25 August 2017 – trading update
Shares in the global consultancy group WYG have fallen sharply on the news that profits in the current financial year will be significantly lower than previously expected. Although group revenues are expected to increase, a number of factors have impacted on profitability- these include delays on the start of some international projects, lower profits on some consultancy contracts and poor trading in the Planning and Transport Planning businesses. The real estate business acquired in October 2015 has also performed below budget whilst poor trading conditions in Poland mean that business will also fail to meet targets. Although the second half of the financial year to 31 March is likely to see some improvement it will not be enough to make up for the first half shortfall and pre-tax profits are now likely to be in the order of £6.5m for the current financial year as against forecasts of £10.7m. Earnings per share are likely to be around 8p. Superficially this makes the shares look cheap but investors may want to see some evidence of recovery before buying in. However, the scope for recovery is such that we rate the shares a SPECULATIVE BUY.