Who we are Consultancy Services International Development Creating value from and managing strategic Undertaking ambitious long term international assets by engaging with clients in the early stages development projects that make a positive impact of a project, and often continuing to advise them on infrastructure, socio-economic growth and throughout its lifecycle the environment Create value, protect value, manage risk 1
Highlights Group Revenue * Profit before tax ** Order book Earnings per £73.5m £2.6m £163.7m share** 3.7p + 17% + 20% + 33% +12% 2015: £62.6m 2015: £2.2m 2015: £123.4m; March 2016 £150m 2015: 3.3p Interim dividend 0.6p No material impact Strong order book from Brexit – our + 20% New strategic business model is supporting growth plan being significant revenue robust and agile. finalised (2015: 0.5p) growth Good pipeline of EU opportunities * Including revenue from Joint Ventures ** Before separately disclosed items 2
Consolidated income statement 6 months to 6 months to Sept 2016 Sept 2015 £m £m Revenue* 73.5 62.6 Operating profit** 2.8 2.2 Finance costs (0.2) (0.1) Profit before tax** 2.6 2.1 Tax - 0.1 Profit after tax** 2.6 2.2 Adjusted diluted earnings per share** 3.5p 3.3p Interim dividend per share 0.6p 0.5p • Revenue significantly ahead of H1 2015 – strong growth in UK and MENA; £3m from acquisitions • 27% increase in Operating profit • 20% increase in Profit before tax • Adjusted diluted EPS based on 74m shares • Interim dividend increased by 20% * Including share of Joint Venture revenues ** Before separately disclosed items 3
Consolidated balance sheet 30 Sep 2016 30 Sep 2015 £m £m Goodwill 14.5 18.2 Fixed assets 7.7 11.8 Debtors & WIP less FIA 47.3 37.6 Creditors (27.3) (35.3) Legacy provisions (inc. Pensions) (10.1) (7.4) Total net cash (4.9) 3.4 Shareholders’ funds 25.8 29.7 • Increase in Working Capital driven by growth in revenue, global price contracts, impact of acquisitions and strengthening of Euro • Legacy provisions continue to reduce as exposure to vacant properties unwind and pension exposure removed • Cash impacted by investment in acquisitions, legacy cash costs and dividend 4
Consolidated cash flow statement 12 months version 12 months to 12 months to Change September 2016 September 2015 £m £m £m 7.8 6.0 Operating profit (before separately disclosed items) Depreciation and amortisation 2.0 1.7 Movement in working capital (2.2) (3.1) Operating Cash flow 7.6 4.6 3.0 Interest and tax (1.0) (0.5) Capex (2.6) (1.7) Cash flow before legacy issues & acquisitions 4.0 2.4 1.6 (2.9) (3.4) Legacy cash costs (1.7) 0.8 Cash impact of separately disclosed items (0.6) (0.2) (0.4) Cash flow before acquisitions & dividends (6.2) (2.5) Acquisitions and disposals (1.5) (2.3) Dividends & share related transactions Net cash flow (8.3) (5.0) (3.3) Improvement in operating cash flows driven by: • - Strong development in operating profit - Controlled investment in working capital in line with growth in revenues • Low levels of interest and tax • Reduced legacy cash cost as exposures unwind • Further reductions in working capital post September as Turkish global price contracts start to unwind 5
Guidance Revenue trend Continued growth in revenues supported by very strong order book Operational gearing and focus on quality revenues should continue to Operating margin improve underlying margins by c.1-2% despite increase in operating costs to support growth Separately disclosed Further costs related to implementation of five year plan expected in H2 items Some increase expected as we utilise our new facilities to Interest costs support growth Tax c.10% expected with ongoing benefit of UK tax losses Similar level to H1 expected, as we continue to invest in our infrastructure Capex of office accommodation and IT 95 days at 30 September 2016; expected to reduce to less than 80 days Debtor & WIP days by 31 March 2017 Deferred consideration on acquisitions expected to be in the region of Deferred consideration £3m in FY 17 We expect to show strong operating cash flows in H2, targeting minimal Cash flows net debt at year end 6
UK – strong growth in revenue, order book and investing for growth £’m 2016 2015 • 73% of Group Revenue • Sustained growth despite general Revenue 53.6 46.2 market uncertainties Operating profit* 4.6 4.5 • Investing in our people, technology and Operating margin* 8.5% 9.8% infrastructure to support future growth in H2 and beyond • Future growth underpinned - >30% growth in order book (c£80m) • Long term demand in core markets: – Major infrastructure / Energy – Defence and Security – Residential and retail – Strategic Asset Management Sigma Housing – Employers agent and quantity surveying services on an intensive programme to ensure the delivery of over 900 private rental sector homes for regeneration specialist Sigma Inpartnership, meeting a key objective of the Northern Powerhouse agenda. * Before separately disclosed items 7
EAA – EU budget delays reversing in H2; strong International Development growth in Africa • 13% of Group Revenue £’m 2016 2015 • Maintained trading result despite project Revenue** 9.7 10.9 delays holding back revenues in H1 Operating profit* - - • Robust operating model negates Brexit impact Operating margin* - - • Europe – Maintained our market leading position in managing EU funds both for EU Accession and Local Country Development • Secured €13.1m IPF5 Programme • Delivered significant success in Poland and Croatia on new ESF-funded projects • Africa and Asia – Further expansion supporting UK MOD across fragile states – Growing success with DfID / FCO – Africa No 1 for development and trade aid Polish Government initiative to help the unemployed – This – Major EU opportunities relating to migration contract is being delivered over a series of planned actions, supporting and climate change the Silesian Labour Office, in eight districts of this industrial region. It involves us providing short term training and initial assistance to the unemployed. * Before separately disclosed items ** Including share of Joint Venture revenues 8
MENA – accelerating revenues and excellent order book growth • 14% of Group Revenue £’m 2016 2015 • Maintained EU-market leading position in Revenue 10.2 5.5 Turkey Operating profit* 0.4 (0.2) • Revenue up 85% to £10.2m and profit growth Operating margin* 4.0% (3.2)% • Order book cover FY2017 at 100% • Turkey – Business environment stable and functioning as usual – New IPA II programme on-stream with significant opportunities identified through to 2023 – Further growth across technical services in Water and Environment sector • MENA – Growing our position with UK government agencies in Bahrain and Middle East GETAM – we have been appointed to this two year project to – Positioned on all major UK HMG frameworks develop common product processes and infrastructure among SMEs – New EU opportunities Jordan / Lebanon and entrepreneurs working primarily in Turkey's leather, jewellery and electronic components markets. * Before separately disclosed items 9
Contracted order book summary For delivery in current year Beyond current year £’m 30 Sep 2016 30 Sep 2015 30 Sep 2016 30 Sep 2015 UK 35 29 45 32 EAA 16 12 44 31 MENA 9 5 14 14 A strong underpin to H2 and good foundation for FY18 10
Shaping WYG for the Future • Strategy to grow by developing and serving the markets for our consultancy and international development expertise through both organic investment and selective acquisition • Finalising a new strategic growth plan to consolidate our position as a trusted adviser whilst ensuring maximum efficiency, agility and resilience • Harnessing our specialist skills to generate and respond to opportunities presented by clients’ needs to navigate an uncertain and dynamic global market and political environment Addressing key, long term challenges Major Climate Water Infrastructure Adaptation Management Projects Energy Mass UK Housing Planning Migration Shortfall 11
Conclusion and outlook • Strong set of results – with accelerated growth momentum • High order book coverage creates confidence for the full year and beyond • Investing in and securing growth in the out-years • Further positive opportunities arising from UK government spending reviews • Opportunities continue to flow from EU funds • Positive impact of emerging new strategic growth plan – Keener focus on markets and funding routes – Streamlining to create more resilient and competitive business – More agile and responsive business – mobilised to thrive in uncertain markets and environments 12
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Shareholders % Cumulative % Slater Investments 13.9 13.9 Hargreave Hale 11.7 25.6 Robert Keith 10.5 36.1 Franklin Templeton Fund Management 9.8 45.9 Henderson Global Investors 8.7 54.6 River and Mercantile Asset Management 6.8 61.4 Majedie Asset Management 6.6 68.0 Miton Asset Management 5.6 73.6 AXA Framlington Investment Managers 4.0 77.6 UBS (as principal) 3.1 80.7 Directors 1.3 82.0 Others 18.0 100.0 100.0 14
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