25 February 2010
Only seven weeks after shareholders voted through a refinancing agreement to secure WYG’s future, the company has today announced a £3.5m operating profit in its half year results.
Overall WYG’s performance in the first half of the financial year has been in line with the Board’s expectations with relatively strong trading internationally seeing a five-fold increase on the same period last year. Domestically business has performed slightly below expectations.
During the six months to 31 December 2009, WYG made significant progress in the implementation of the company’s three-part strategy. In particular, the consultancy agreed terms for the refinancing of its bank facilities combined with a broader restructuring of the capital structure. These terms were approved by shareholders at the Extraordinary General Meeting on 6 January 2010 and the restructuring was completed on 8 January 2010. Subsequently the ordinary shares were admitted to trading on AIM.
Paul Hamer, Chief Executive, WYG Group, said: “The restructuring has created a strengthened and more appropriate capital structure as a platform upon which to build a sustainable, strong and resilient business that is better positioned to compete more effectively in our chosen markets.
“We have continued to make good progress in our recovery programme during the period. Trading conditions were and remain generally challenging but we now have the financial platform on which to develop for the future. Overall our trading during the period has been, and remains, in line with the Board’s expectations,” he added.
WYG continues to take steps to create a fit for purpose business. This has necessarily involved further restructuring, albeit on a smaller scale than in the financial year ended 30 June 2009. Good progress has been made in expanding WYG’s international operations to create further diversification of its revenue streams.
The progress in implementing the Group’s strategy has been made against a backdrop of continuing challenging business conditions, particularly in the Republic of Ireland, but also in the United Kingdom
Paul added: “The Board remains focused on the successful implementation of our three-part strategy and is grateful for the support and commitment shown by our stakeholders and employees during these challenging times.”
Financial results summary:
In the six months to December 2009, gross revenue reduced by 20% to £115.2m (2008: £144.5m). Net revenue attributable to in-house services (after deducting revenue attributable to third parties on which the Group does not make a margin) decreased by 19% to £100.2m (2008: £123.4m).
Operating profit before exceptional and other items, which include amortisation of acquired intangibles and exceptional items, decreased by 71% to £3.5m (2008: £12.1m). Operating profit margin on net revenue fell to 3.4% (2008: 9.8%) reflecting both the market conditions and the restructuring process. Profit before tax and other items was £1.6m (2008: £9.0m). On a statutory basis the Group made a loss before tax of £4.6m (2008: loss of £2.1m), reflecting the impact of the exceptional and other items in the period.