibility is to manage the Group s day to day operations and analyse trading performance. The Group s segments are detailed below and are those segments reported in the Group s management accounts used by the executive management team as the primary means for analysing trading performance. The Executive team assesses profit performance using operating profit measured on a basis consistent with the disclosure in the Group accounts. The Group s operations are managed and reported by key market segments as follows: UK EAA (Europe, Africa and Asia) MENA (Middle East & North Africa including Turkey). The segmental results for the six months ended 30 September 2016 are as follows: UK EAA MENA Group Revenues including share of joint venture revenues 53,572 9,694 10,190 73,456 Less share of joint venture revenues - (513) - (513) 53,572 9,181 10,190 72,943 Result Operating profit before central overheads and separately disclosed items 4, ,981 Central overheads (2,161) Operating profit before separately disclosed items 2,820 Separately disclosed items (Note 4) (1,842) Operating profit 978 Finance costs (220) Profit before tax 758 Tax - Profit for the period 758 Profit attributable to the owners of the parent 758 Profit attributable to non-controlling interests - 34 WYG plc Half Year Report 2016

37 5. Segmental information (continued) The segmental results for the six months ended 30 September 2015 are as follows: UK EAA MENA Group Revenues including share of joint venture revenues 46,185 10,899 5,505 62,589 Less share of joint venture revenues - (312) - (312) Result 46,185 10,587 5,505 62,277 Operating profit/(loss) excluding central overheads and separately disclosed items 4,518 (5) (179) 4,334 Central overheads (2,106) Operating profit before separately disclosed items 2,228 Separately disclosed items (Note 4) (99) Operating loss 2,129 Finance costs (68) Profit before tax 2,061 Tax 133 Profit attributable to equity shareholders 2,194 Profit attributable to the owners of the parent 2,206 Loss attributable to non controlling interests (12) 35

38 6. Finance costs Six months ended 30 September 2016 Six months ended 30 September 2015 Year ended 31 March 2016 Interest on bank loans, guarantees, bonds and overdrafts Interest related to defined benefit scheme Total finance costs Tax The tax charge for the period has been calculated by applying the Directors best estimate of the effective tax rate for the year with consideration to the geographic location of the profits, to the profit before tax for the period. 36 WYG plc Half Year Report 2016

39 8. Earnings per share The calculation of the basic and diluted earnings per share is based on the following data: Six months ended 30 September 2016 Six months ended 30 September 2015 Year ended 31 March 2016 Earnings for the purposes of basic and diluted earnings per share being profit for the year 758 2,206 2,832 Adjustment relating to separately disclosed items (see note 4) 1, ,798 Tax impact of separately disclosed items - - (599) Earnings for the purposes of basic and diluted adjusted earnings per share 2,600 2,305 7,031 Six months ended 30 September 2016 Number Six months ended 30 September 2015 Number Year ended 31 March 2016 Number Number of shares Weighted average number of shares for basic earnings per share 70,638,773 70,688,773 70,638,773 Effect of dilutive potential ordinary shares: Share options 3,099,555-1,317,148 Weighted average number of shares for diluted earnings per share 73,738,328 70,688,773 71,955,921 Earnings/(loss) per share Basic 1.1p 3.1p 4.0p Diluted 1.0p 3.1p 3.9p Adjusted earnings per share Basic 3.7p 3.3p 10.0p Diluted 3.5p 3.3p 9.8p The adjusted earnings per share is calculated after excluding separately disclosed items. This more accurately reflects the underlying performance of the Group. 37

40 9. Dividends The interim dividend of 0.6p per share (2015: 0.5p per share) was approved on 1 December 2016 and as such has not been included as a liability in these financial statements. The final dividend of 1.0p per share for the year ended 31 March 2016 was approved by the shareholders at the Annual General Meeting on 22 September 2016 and was paid on 28 September This was not recognised in the financial statements for the year ended 31 March Property, plant and equipment and intangible assets Property, plant and equipment Intangible assets Six months ended 30 September 2015 Opening net book amount as at 1 April ,307 4,836 Additions Arising on acquisition of business Depreciation and amortisation (621) (858) Exchange differences (2) 4 Closing net book amount as at 30 September ,640 5,077 Six months ended 30 September 2016 Opening net book amount as at 1 April ,181 9,295 Additions 1, Depreciation and amortisation (857) (1,185) Exchange differences 24 5 Closing net book amount as at 30 September ,505 8, WYG plc Half Year Report 2016

41 11. Financial liabilities 30 September September March 2016 Current Bank loans and overdrafts (all payable on demand) 7,500 4,500 3,000 Redemption liability ,500 4,500 3,050 Non-current Bank loans 5,000-5,000 Redemption liability , ,000 Financial liabilities are repayable as follows: On demand or within one year 7,500 4,500 3,050 Greater than one year 5, ,000 12,500 5,014 8,050 The redemption liability (the fair value of an option to purchase the remaining 5% of Arndale 22 Limited) was settled in the period. 39

42 12. Cash Used in operations Six months ended 30 September 2016 Six months ended 30 September 2015 Year ended 31 March 2016 Profit from operations 978 2,129 2,423 Adjustments for: Depreciation of property, plant and equipment ,362 Amortisation of intangible assets 1, ,979 Loss on disposal of property, plant and equipment Share options expense ,475 Operating cash flows before movements in working capital 3,337 4,343 7,297 Increase in work in progress (1,545) (5,073) (7,508) (Increase)/decrease in receivables (5,954) 2, Increase/(decrease) in payables 2,181 (6,519) (1,120) Cash used in operations (1,981) (5,102) (966) 40 WYG plc Half Year Report 2016

43 13. Analysis of net cash/(debt) At 1 April 2015 Cash flows Other non-cash items At 30 September 2015 Cash and cash equivalents 12,324 (4,441) 64 7,947 Bank loans and overdrafts - (4,500) - (4,500) Net cash 12,324 (8,941) 64 3,447 At 1 April 2016 Cash flows Other non-cash items At 30 September 2016 Cash and cash equivalents 8,231 (904) 286 7,613 Bank loans and overdrafts (8,000) (4,500) - (12,500) Net cash/(debt) 231 (5,404) 286 (4,887) Restricted cash relates to restricted access accounts in WYG International Limited. Other non-cash movements represent currency exchange differences. 14. Related party transactions There have been no changes in the nature of related party transactions as described in the 2016 Annual Report and Accounts and there have been no new related party transactions which have had a material effect on the financial position or performance of the Group in the period ended 30 September Availability of the Half Year Report Copies of the Half Year Report can be obtained from the Company s registered office at Arndale Court, Otley Road, Headingley, Leeds LS6 2UJ, and on the Company s website:

44 WYG plc Arndale Court Otley Road Headingley Leeds LS6 2UJ T: F: E: W: P-0215/12/16