The FY16 update contained a bullish tone based on order book development and we increased estimates for both FY17 and FY18. This impression was reinforced at the company’s recent capital markets event, which explained the rising international opportunities for WYG Plc (LON:WYGR). We expect momentum here to be a key highlight in the FY16 results announcement, which is scheduled for 7 June.
Divisional performance set to move forward together
In recent years, WYG’s UK and international operations have tended to see diverging performances. Overseas profitability was stronger in the early stages of rebuilding UK earnings, while strong UK growth more recently has been partly diluted by lower contributions from the Europe, Africa and Asia (EAA) and Middle East, North Africa (MENA) regions. We believe that the latter effect has run its course as key funding sources are clearly becoming more active in awarding contracts. While the UK and overseas business models differ and are subject to different demand drivers, we now expect all three regions to move forward from FY17 onwards and this is reflected in increased estimates following the FY16 year-end update.
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