Who we are Consultancy Services International Development Creating - - PowerPoint PPT Presentation

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Who we are

Consultancy Services

Creating value from and managing strategic assets by engaging with clients in the early stages

• f a project, and often continuing to advise them

throughout its lifecycle

International Development

Undertaking ambitious long term international development projects that make a positive impact

• n infrastructure, socio-economic growth and

the environment

Create value, protect value, manage risk

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Highlights

Group Revenue *

£73.5m

+ 17%

2015: £62.6m

Profit before tax**

£2.6m

+ 20%

2015: £2.2m

Order book

£163.7m

+ 33%

2015: £123.4m; March 2016 £150m

Earnings per share**

3.7p

+12%

2015: 3.3p

Interim dividend

0.6p

+ 20%

(2015: 0.5p)

* Including revenue from Joint Ventures ** Before separately disclosed items

Strong order book supporting significant revenue growth New strategic growth plan being finalised No material impact from Brexit – our business model is robust and agile. Good pipeline of EU

• pportunities

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6 months to Sept 2016 £m 6 months to Sept 2015 £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

Consolidated income statement

• 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

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30 Sep 2016 £m 30 Sep 2015 £m Goodwill 18.2 14.5 Fixed assets 11.8 7.7 Debtors & WIP less FIA 47.3 37.6 Creditors (35.3) (27.3) Legacy provisions (inc. Pensions) (7.4) (10.1) Total net cash (4.9) 3.4 Shareholders’ funds 29.7 25.8

Consolidated balance sheet

• 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

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12 months to September 2016 £m 12 months to September 2015 £m Change £m Operating profit (before separately disclosed items) 7.8 6.0 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 Legacy cash costs (2.9) (3.4) Cash impact of separately disclosed items (1.7) 0.8 Cash flow before acquisitions & dividends (0.6) (0.2) (0.4) Acquisitions and disposals (6.2) (2.5) Dividends & share related transactions (1.5) (2.3) 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

Consolidated cash flow statement 12 months version

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Guidance

Operating margin

Operational gearing and focus on quality revenues should continue to improve underlying margins by c.1-2% despite increase in operating costs to support growth

Separately disclosed items

Further costs related to implementation of five year plan expected in H2

Interest costs

Some increase expected as we utilise our new facilities to support growth

Tax

c.10% expected with ongoing benefit of UK tax losses

Capex

Similar level to H1 expected, as we continue to invest in our infrastructure

• f office accommodation and IT

Debtor & WIP days

95 days at 30 September 2016; expected to reduce to less than 80 days by 31 March 2017

Deferred consideration

Deferred consideration on acquisitions expected to be in the region of £3m in FY 17 Continued growth in revenues supported by very strong order book

Revenue trend Cash flows

We expect to show strong operating cash flows in H2, targeting minimal net debt at year end

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UK – strong growth in revenue, order book and investing

for growth

• 73% of Group Revenue
• Sustained growth despite general

market uncertainties

• Investing in our people, technology and

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 £’m 2016 2015 Revenue 53.6 46.2 Operating profit* 4.6 4.5 Operating margin* 8.5% 9.8%

Sigma Housing – Employers agent and quantity surveying services

• n 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

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EAA – EU budget delays reversing in H2; strong

International Development growth in Africa

• 13% of Group Revenue
• Maintained trading result despite project

delays holding back revenues in H1

• Robust operating model negates Brexit

impact

• 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 – Major EU opportunities relating to migration and climate change £’m 2016 2015 Revenue** 9.7 10.9 Operating profit*

• Operating margin*
• Polish Government initiative to help the unemployed – This

contract is being delivered over 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 initial assistance to the unemployed.

* Before separately disclosed items ** Including share of Joint Venture revenues

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MENA – accelerating revenues and excellent order

book growth

• 14% of Group Revenue
• Maintained EU-market leading position in

Turkey

• Revenue up 85% to £10.2m and profit

growth

• 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 – Positioned on all major UK HMG frameworks – New EU opportunities Jordan / Lebanon £’m 2016 2015 Revenue 10.2 5.5 Operating profit* 0.4 (0.2) Operating margin* 4.0% (3.2)%

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.

* Before separately disclosed items

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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

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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

Water Management Mass Migration Major Infrastructure Projects Climate Adaptation Energy Planning UK Housing Shortfall

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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

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Shareholders

% Slater Investments 13.9 Hargreave Hale 11.7 Robert Keith 10.5 Franklin Templeton Fund Management 9.8 Henderson Global Investors 8.7 River and Mercantile Asset Management 6.8 Majedie Asset Management 6.6 Miton Asset Management 5.6 AXA Framlington Investment Managers 4.0 UBS (as principal) 3.1 Directors 1.3 Others 18.0 100.0 Cumulative % 13.9 25.6 36.1 45.9 54.6 61.4 68.0 73.6 77.6 80.7 82.0 100.0

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The team

Paul Hamer, Chief Executive Officer

Appointed Chief Executive in March 2009 Previously Managing Director of VT Nuclear Services, part of Babcock International, and brings with him over 20 years’ experience in business management, leadership and project delivery. Held several senior executive positions in the contracting, nuclear, oil, chemical and petrochemical sectors. Chairman of Green Economy Panel, Leeds City Region LEP

Iain Clarkson, Chief Financial Officer

Joined WYG in June 2016 Formerly Finance Director of AMEC Foster Wheeler’s Clean Energy Europe business. 25 years’ experience of financial and commercial management, primarily in the energy sector.

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Management incentive schemes

Original Scheme - Transformation Incentive Plan (TIP)

• Put in place as part of 2011 refinancing
• Scheme closed in 2015 with 12.2m options surrendered equivalent to 17.9% of issued share capital
• 3.8m options outstanding; all price targets now met

New Remuneration Scheme (approved at September 2015 AGM)

Three elements:

a) Short-Term Incentive Plan (STIP)

• Annual bonus scheme for most senior executives comprising cash, deferred cash and shares
• Stretching PBT and cash targets – delivered 14% for FY2016

b) Performance Share Plan (PSP)

• Senior executives and leadership team
• 3 years EPS and TSR targets split 50:50
• At the end of Year 1 on target to deliver 100% on EPS and 88.5% on TSR

c) Restricted Share Plan (RSP)

• Specific core employees
• Retention incentive: 3 year vesting; no targets save continued employment

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Key financial metrics

Area 2016 2015 Comment Revenue growth +17%

• Strong performance in the UK offset by slower than

anticipated ramp-up of EU funding cycle Profit before tax £2.6m £2.2m 20% increase in PBT, in line with expectations. Reflecting increase in revenues Earnings per share (adjusted and diluted) 3.5p 3.3p 6% growth in diluted EPS, driven by strong profit growth offset by higher number of diluted options Working capital days 95 94 Small increase due to impact on 3 non-standard EU contracts offset by better UK collections 12 month operating cash flow £7.6m £4.6m Improving operating cash flows due to increasing profit and controlled investment in working capital Order book £164m £123m 33% increase in order book reflects strong UK pipeline and recovery in international work

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