In the last year, WYG Plc (L:WYGR) has completed a strategic review, put a new incentive scheme in place and refreshed the board composition. This has not distracted from the ongoing delivery of profit progress. In H116, UK operations moved strongly ahead and the order position both here and in international regions is improving. Hence, medium-term prospects appear to be encouraging and translating them into results that allow a narrowing of the gap between market estimates and management aspirations is likely to be an important determinant of share price performance.
Strong UK performance drives H116 progress
First half results were mixed, comprising a very strong UK uplift, partly offset by weaker contributions from the two international regions reflecting near term funding inertia as previously flagged. These respective movements demonstrate both positive operational gearing effects in the UK and the flexible cost model overseas, which cushions the impact of short-term revenue dips on profitability. At group level, WYG delivered a c 15% increase in adjusted PBT to £2.2m, with FD EPS of 3.3p c 24% higher (including a larger tax credit y-o-y) and DPS of 0.5p, +67% (six times covered) on broadly comparable revenue to H115. H116 investment in working capital and acquisitions contributed to a c £9m reduction in net cash to £3.4m.
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