FY17 results were broadly in line with year-end guidance. UK activity is increasing but, for now, we have reduced its expected contribution to our estimates. Organisational change under an updated strategy should improve the quality of earnings and, following Paul Hamer’s departure, a new management team is in place to execute this. Earnings growth prospects are somewhat greater than the current rating appears to suggest.
Good progress despite regional variation
Overall, WYG Plc (LON:WYGR) delivered a c 14% revenue uplift and a c 21% increase in EBIT in FY17, which represented good progress, though below best expectations earlier in the year. Against our estimates, profitability came in slightly below our reset expectations, and EPS slightly higher due to tax credits. The major themes were covered in the year end update with a very strong trading performance in the MENA region and further progress in the Western Balkans (part of EAA) being partly diluted by slower development of UK project work in Q4 and a restructuring in Poland. WYG ended FY17 with modest gearing (c 0.2x EBITDA) substantially reflecting deferred consideration payments on prior year acquisitions.
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