WYG hit by contract delays and £4m restructuring costs

Project delays caused by the General Election contributed to a fall in pre-tax profits at consultant WYG as the firm was forced to rebalance the business after gearing up for a UK work surge.

Group pre-tax profit slipped from 2.2m to £1.6m in the year to March after also booking £4m costs associated with restructuring the business in line with the strategic growth plan and the closure of certain Polish operations.

Strong growth in last year’s order book was converted into a 14% revenue rise to £152m. However, margins slipped chiefly as a result of having geared up to deliver several major programmes of work that were expected to commence in the last four months of the year but were then delayed.

Paul Hamer, chief executive officer of WYG, said that frustratingly, it was WYG’s higher margin service lines that saw the greatest incidence of project delays.

Although the business acted quickly to reduce costs and overheads, and defer some planned investments in the final quarter, it proved impossible to make up the lost ground by the year end. 

Hamer said: “Despite a temporary curtailment in the process of formalising some contractual commitments as a result of the UK General Election, we have started the current year well having already won a significant contract in Africa and places on two major UK frameworks. 

“The opportunities we are seeing in our core consultancy services and international development markets, combined with our initiatives to drive efficiency and resilience across the group, leave us in a strong position from which to deliver good growth in the current year.” 

Cost reduction initiatives in the UK business were re-invested to enhance delivery without reducing capacity.

Both UK and international operations, which operate in related technical services fields, have now been brought together to create one consultancy services business stream.

This is being headed by newly appointed Jeanne ‘JC’ Townend,  an American-born growth and leadership strategy expert who has brought 25 years’ international experience managing major consultancies to the new role.

The other principal business stream, International Development, is being led by  recently-appointed Jesper Damgaard. He is a Danish national who has worked across Europe, UAE, Middle East and Asia Pacific.

from Construction Enquirer http://www.constructionenquirer.com/2017/06/06/wyg-hit-by-contract-delays-and-4m-restructuring-costs/

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