TIDMWHY
RNS Number : 6386B
White Young Green PLC
30 October 2009
+--------------------------------------------+--------------------------------------------+
| For immediate release | 30 October 2009 |
+--------------------------------------------+--------------------------------------------+
White Young Green plc
Results for the year ended 30 June 2009 and proposed restructuring and covenant
deferral
White Young Green plc, international multidisciplinary consultant, announces its
results for the year ended 30 June 2009, together with the terms and conditions
of its proposed restructuring.
Operational summary:
* Agreement in principle reached with lenders for a three year
refinancing, subject to legal documentation and shareholder approval
* GBP12m profit before taxation, exceptional and other items
* Committed bond facilities for internationalising White Young Green plc
* Strengthened senior leadership team
* Good progress against implementing our three part strategy
Financial summary:
* Net revenue decreased by 8% to GBP213.9m (2008: GBP232.1m)
* Operating profit before exceptional and other items decreased by 36% to GBP17m
(2008: GBP26.4m)
* Operating loss after exceptional and other items of GBP123.7m (2008: GBP22.2m
profit)
* Exceptional and other items were GBP141m (2008: GBP4.2m)
* Profit before taxation and before exceptional and other items was GBP12.1m
(2008: GBP21m)
* Reported loss before tax of GBP128.9m (2008: profit of GBP16.8m)
* No dividend payment in financial year
* Underlying earnings per share (before exceptional and other items) of 17.6p
(2008: 31.6p)
* Reported loss per share of 246p (2008: earnings of 28.4p)
* Significant reduction in UK and Irish support services markets due to impact of
global recession
* Exceptional and other items represent exceptional costs and the amortisation
of acquired intangibles (customer relationships and order books).
Proposed restructuring:
The Company is pleased to announce the agreement of terms for a proposed capital
restructuring which is subject to legal documentation and shareholder approval.
The proposed restructuring will provide the Group with a strengthened and
sustainable long term capital structure enabling the Company to compete more
effectively in the current challenging environment.
· The heads of terms for the proposed restructuring envisage the Banks
converting approximately GBP50m of the debt owed to them into new ordinary
shares and new preference shares in the Company. The balance of the monies owing
to the Banks will be refinanced by the Banks into term debt facilities and
working capital facilities, including EUR38m of committed bonding facilities, each
with a three-year term.
· On completion of the restructuring, the lenders would own approximately 60.5%
of the enlarged issued ordinary share capital, while a new employee benefit
trust would own approximately 24.5% and existing shareholders approximately 15%.
· As part of the total reduction in borrowings of approximately GBP50m, the
lenders will be issued GBP30m of preference shares for conversion of GBP30m of
outstanding borrowings.
· The proposed restructuring would require shareholder approval at an
extraordinary general meeting, with the lenders having agreed to defer testing
of covenants until after the extraordinary general meeting, or 14 December 2009,
whichever is the earlier.
· The purpose of the new employee benefit trust would be to hold shares for the
purpose of incentivising directors, key managers and employees and to ensure
that the interests of those key employees and shareholders are closely aligned.
· Once finalised, the precise details of the proposed restructuring will be set
out in more detail in a circular, to be sent to shareholders in due course.
· The Directors currently intend, should the restructuring be approved by
shareholders, to cancel the admission of the ordinary shares to the Official
List and to trading on the London Stock Exchanges market for listed securities
and to apply for admission of the ordinary shares to trading on AIM
Commenting on the results and proposed restructuring, Non Executive Chairman
Mike McTighe, said:
"Trading conditions remain challenging, although there are variations across the
differing markets served by the Group. There remains a lack of confidence and
liquidity in many areas in which we trade, but there are also some encouraging
signs in respect of opportunities and new contract wins.
We have reached a constructive outcome with the lenders and we are pleased with
their long term support. Given current market conditions, we recognise that the
proposed financial restructuring is designed to ensure the stability of the
Company. We have restructured operationally to focus on areas of strength and
opportunity to be well positioned to benefit when overall economic conditions
improve. We are investing, and will continue to invest to provide a strong
platform for the future.
With a new leadership team and a restructured balance sheet White Young Green
plc will be putting in place fundamental building blocks to enable the Company
to benefit from profitable opportunities at home and internationally, while
continuing to take a prudent and cautious view of the market. It has been a very
difficult year from which we emerge better prepared to meet the challenges and
address the opportunities of the future."
The White Young Green plc senior management team will provide briefings for
analysts at Buchanan, 45 Moorgate, London EC2Y 9AE during Friday 30 October
2009. Please contact Tim Anderson on 020 7466 5000 for further information.
For further information, please contact:
White Young Green plcTel: 0113 278 7111
Paul Hamer, Chief Executive Officer
David Wilton, Group Finance Director
Buchanan Communications Tel: 020 7466 5000
Tim Anderson / Lisa Baderoon
Chairman's statement
We have been through profound change in the last 12 months which has seen the
company restructure its finances, operations, processes and senior leadership
team to ensure it is focused on building a sustainable, strong and resilient
long-term business that is better positioned to face the opportunities and
challenges ahead. All of this being undertaken against the backdrop of a global
recession.
The support services sector has seen a major decline in valuations, driven by
the dramatic reduction in demand for services across infrastructure, private and
residential investment and major publicly funded schemes. We, like our peers,
have been heavily impacted by this market decline. In particular, the Group's
overexposure and reliance on certain markets in the Republic of Ireland and its
diversified Great Britain Engineering offering has markedly affected trading.
In early 2009 we developed a new strategy for the Group which focuses on
creating a more efficient business structure that is fit for purpose,
internationalising White Young Green plc core capabilities, and creating 'peaks
of excellence' across critical and sustainable sectors.
Significant progress has been made in implementing this strategy although there
remains much still to be done to build a stable operating platform to deliver
predictable and sustainable results for the future and create future value for
our stakeholders.
To create a fit for purpose business, we continue to restructure our business
operations and balance sheet. We have addressed legacy issues and have acted to
strengthen the underlying business infrastructure. During this process we have
incurred very significant exceptional costs relating to redundancies, office
closures, the write down of work in progress and trade receivables balances,
provisions for professional indemnity claims, professional
fees, the impairment of goodwill, and other related costs.
I am delighted to report that we have now signed heads of terms with our
Lenders regarding the terms of a three year financing facility. These heads of
terms are not legally binding but have been approved by the credit committee of
each bank. The level of debt on the balance sheet would be reduced significantly
and the Lenders would subscribe for new ordinary shares and new preference
shares in White Young Green plc. The completion of the proposed restructuring is
conditional, inter alia, upon execution of documentation satisfactory to White
Young Green plc and its Lenders and on the approval of White Young Green plc's
shareholders at an Extraordinary General Meeting. It is expected that a
shareholder circular containing further details of the restructuring and
convening the EGM will be sent to shareholders in due course. Upon completion of
the refinancing the Lenders would in aggregate own approximately 60.5 per cent
of the issued ordinary share capital of White Young Green plc and we expect to
move the company's share listing to the Alternative Investment Market.
All of our stakeholders recognise the importance of our employees and as part of
the refinancing, we propose introducing additional equity incentives for
directors and key employees. The ongoing support of our lenders and shareholders
is welcome and the Board is pleased to have agreed, in principle, a long term
financing facility that would include committed bonding facilities to support
our international operations and that is appropriate for the group as a whole.
During the year White Young Green plc has made progress in diversifying its
geographical presence and has also broadened its international service offering
into core technical areas of expertise including engineering, project
management, and environmental and planning consultancy services. In the last 12
months, we have developed in countries where we already have a strong project
based foothold and reputation with clients. The Company registered and opened a
new office in Kazakhstan and plans for opening an office in Ukraine are
underway. The Middle East and Africa continued to show good growth and a new
office in Pretoria is planned to be followed by one in Cairo in the next 12-18
months.
Despite some challenging issues, our commitment to quality was recognised by the
industry. White Young Green plc were awarded a RoSPA Occupational Health and
Safety Gold Medal Award for 2009 and named Consultant of the Year in the
Contract Journal Construction Industry Awards 2008. We have also picked up
numerous accolades and project awards this year throughout the business
including the Building Awards Housing Project of the Year (Adelaide Wharf),
British Construction Industry Award (BCIA) Best Building Award (The Yellow
Building) and Royal Institute of British Architects (RIBA) Award (Curve Theatre,
Highcross, Pond Meadow, Yellow Building, Tyneside Cinema).
To strengthen the executive team during the financial year, the Board appointed
David Wilton, Group Finance Director and Graham Olver, Group Services Director
and Company Secretary. Lastly, I took over as Non Executive Chairman of White
Young Green plc in August this year.
The Board has concluded that the company should change its name from White Young
Green plc to WYG plc to align the name and branding of the company with the
other companies in the Group. A resolution to approve the change of name will be
put to shareholders at the AGM.
With a refreshed Board, a new senior executive team, and proposals for a
restructured balance sheet, White Young Green plc is in the process of putting
in place the fundamental building blocks for the future. It has been a very
difficult year for your company. However, we are emerging from it better
prepared to meet the challenges and opportunities of the future.
THE RESTRUCTURING
The Company has been in extensive discussions with its Banks and has considered
various means of re-balancing its capital structure and reducing the Company's
level of net borrowings. This follows a lengthy period of negotiations that
started in February 2009, when we published our interim results for the six
months to 31 December 2008 and announced a potential breach of a banking
covenant. The proposed restructuring involves the conversion to equity of a
significant proportion of the Group's bank borrowings together with refinanced
three year committed borrowing facilities. The Board believes that this proposed
debt to equity exchange and the borrowing facilities would provide a material
strengthening of the Company's capital structure and financial position.
This proposed restructuring comprises the following outline terms:
* the proposed conversion of approximately GBP50m of the Group's indebtedness into
new ordinary shares and new preference shares in the Company. In addition, the
Company has agreement in principle with the lenders to put in place
approximately GBP58m of refinanced debt facilities and EUR38m of committed bonding
facilities, each with a three-year term.
* on completion of the restructuring, the lenders would own approximately 60.5% of
the enlarged issued ordinary share capital, while a new employee benefit trust
would own approximately 24.5% and existing shareholders approximately 15%.
* as part of the total reduction in borrowings of approximately GBP50m, the
lenders will be issued GBP30m of preference shares for conversion of GBP30m of
outstanding borrowings.
* the proposed restructuring would require shareholder approval at an
extraordinary general meeting, with the lenders having agreed to defer testing
of covenants until after the extraordinary general meeting, or 14 December 2009,
whichever is the earlier.
* the purpose of the new employee benefit trust would be to provide share
incentives for directors, key managers and employees.
* once financed, the precise details of the proposed restructuring will be set out
in more detail in a circular, to be sent to shareholders in due course.
* the Directors intend, should the restructuring be approved by shareholders, to
cancel the admission of the ordinary shares to the Official List and to trading
on the London Stock Exchange's market for listed securities and to apply for
admission of the ordinary shares to trading on AIM.
At the date of this announcement certain uncertainties exist which are disclosed
in note 3 to the financial information.
BUSINESS REVIEW
The Business Review has been prepared by the Board for the members of White
Young Green plc to provide a summary of the performance and financial position
of the Group in the year to 30 June 2009, together with the underlying trends
and factors which are likely to affect future performance.
The global economic recession has impacted many of our markets with the UK
private sector and Republic of Ireland experiencing greatest downturn in demand.
Investment in the private development sector has dropped sharply with many
schemes cancelled or suspended and this is also mirrored across house-building
infrastructure and land regeneration.
The imbalance of the Group's revenues between domestic and international markets
has created severe trading impacts in Great Britain/Republic of Ireland and
whilst swift management action has been taken to address this, we anticipate
that some of the markets served will remain at depressed levels for the
foreseeable future.
The year ended 30 June 2009 has been the most challenging in the history of
White Young Green plc. We have implemented major changes to be fitter, stronger
and better positioned to face the challenges ahead. Significant progress has
been made in implementing our three-part forward strategy which is centred on
creating a more focused and efficient business, internationalising our company
and creating 'peaks of excellence' across critical and sustainable sectors. As
previously announced, decisive action has been taken to re-structure our
operations with significant reductions in headcount and the closure of offices
as we concentrate on stronger, quality focused regional centres.
We have incurred substantial exceptional costs arising from the change programme
and we continue to focus on working capital management and cash generation.
Selective but necessary investment is being made in strengthening our management
team and in information systems. Furthermore, improvements are being made to our
governance framework.
Financial performance
In the year to 30 June 2009, gross revenue decreased by 7% to GBP261.6m (2008:
GBP282.1m). Revenue attributable to third parties, on which we don't make a
margin, decreased to GBP47.7m (2008: GBP50.0m). Net revenue, which reflects the
value of work done by our people, decreased by 8% to GBP213.9m (2008:
GBP232.1m).
The profit performance reflects both the challenging market conditions and the
major restructuring of the Group. Operating profit before the amortisation of
acquired intangibles and before exceptional costs (exceptional and other items),
decreased by 36% to GBP17.0m (2008: GBP26.4m). There were no acquisitions
completed during the year. Operating loss after exceptional and other items, was
GBP123.7m (2008: GBP22.2m profit). Operating margin on net revenue was 7.9%
(2008: 11.4%). The profit before taxation and exceptional and other items was
GBP12.1m (2008: GBP21m) which is in line with the profit forecast announced in
the Interim Management Statement on 18 May 2009. Exceptional and other items
were GBP141.0m (2008: GBP4.2m).
It is worth noting that in the first half of the financial year Group generated
operating profit before exceptional and other items of GBP12.1m and the
comparable figure for the second half of the financial year was GBPnil.
Basic earnings per share were 17.6p (2008: 31.6p) adjusted for exceptional and
other items referred to above.
Cash generated from operations decreased to GBP12.5m (2008: GBP31.0m) and
represents 74% (2008: 117%) of operating profit before exceptional and other
items. In May 2009, we converted EUR38m of debt into Sterling to reduce exposure
taken earlier in the financial year to Euro denominated debt.
Net debt at the year end was GBP85.3m (2008: GBP68.2m) which represented a
significant reduction from the half year figure of GBP91.5m. The reduction in
the second half is a creditable performance bearing in mind the payment of
GBP3.1m of additional consideration in respect of the acquisition of PH McCarthy
Consulting Engineers Limited and the payment of GBP7.6m of exceptional cash
costs arising on the restructuring of the Group. These net debt figures are
consistent with those previously disclosed and include both cash balances held
within our captive insurance company and restricted cash balances held
predominantly within the International Business Unit. The net debt excluding
these two categories at the year end was GBP88.7m. The comparable figures for 30
June 2008 and 31 December 2008 were GBP71.6m and GBP94.4m respectively. We
believe that the revised definition presents a fairer view of the net debt
position as it only reflects cash that is readily available to the Group.
Our Board is encouraged by the prospects for the future against a market which
continues to be unpredictable and, at times, volatile. The order book now
stands at GBP260m. We have changed the way we record and monitor our order book
such that the disclosed figure reflects only secured contracts and approved
purchases under framework orders. Within the order book are international orders
of EUR153m. Comparable figures prepared on the same basis are not available for
the previous year.
Dividend
As we continue to focus on the generation and preservation of cash, no final
dividend is proposed. No interim dividend was paid. The terms of the proposed
refinancing include a restriction prohibiting the payment of a dividend whilst
the facilities remain outstanding and until the preference shares are redeemed
in full.
Strategy
Our three-part strategy, adopted in January 2009, is to create a more focused
and efficient business, internationalise our company and create 'peaks of
excellence' across critical and sustainable sectors. The first part of the
strategy is to create a "fit for purpose" Group. This has involved right sizing
the business against the changing marketplace and has been largely completed. We
have undertaken a further review of the work in progress and trade receivable
position and have taken a substantial exceptional charge in respect of a
provision against these balances at the year end in addition to the provision
taken at the half year. We have also taken swift and substantial measures to
reduce costs. This process started in the first half of the financial year and
has been substantially completed by the year end. These necessary steps will
ensure we emerge from the current economic recession with a leaner and more
competitive shape, which will provide a fundamental platform for future growth.
All five of our Business Units and head office have been involved in this
process, particularly the UK Engineering and Ireland Business Units. Across the
Group there have been significant headcount reductions and office closures.
There has also been a focus on cash management, the strengthening of the
management teams and the introduction of new processes and procedures to
strengthen the governance environment.
The second part of the strategy is to internationalise White Young Green plc and
continue to build on our international business in five key geographic regions
where we have established a strong position across growing and funded markets.
Initiatives have been undertaken to mobilise our comprehensive strengths, which
have historically been focused on the UK and Republic of Ireland, into selected
overseas markets on a cost effective and low risk basis. These initiatives are
ongoing and are predicated on building our existing relationships with major
blue-chip clients.
The third part of the strategy is to focus on the creation of 'peaks of
excellence' by identifying and building on core areas of strength in the UK and
overseas, whilst instigating cultural change and the retrospective integration
of past acquisitions. This part of the strategy is at a relatively early stage
although the culture of focusing on quality is now firmly embedded into the
Group.
Acquisitions
In the past White Young Green plc has been a highly acquisitive company. There
were no acquisitions during this financial year, but there were payments of
additional consideration in respect of past acquisitions, totalling GBP8.0m.
Board
There have been extensive changes at Board level during the year. Denis Connery,
Commercial Director and Company Secretary, and Lawrie Haynes, Chief Executive,
left the Group on 5 November 2008 and 6 January 2009 respectively. Following
Lawrie Haynes' departure, Peter Wood, the then Chairman, agreed to increase his
time in the business and Paul Hamer, previously Chief Operating Officer, was
promoted to Group Managing Director. On 10 February 2009, David Wilton was
appointed Group Finance Director and Robert Hartley, the previous Finance
Director, took on the role of Group Services Director in addition to his role as
Company Secretary. On 11 March 2009, we unfortunately had to announce that Peter
Wood would be stepping down as Chairman, and as a member of the Board, for
personal and family reasons on 31 March 2009. At that time Brian Duckworth was
appointed Non Executive Chairman until the Board made a long term appointment in
due course. Paul Hamer was promoted to Chief Executive Officer. At the same
time, Robert Hartley notified the Board of his intention to resign as Group
Services Director and Company Secretary and to leave the Group which he
subsequently did on 14 April 2009, when David Wilton took on the role of Company
Secretary.
On 31 July 2009 Mike McTighe's appointment as Chairman was announced, as was
Graham Olver's appointment as Group Services Director and Company Secretary,
with effect from 3 August 2009. Brian Duckworth stepped down as Chairman and
left the Board on 3 August 2009. On 31 July 2009, the Company also announced
that after 12 years as a Non Executive Director, John Richardson has decided to
retire from the Board. John has, as a consequence of the proposed refinancing,
subsequently agreed to remain as a director of the Company until 31 December
2009 and will be seeking re-election at the next Annual General Meeting. We
thank Brian for his major contribution to the development of White Young Green
plc. The Board has initiated a search for two new Non Executive Directors, one
of whom will be appointed as Chairman of the Audit Committee.
Employees
We are a people business and our success is wholly dependent upon the commitment
and professionalism of our staff. The financial year was marked by a significant
reduction in headcount across the Group and the introduction of labour
cost-saving arrangements in the face of the global economic recession. Difficult
decisions have had to be taken in the interests of the Group, none of which have
been taken lightly by the Board. We remain committed to the attraction,
development and retention of professional staff to enable us to deliver high
quality services into the markets in which we operate.
Exceptional and other items
As previously announced, we have incurred substantial exceptional costs in the
financial year. These exceptional costs arose predominantly from the
restructuring of the Group, and relate to redundancies and office closure costs,
the write down of work in progress and trade receivables balances, provisions
for professional indemnity claims, professional fees arising in connection with
a prospective offer and fees arising on the refinancing and the impairment of
goodwill and other general restructuring costs. A significant element of the
overall exceptional cost involves the creation of provisions and does not
represent an immediate cash cost, and in the case of the goodwill impairment
will not incur a cash cost in the future. The other items relate to the
amortisation of customer relationship and order book intangible assets. The
exceptional and other items are summarised below:
+----------------------------------------------------------+--------------------+
| | Year to 30 June |
| | 2009 |
+----------------------------------------------------------+--------------------+
| | GBPm |
+----------------------------------------------------------+--------------------+
| Employee termination costs | 9.0 |
+----------------------------------------------------------+--------------------+
| Office closure costs | 20.6 |
+----------------------------------------------------------+--------------------+
| Work in progress and trade receivables provisions | 20.5 |
+----------------------------------------------------------+--------------------+
| Professional indemnity claim provisions | 5.7 |
+----------------------------------------------------------+--------------------+
| Professional fees | 3.4 |
+----------------------------------------------------------+--------------------+
| Impairment of goodwill | 77.2 |
+----------------------------------------------------------+--------------------+
| Other restructuring costs | 2.0 |
+----------------------------------------------------------+--------------------+
| Finance costs | 0.4 |
+----------------------------------------------------------+--------------------+
| Exceptional items | 138.8 |
+----------------------------------------------------------+--------------------+
| Amortisation of acquired intangibles | 2.2 |
+----------------------------------------------------------+--------------------+
| Exceptional and other items | 141.0 |
+----------------------------------------------------------+--------------------+
Outlook
Trading conditions remain unpredictable and challenging, although there are
variations across the differing markets served by the Group. There remains a
lack of confidence and liquidity in many areas in which we trade, but there are
also some early encouraging signs in respect of opportunities and new contract
wins.
Trading for the financial year to date is in line with the Board's expectations.
We have restructured to focus on areas of strength and opportunity to be well
positioned to benefit when overall economic conditions improve. We are
investing, and will continue to invest to provide a strong platform for the
future.
Operating performance by Business Unit
The operating performance in the year to 30 June 2009 reflected both the
challenging market conditions, particularly in the second half of the financial
year, and also the profound restructuring process across the Group. Gross
revenue decreased by 7% to GBP261.6m (2008: GBP282.1m). Conditions in the
private sector have been challenging and there is likely to be strong pressure
on public sector spending in the short to medium term. In direct contrast, our
international markets continue to experience strong demand and present a major
Group opportunity for selective and sustainable growth.
WYG Engineering
WYG Engineering has experienced recessionary pressure in several of its markets
which has resulted in an overall reduction of gross and net revenues. Against
this backdrop, the management team has acted swiftly in restructuring the
Business Unit into a more efficient operation, configured to align with client
demand. Greater emphasis has been placed on reducing debtors and aged debtor
levels and making efficiency improvements to our working practices.
Over the year, gross revenue reduced by 20% to GBP76.2m (2008: GBP94.8m), net
revenue reduced by 21% to GBP69.3m (2008: GBP88.2m) and operating profit before
exceptional and other items reduced by 60% to GBP2.1m (2008: GBP5.3m).
Operating margin on net revenue decreased to 3% (2008: 6%) as a result of the
reduction in revenue noted above.
In line with the Group's three-part strategy, our focus has been on creating
'peaks of excellence' across critical and sustainable sectors where we have a
strong reputation, good experience and there is evidence of continued spending.
These are education, health care, defence, regeneration, rail and highways.
We have taken decisive action to create a more efficient and streamlined
business that is aligned to the changing demands of the market and, at the
beginning of the financial year, we carried out a pre-planned operational
re-structuring to create three primary divisions, Buildings, Rail and Highways.
Our Buildings division continues to enjoy an award winning reputation in key
regional centres across Great Britain which underpin and complement the high
quality capability and reputation that is led by Adams Kara Taylor (AKT) in
London. A combination of quality and innovation has resulted in AKT, a
strategic acquisition made by White Young Green plc in 2006, becoming critical
to the success of a truly enviable range of award winning and iconic structures.
Demand for this service remains, albeit at reduced volumes. Examples of our work
include the Stirling Prize winner Peckham Library in London, the Phaeno Building
in Germany, the Yellow Building in London and Pond Meadow in Guildford.
Across our other offices in Great Britain we continue to provide a high quality
service and project delivery and to build our reputation for client care. We are
recognised for this through award winning projects such as the Corby Rail
Station Scheme which won the Institution of Highways and Transportation's
Effective Partnership award.
Publicly funded development has also provided a sustainable income stream for us
in health care, education and defence. NHS estates departments and local primary
care have been significant sources of work particularly in acute hospitals. We
have secured repeat and new business from this important sector through focus on
client needs, delivery of service and deployment of key quality resources. We
have developed long standing strategic corporate relationships, particularly
with leading contractors, and have benefited from the Government's 'Building
Schools for the Future' (BSF) initiative which has seen large scale investment.
Key reputation enhancing projects were delivered in Nailsea, Nottingham and
Burnley and further schemes have been won in Cheltenham and Essex BSF.
Furthermore, we are supply chain partners in four teams for the second wave of
the National Academies Framework.
White Young Green plc is ranked by leading industry journal, New Civil Engineer,
as a top five consultant as defined by turnover in the defence sector. This is
supported by an extremely diverse track record of skills and experience with the
Navy, Army and RAF.
All this is in addition to projects secured with WYG Management Services which,
as client adviser, complements our collective service offering. Although the
location, mix and proportion of schemes will change as defence needs vary, we
expect that investment in the estate will continue at or above current levels.
In our Rail division, Network Rail's strategic business plan for 2007 set out
ambitious levels of investment and growth. The implementation period was five
years, and in 2008, it remained disappointingly slow with major opportunities
slow to evolve into investigation and design stages. We are lead designer on a
number of major projects including Edinburgh Waverley Station, Axminster,
Tunbridge Wells, Edinburgh to Glasgow Improvement Programme (jointly with
Transport for Scotland) and North London Lines. We are first tier suppliers on
all of these significant schemes and, per National Rail's strategic business
plan, we expect levels of spending to increase from January 2010 onwards.
Revenues in our Highways division have remained stable in the context of a
reducing market. We expect the market to continue to soften but, due to the long
term nature of our commissions, we do not anticipate any reduction in demand for
our services.
In summary, the trading conditions across our markets have, and continue to be,
mixed and challenging. However, WYG Engineering has created a platform for
future success that should enable it to deliver sustainable profit and growth in
future years.
WYG Environment Planning Transport
Our environmental, planning and transport planning activities were amalgamated
in 2008 to form WYG Environment Planning Transport. These consulting services
are largely focused on serving the early permission stages of site or project
development. WYG Environment Planning Transport is one of the market leaders in
the provision of these services and also provides one of the broadest ranges of
services to this market.
Over the year, gross revenue decreased by 3% to GBP53.8m (2008: GBP55.3m), net
revenue decreased by 1% to GBP45.6m (2008: GBP46m) and operating profit before
exceptional and other items reduced by 20% to GBP6.3m (2008: GBP7.9m). Operating
margin on net revenue fell to 14% (2008: 17%) largely as a result of low
utilisation in those disciplines that experienced down turns in work.
We faced a challenging market environment, as the industry of site acquisition
and development shrank in the face of credit shortages, falling demand for
residential units and falling commercial rents. Despite these factors we have
broadly maintained revenues and operating profitability while undertaking, in
some specific areas, necessary restructuring.
The majority of our planning and environmental planning businesses have largely
succeeded in maintaining revenues as we continue to work on longstanding client
schemes and to enhance our position as one of the leading retail planning teams
in the country; our transport planning revenues have grown during 2008/9
suggesting that we have gained market share of a falling market in this field.
Some of our environmental consulting services - notably those linked to strict
regulation and government penalty or incentive regimes, such as asbestos
management and renewable energy, have also experienced considerable growth
during the year.
Nearly 50% of our environmental work in 2007/08 related to the clean-up of
brownfield land. This sector has experienced a reduction in fee income as
instructions on new sites dried up in the second half of 08/09 and as site
owners deferred clean up programmes. We have significantly reduced our headcount
and introduced flexible working to align our resources and costs to the future
demand for our services.
* Environment
In Environment we have had a difficult and uneven year with volatile and
unpredictable market conditions. However, our wide range of services and clients
reduced the impact of the downturn across many parts of the business. Costs have
been minimized and support services rationalized in order to maximize
profitability.
In some disciplines, such as ecology, asbestos, noise and air, the order book
has held up well and we consider that we have gained market share of consulting
revenues from the competition. Other disciplines, which are heavily dependent on
construction, such as geo-environmental services, have been restructured
accordingly to manage a decreasing workload and, in addition to reduction in
work volumes, pricing and profit margins have been affected. Against this
backdrop, there appear to be signs for optimism; with visible pipelines in
certain sectors and some large geo-environmental opportunities on the horizon.
With a new and efficient business structure, we are ready to respond in areas
where the market recovers quickest, including investing in sustainability
services which brings together a strong team to build on our current track
record. We believe that this sector will grow steadily despite any recessionary
focus in the wider economy, due to the rising regulatory burden concerning
carbon and other aspects of climate change.
* Planning
Against a very challenging economic background, WYG Planning & Design achieved a
marginal increase in business compared with 2008. Profitability was, however,
reduced as a result of recognising and writing down trade debtor balances and
work in progress. The order book is down on 12 months ago but still stands at
80% of budgeted net revenues.
Our business has held up strongly in key sectors, notably retail, regeneration
and public sector services. We continue to provide advice to retail developers
on major schemes across the country. As regards public sector work, we have
undertaken key projects for the Department for Communities and Local Government,
providing research into and advising on improvements to the planning system; we
have continued to provide support for many local authority clients in policy
making, development control and master-planning. We provide services under a
number of public sector framework agreements to central government in England
and Wales and to the Regional Development Agencies. Towards the year end, the
house building sector was beginning to show signs of recovery and our widely
diversified portfolio of business activity has also held us in good stead with
continuing demand for services in the health care, education, minerals, energy
and private client sectors.
In line with the three-part strategy of creating a fit for purpose business, we
made a limited number of redundancies mainly in our design teams, although our
team in Milton Keynes, newly-established at the start of the year, has created a
momentum which appears to bode well for the year ahead.
A growing feature of our business is the value to clients of being able to
package a stream of specialist skills in support of development proposals so as
to improve streamline delivery and coordinate management of project inputs.
* Transport
During the year, orders and workload have remained steady although at a lower
level than experienced in the previous year and the management team has taken
speedy action to reduce costs through a small number of redundancies and
removing non business critical expenditure.
Demand from certain key clients has remained strong during the recession
including Sainsburys, Land Securities and National Grid Property. Public Sector
bodies including county councils, district councils and the Highways Agency also
continue to supply a steady flow of work.
As part of our strategy and in support of our existing client-base, a new
transport planning operation was established in Edinburgh and this has a growing
workload with a positive order book and provides advice for all Sainsbury's
projects in Scotland.
Elsewhere in the UK, we continue to be appointed to advise major land owners and
developers on strategic, sustainable urban extensions. We have been appointed by
Land Securities as strategic transport advisers on their proposals for between
10,000 and 20,000 residential units at North Harlow. In Rugby, we have been
appointed by a joint venture of BT, Arriva and Prologic to advise on development
of a sustainable urban extension of over 6,000 residential units.
We have also been appointed by BT to advise on their site search for wind farm
projects. Furthermore, we have advised McLaren on their proposals for a new
production car factory of some 37,000 sqm in Woking.
On the international front, transport planning has made a senior appointment to
service transport related work being commissioned by the European Commission.
This is already bearing fruit with proposals submitted for a number of major
projects and involvement of UK towns in demonstration schemes. We have also
significantly enhanced our links with WYG International offices in Poland, the
Gulf and Turkey.
Overall and against a mixed trading landscape, WYG Environment Planning
Transport has continued to perform in its key markets and streamlined its wider
operation to ensure it continues to provide a high-quality, value-added service
to its clients in an efficient and effective manner.
WYG Management Services
WYG Management Services is the project management, property management, cost
consultancy and safety management division of the Group. We are known to our
clients through three brands; WYG Management Services, Tweeds and Trench Farrow.
The utilisation of these well established and highly regarded brands in the
market has proved a successful strategy in the face of the challenging trading
conditions.
Over the year, gross revenue decreased by 18% to GBP28.5m (2008: GBP34.6m), net
revenue decreased by 20% to GBP24.3m (2008: GBP30.4m) and operating profit
before exceptional and other items reduced by 24% to GBP3.2m (2008: GBP4.2m).
Operating margin on net revenue fell to 13% (2008: 14%).
Market sectors and trading conditions continue to vary across our client base
with cost consultancy most exposed to the challenging economic cycle and the
downturn in commercial and residential development. This has seen the
proportion of revenue generated from the public sector increase to 64% from 46%
last year. Whilst the proportion of our public sector turnover has increased in
response to market conditions, we have been successful in transferring this
additional workload to improve the balance in offices more dependent on private
sector clients. Our forward strategy is to retain our private sector capability
which is vital for when the market cycle returns to support this client base.
Furthermore, much of our public sector projects are in support of estate
rationalisation and development driving cost savings for Government. We are
therefore less exposed to possible cuts in public spending as much of the work
is in committed programmes to deliver savings in budget.
In line with the three part strategy to create a fit for purpose business, we
have introduced flexible working arrangements and implemented redundancies in
areas where we are experiencing a slow order book and have rationalized our
operating centres to retain critical mass in key office locations which match
client demand. We have also successfully transferred work previously undertaken
by third parties to our in-house teams and allocated employees to sectors that
continue to show solid demand. This puts us in the best position to retain
skilled employees, ready for the upturn in key sectors such as commercial and
residential development.
We have retained an involvement, albeit with a reduced input, in many of our
major residential urban extension projects. It is pleasing to note that many of
our residential development clients are now looking to re-engage on projects
that have been delayed by market pressure over the last twelve months. We remain
very active in the social and affordable housing market as many stock transfer
and Residential Social Landlord projects have been unaffected by market
downturn. We also continue to be successful in the Education sector having
secured frameworks with Partnerships for Schools and directly with Local
Education Authorities.
Whilst the corporate and end user office market remains slow, we have been
appointed on re-planning projects as our existing clients look to make the most
efficient use of their real estate. Some of the larger mixed use development
schemes have been delayed in the current market; however we continue to work
with these clients who are using our services to secure the most effective
solution to their portfolio. In the North West of England we are working closely
with Neptune Developments and have ongoing appointment as Employers Agent,
Quantity Surveyor and Construction Design Management (CDM) for the Mann Island
and New Brighton Developments in Liverpool.
WYG Management Services is a high quality, high value provider of client support
and advisory services with much of our historic and recent workload generated
through repeat business based on referral, reputation and long term client
relationships. During the course of the year we secured a number of awards
including the British Council of Offices for the redevelopment of 55 Baker
Street for London and Regional Developments, whilst the Mountbatten Project at
the University of Southampton secured a Royal Institute of British Architects
award. Our understanding of innovative procurement in challenging circumstances
was proved in the delivery of the Mountbatten Project. The redevelopment of the
complex followed a devastating fire and created cutting edge research facilities
for computer and opto-electronic schools. The University was an existing client
and valued our forward thinking procurement proposals so much that our
appointment was extended to include the installation and commissioning of the
specialist research equipment. This expertise will stand us in good stead for
the future.
We are building on this award winning track record to secure further business in
new sectors and overseas markets to counteract the downturn in some of our
clients' activities in the UK. This focus has resulted in increased activity
overseas, as we look to build on existing WYG International presence in Poland,
Russia and Turkey. In addition we are actively targeting the Middle East and
North Africa having provided executive project management services for the
GBP300m retail and leisure development of Cairo Festival City in Egypt.
Furthermore, we continue to support Interhealth Canada and the Government of
Turks & Caicos Islands in the development of two modern $80m hospitals on the
islands of Grand Turk and Providenciales. These hospitals will become the basis
of a full health care service where we are providing independent adviser
services during construction and commissioning. Our direct invitation to be
involved on this project followed the successful completion of an orthopaedic
hospital for Interhealth Canada in Runcorn.
As a result of our planned diversification into new sectors, we have also been
successful in our appointment to provide construction safety management services
for the GBP1.25bn PFI project to widen the M25 motorway.
WYG Management Services continues to sustain and secure work across its key
markets and through its ongoing reputation for high-quality services, will look
to build on its position in the public sector and align itself for the private
sector upturn.
WYG Ireland
The Irish economy has seen a severe and continued decline across all
construction, development and infrastructure sectors over the last 12 months
which has impacted WYG Ireland and the wider support services market.
Ernst & Young's Economic Eye Forecast (May 2009) predicts that the economy in
the Republic of Ireland will shrink by 8.9% in 2009 with a modest contraction
continuing into 2010 before a recovery in 2011.
Over the year, gross revenue decreased by 3% to GBP50.3m (2008: GBP52m), net
revenue decreased by 8% to GBP43.1m (2008: GBP46.7m) and operating profit before
exceptional and other items reduced by 45% to GBP3.8m (2008: GBP6.9m).
Operating margin on net revenue fell to 9% (2008: 15%).
The impact of global recession on Northern Ireland's economy is not expected to
be as severe as in the Republic of Ireland or indeed the rest of the UK.
Predictions are that the local economy will decline by 2.9% in 2009 - comparing
favourably with other areas of the UK, where it is expected to be in the region
of 3.5%.
In addition, employment levels in the Republic of Ireland will not return to
their peak period (2007) until the year 2021 compared to 2018 for a similar
recovery in Northern Ireland. This means for many people throughout the whole
of Ireland, the recession will have a significant impact on many individuals.
WYG Ireland has seen a decline in its revenues and profitability. During this
period the management team has taken the necessary restructuring steps to ensure
the cost base is in line with the current needs of the business and resource
levels are aligned to the present and future anticipated workload.
During the course of the year we initiated a programme to reduce our cost base
to reflect the market conditions with every facet of the business scrutinised.
This strident action required us to make some very tough decisions, particularly
regarding employees, where we have reduced our total headcount by almost a third
on the previous year. We also engaged in a rationalisation of our operational
properties and this led to the closure of five offices.
These steps have been taken to ensure the business remains competitive during
the recession and quickly capitalises on opportunities when the markets return
to growth.
Within WYG Ireland, we have aligned ourselves very closely with the Group's
three-part strategy which seeks to re-shape the business. In July 2008, we
entered a new phase in our evolution with the introduction of an all Ireland
discipline-led business model. This model supports our strategy of having
technical excellence at the core of everything we do. We are now committed to
working together to truly deliver a multi-discipline service to meet the needs
of our existing and future clients.
Following the introduction of White Young Green plc's internationalising
initiative, we have appointed an international director for Ireland and
currently act as the Group sponsor for Poland. More recently, Ray Moore, the
managing director of WYG Ireland has been appointed as the group lead on the
Gulf region. We have already placed a number of people from our business
overseas and we will look to win contracts in those areas as well as
establishing ourselves further in the countries in which we already have a
presence.
Like most businesses throughout Ireland, the global recession has had an impact
on us. However, we are continuing to hold our own, particularly in Northern
Ireland thanks to a number of recent contract wins, including an appointment for
our project managers from the Northern Ireland Prison Service to manage the
design and building programme of a new GBP200m 800-cell prison at the existing
Magilligan site in Co. Londonderry. We have also secured some key projects in
areas such as health and education - namely the redevelopment of Whiteabbey
hospital in Co. Antrim and more recently, a major contract to provide civil and
structural engineering and environmental consultancy services for the new
GBP150m Desertcreat Training College near Cookstown.
There have also been some encouraging developments in the Republic of Ireland
with the appointment of our mechanical and engineering, fire and sustainability
consultants on the EUR350m redevelopment of the Electricity Supply Board
headquarters in Dublin. Our environmental and planning team in Ireland
continues to provide many sought after services. Statutory process requires
environmental issues to become a core consideration for both development and
operational businesses. As a result, there has been a strong retention of market
interest in our services, particularly in environmental management systems and
also due diligence services. Sustainability is a key pillar in development
principles in Ireland and we are supporting our clients in addressing the
challenges that they face in this area as well as influencing national
approaches to the sustainability agenda. Notable project wins for the
Environmental and Planning team this year have included the groundwater
monitoring programme for the Environment Protection Agency, continued services
on the Envirowise Programme, the regeneration of the former Maze Prison and Long
Kesh security site, Co. Antrim, and a planning application including an
Environmental Impact Statement for a 350 MW Powerplant for Lumcloon Energy,
Ferbane, Co. Offaly.
It has been a challenging year for the entire Irish economy and within that
context, WYG Ireland has re-shaped itself significantly to meet the challenges
ahead. The business is built on the quality of its people and it is this key
factor which will create future success when the economy returns to growth.
WYG International
WYG International provides social and economic regeneration consultancy together
with the core technical skills of Engineering, Management Services and
Environment, Planning and Transport. The Business Unit generated 20% of the
gross revenue of the Group (2008: 16%).
Over the year, gross revenue increased by 16% to GBP52.8m (2008: GBP45.5m), net
revenue increased by 52% to GBP31.7m (2008: GBP20.8m) but operating profit
before exceptionals and other items reduced to GBP1.5m (2008: GBP2.1m).
Operating margin on net revenue fell to 5% (2008: 10%) as we retained resource
to ensure we were in the best possible position following transitions in Poland,
Romania and Bulgaria. These transitions have now been successfully completed.
Our international order book has continued to grow in the year and now stands at
GBP86m. New appointments in this period have included a migration project in
Turkey, developing the economy in Serbia and a significant GBP8.3m project to
improve the living conditions and rights of populations across Africa, the
Caribbean and Pacific areas through management of migration.
We also prepared over the year for our move to a new Group regional structure
which we implemented on 1 July 2009. In seeking to grow the international work
of the Group significantly over the next few years we are focusing on our core
areas of strength in Central and Eastern Europe, the Balkans and the
Commonwealth of Independent States: and putting investment into accelerating our
growth in the Middle East and Africa and in the Gulf.
Central and Eastern Europe
In Poland, diversification was a core requirement in response to a changing
investment environment as the country mobilised EU Structural Funds to combat
the economic downturn. As a result, we restructured the business to provide a
more effective response to public and private sector clients in both the
socio-economic and technical services sectors. This resulted in over 350
contract wins, with a total fee value of more than EUR21m.
Regionalisation was another important theme and business challenge. In a number
of projects "Investment in People" advisory and training services were provided
to Regional Labour Offices for the unemployed or those threatened by
unemployment, as well as for staff and managers of enterprises seeking higher
profitability and competitiveness. We also provided support to regional
authorities in their efforts to accelerate badly needed investments in
infrastructure, and especially in roads and transport and this work has included
investment preparation (strategies, feasibility studies, Environmental Impact
Assessments, financing plans), design (sections of regional and national road
networks), and construction (supervision and project management services).
In Romania and Bulgaria, the transition was successfully achieved from English
language, pre-EU accession programmes to locally procured projects, bid in local
languages and financed mainly through the EU Structural and Cohesion Funds and
Operational Programmes. In Romania, the team was strengthened significantly over
the course of the year, particularly in respect of the business development and
finance functions, making it largely self-sufficient. This team has established
itself as one of the most successful in the area of socio-economic technical
assistance projects in the country and at the end of the year was implementing a
portfolio of projects with a combined value of EUR114.4m.
In Bulgaria the first half of the year was relatively difficult, with a scarcity
of suitable projects. However, the second half of the year was more encouraging
and a number of major proposals in the field of municipal infrastructure were
submitted before the end of the year. A vocational training centre was
established and while it has already successfully delivered a number of training
courses, it will deliver the greatest benefit when the relevant measures under
the National Rural Development Programme are launched.
New, high-profile private sector clients included Coca Cola, CEZ (the country's
largest electrical supplier) and Petrol, related to preparation and management
of projects for financing through the Human Resources Development Operation
Programme. WYG Bulgaria was approved as Operational Programmes' Adviser for
several municipalities, including the largest - Sofia Regional municipality.
Balkans
In Turkey and northern Cyprus there were several project wins, including four
major projects with a total project value of EUR14.6m, involving the deployment of
more than 100 consultants over the next four years and the establishment of 14
project offices within clients' premises. In addition, we secured a contract to
assist the municipalities of Istanbul, Izmir, Ankara and Bursa to effectively
manage the socio-economic and environmental problems resulting from migration
and to rehabilitate and reintegrate street children. This is one of the largest
EU-funded technical assistance projects in Turkey with a value of EUR8.1m.
Furthermore, we secured a EUR2.7m contract to establish Reception Centres for
Asylum Seekers and Refugees and Removal Centres for Illegal Immigrants in seven
Turkish cities. This is one of the larger EU-funded architectural design
projects in the country. In northern Cyprus, the year saw the start of a
four-year, EUR2m assignment to support rural development and a project to provide
publicity and promote awareness of the European Union amongst the Turkish
Cypriot community.
The Western Balkans remains a core market with the region receiving extensive
allocations of financial support under the EU Instrument for Pre Accession
Assistance (IPA). In late 2008 the first allocations for IPA 2007 and 2008 came
on-stream for four of the seven Western Balkans territories (Croatia, Serbia,
Kosovo, Bosnia and Herzegovina) and the remaining three (Albania, Macedonia,
Montenegro) were released in late 2009.
Substantial pipelines of projects have been identified for the next 12-18
months, with strong prospects for continuation over the next 3-5 years. Whilst
to date the focus of active procurement has been in the socio-economic sector,
there are also many technical projects in the pipeline which we will be
pursuing. New wins include a EUR5m project to support Regional Development
Agencies in Serbia and a EUR1.3m education project in Montenegro to set up a
national qualifications framework. New investments include the establishment of
a representative office in Serbia, and the appointment of an additional two
country representatives to support business development across the region.
Commonwealth of Independent States (CIS - former Soviet Union)
The CIS remained a core business region for us and in the period saw several new
projects secured with a total value of EUR13.4m, including two of around EUR5m each
in Ukraine covering assistance with the World Trade Organisation (WTO) accession
and reform of the judiciary. Additional wins included a prestigious regional
Water Governance project in Central Asia and the organisation of a business
registration "One Stop Shop" in Tajikistan.
Diversification away from the EU was achieved by winning a World Bank financial
reform project in Tajikistan and a project in Uzbekistan for preparation and
preliminary design of a major water and wastewater sector loan for the Asian
Development Bank.
Further diversification into technical services will be actively pursued in the
coming year, particularly in Kazakhstan, where WYG Kazakhstan has been
registered as a legal entity and a company office opened staffed by an
experienced Associate Director. Plans for the formal registration of WYG Ukraine
were commenced and will be completed next year.
Middle East and Africa (MEA)
The Middle East and Africa region continued to grow with total revenues close to
EUR10m. In the technical services field these projects included a EUR10m integrated
transport policy and implementation project in Algeria, a project to strengthen
the capacity of the energy and power sector in the Congo (generating revenues of
EUR 660k pa), and a EUR3.75m project management services contract with EIB to manage
the design, procurement and implementation of a EUR90m water and sanitation
project in Damascus, Syria.
Socio-economic projects included a new EUR9.7m assignment providing advice and
support to regional institutions in the Africa-Pacific-Caribbean (ACP) on
migration, a project to support provincial development plans in the Eastern Cape
province in South Africa (generating EUR1.47m revenues/pa) and a EUR20m programme
aimed at improving the business environment / climate in ACP countries.
Our new MEA team was assembled to target a significant (EUR189m) pipeline of
opportunities in the next year and beyond.
Gulf
In the Gulf, WYG Engineering opened during the year, a branch office in Abu
Dhabi which the Company are using as its spearhead into this region.
People
At the end of June 2009 we employed 2,768 people compared to 3,468 people 12
months ago.
In the face of global economic recession and the changing needs of our clients,
during the past year we have stated our three part strategy. This involves the
streamlining of our business operations and creating 'centres of excellence'. As
a result, we have undergone extensive restructuring which regrettably has meant
the loss of around 700 people across the Group and around a further 100 full
time equivalent reductions by introducing part-time working opportunities. The
job losses were undertaken only as a last resort when all other actions had been
considered or instigated in mitigation of redundancy. In some areas of the
Group, where it was commercially feasible to do so, we have been able to save
jobs by accommodating increased flexible working practices, operating
recruitment restrictions and reducing basic salaries. We thank our people for
working with our business leaders in this regard.
None of the above actions alter our commitment to retain, engage and develop our
people - the lifeblood of our business. During the year we continued to deliver
on this promise by embedding our 'People First' approach and equipping our
people with a range of best practice tools to ensure that they can flourish,
whilst continuing to deliver quality services to our clients.
The 'People First' approach involves the Group wide implementation of:
* defined job families for consulting, business services and leadership
* career ladders within each defined job family showing a clear path for
progression
* generic job profiles to underpin the career ladders and personal development
plans of our people
* the WYG Competency Framework which identifies the critical skills and behaviours
needed to deliver the corporate brand values of being dependable, imaginative
and purposeful
* new staff appraisal formats incorporating the WYG Competency Framework
A key concept of 'Quality Partner' has also been introduced across the Group,
which utilises the 'People First' toolkit and links it to the ongoing
transformation of White Young Green plc as a discipline-led business. It is the
Quality Partner's remit to ensure that consistency of high quality service
continues to be delivered across all our offerings aimed at securing even more
repeat business and building on the already strong reputation of the Group. The
link between consistent 'best in class' service delivery leading to high levels
of client satisfaction and improved employee motivation underpins our rationale
to promote the 'Quality Partner' concept.
Protecting the intellectual property that our people bring to our clients and
their projects continues to be the focus of all our people strategies as we
remain alert to the existence of the war for talent. Continuing with this
analogy, our defences remain strong. In the interest of modernising our people
management approach and in order to deal compassionately with the challenges
flowing out of our restructuring programme, our operational HR team was
bolstered in the year by the recruitment of two additional, professionally
qualified HR people. The new recruits joined their operational colleagues to
assist our business leaders in the delivery of our people management
interventions, harnessing complete dedication and support from all our areas of
the business to ensure that our people feel engaged and supported in the face of
widespread change.
In the graduate market place, whilst our intake for new graduates has reduced
since last year, we have taken the decision to continue with our formal Graduate
Development Programme (GDP) in order to maintain the excellent reputation we
have created as a graduate employer in our sector. This includes enhancements to
our existing programmes encompassing organised networking and CPD events,
Executive Director work-shadowing days and investment of both time and resources
in the development of the Graduate Forum - a web-based communication tool
accessed by our graduates at any given time from any White Young Green plc
location. Graduates continue to be supported by rotation programmes on a bespoke
basis enabling them to trial a range of disciplines to ensure the right long
term career choices are made. Throughout the programme, advice and guidance is
provided by mentors, coaches and a dedicated graduate support team. In addition
there is a range of self-directed learning opportunities together with
structured, on the job training to equip our trainees with the technical,
interpersonal, organisational and leadership skills needed for future careers
success in White Young Green plc. We are pleased that candidates from 'the Big
Idea' programme have been able to secure positions in the Group. One of these
graduates is currently experiencing life in Abu Dhabi and forging her
international career in the process.
The Company has accredited learning and development agreements with the
following professional bodies: the Institution of Civil Engineers, Chartered
Institution of Building Services Engineers, Institution of Engineers' Ireland,
Royal Institution of Chartered Surveyors and Chartered Institution of Water and
Environmental Management. WYG is also a recognised learning partner of the Royal
Town Planning Institute and continues working towards accreditation with many
others.
We continue to invest appropriately in the development of our leaders and
provide professional development support by modular and personal leadership
development programmes to meet the succession needs of the business. Following
successful evaluation of 2008/09 programmes, we have committed to continue the
support for our business leaders for the coming year, incorporating the need to
deliver our three part business strategy for the coming period and to take our
people with us on that journey.
Learning and development has always played an important role across the business
and continues to play a high profile this year as part of the ongoing commitment
to helping our people fulfil their potential and improve job satisfaction. Our
Learning and Development team has been extremely active in developing as many
internal training solutions as possible in the prevailing economic climate and
has played a key role in promoting knowledge sharing and knowledge management
across the Group.
CONSOLIDATED INCOME STATEMENT
For the year ended 30 June 2009
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| | | Before | | | Before | | |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| | | exceptional | Exceptional | | exceptional | Exceptional | |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| | Note | and other | and other | Total | and | and | Total |
| | | items | items | | other | other | |
| | | | | | items | items | |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| | | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| Continuing | | | | | | | |
| operations | | | | | | | |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| Revenue | 4 | 261,629 | - | 261,629 | 282,108 | - | 282,108 |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| Operating expenses | | (244,649) | (140,634) | (385,283) | (255,712) | (4,194) | (259,906) |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| Operating | | 16,980 | (140,634) | (123,654) | 26,396 | (4,194) | 22,202 |
| (loss)/profit | | | | | | | |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| Finance costs | 5 | (4,868) | (374) | (5,242) | (5,354) | - | (5,354) |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| (Loss)/profit before | | 12,112 | (141,008) | (128,896) | 21,042 | (4,194) | 16,848 |
| tax | | | | | | | |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| Tax credit / | 7 | (2,912) | 3,466 | 554 | (4,969) | 2,558 | (2,411) |
| (charge) | | | | | | | |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| (Loss)/profit | | 9,200 | (137,542) | (128,342) | 16,073 | (1,636) | 14,437 |
| attributable to | | | | | | | |
| equity shareholders | | | | | | | |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| | | | | | | | |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| (Loss)/earnings per | 8 | | | | | | |
| share | | | | | | | |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| Basic | | 17.6p | (263.6p) | (246.0p) | 31.6p | (3.2p) | 28.4p |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| Diluted | | 17.7p | (264.1p) | (246.4p) | 30.4p | (3.1p) | 27.3p |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| | | | | | | | |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| Dividend per share | 9 | | | | | | |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| Interim - proposed | | - | - | - | 3.2p | - | 3.2p |
| and paid | | | | | | | |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| Final - proposed | | - | - | - | 6.3p | - | 6.3p |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| | | - | - | - | 9.5p | - | 9.5p |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
| Paid | | 6.3p | - | 6.3p | 8.6p | - | 8.6p |
+----------------------+------+-------------+--------------+-----------+-------------+-------------+-----------+
Details of exceptional and other items are given in note 6.
The accompanying notes to the Accounts are an integral part of this consolidated
income statement.
CONSOLIDATED BALANCE SHEET
As at 30 June 2009
+-----------------------------------------------+-------+--------------+--------------+
| | | |
+-----------------------------------------------+-------+-----------------------------+
| | | 2009 | 2008 |
+-----------------------------------------------+-------+--------------+--------------+
| | Note | GBP'000 | GBP'000 |
+-----------------------------------------------+-------+--------------+--------------+
| Non-current assets | | | |
+-----------------------------------------------+-------+--------------+--------------+
| Goodwill | 10 | 43,472 | 115,625 |
+-----------------------------------------------+-------+--------------+--------------+
| Other intangible assets | | 12,699 | 15,203 |
+-----------------------------------------------+-------+--------------+--------------+
| Property, plant and equipment | | 13,854 | 14,517 |
+-----------------------------------------------+-------+--------------+--------------+
| Investments | | - | - |
+-----------------------------------------------+-------+--------------+--------------+
| Deferred tax assets | | 275 | 1,933 |
+-----------------------------------------------+-------+--------------+--------------+
| Derivative financial instruments | | 13 | 506 |
+-----------------------------------------------+-------+--------------+--------------+
| | | 70,313 | 147,784 |
+-----------------------------------------------+-------+--------------+--------------+
| Current assets | | | |
+-----------------------------------------------+-------+--------------+--------------+
| Work in progress | 11 | 41,189 | 48,041 |
+-----------------------------------------------+-------+--------------+--------------+
| Trade and other receivables | 12 | 64,076 | 81,621 |
+-----------------------------------------------+-------+--------------+--------------+
| Tax recoverable | | 3,919 | 2,260 |
+-----------------------------------------------+-------+--------------+--------------+
| Cash and cash equivalents | | 10,896 | 17,427 |
+-----------------------------------------------+-------+--------------+--------------+
| | | 120,080 | 149,349 |
+-----------------------------------------------+-------+--------------+--------------+
| Current liabilities | | | |
+-----------------------------------------------+-------+--------------+--------------+
| Trade and other payables | | (72,399) | (79,977) |
+-----------------------------------------------+-------+--------------+--------------+
| Current tax liabilities | | (704) | (1,490) |
+-----------------------------------------------+-------+--------------+--------------+
| Financial liabilities | 14 | (7,298) | (1,756) |
+-----------------------------------------------+-------+--------------+--------------+
| | | (80,401) | (83,223) |
+-----------------------------------------------+-------+--------------+--------------+
| Net current assets | | 39,679 | 66,126 |
+-----------------------------------------------+-------+--------------+--------------+
| Non-current liabilities | | | |
+-----------------------------------------------+-------+--------------+--------------+
| Financial liabilities | 14 | (88,946) | (83,874) |
+-----------------------------------------------+-------+--------------+--------------+
| Retirement benefit obligation | | (4,126) | (1,843) |
+-----------------------------------------------+-------+--------------+--------------+
| Deferred tax liabilities | | (3,586) | (4,127) |
+-----------------------------------------------+-------+--------------+--------------+
| Provisions, liabilities and other charges | 13 | (30,056) | (3,680) |
+-----------------------------------------------+-------+--------------+--------------+
| | | (126,714) | (93,524) |
+-----------------------------------------------+-------+--------------+--------------+
| Net (liabilities)/assets | | (16,722) | 120,386 |
+-----------------------------------------------+-------+--------------+--------------+
| | | | |
+-----------------------------------------------+-------+--------------+--------------+
| Shareholders' equity | | | |
+-----------------------------------------------+-------+--------------+--------------+
| Share capital | | 2,648 | 2,583 |
+-----------------------------------------------+-------+--------------+--------------+
| Share premium account | | 22,324 | 21,614 |
+-----------------------------------------------+-------+--------------+--------------+
| Merger reserve | | 17,900 | 51,599 |
+-----------------------------------------------+-------+--------------+--------------+
| Hedging and translation reserve | | 2,985 | 5,616 |
+-----------------------------------------------+-------+--------------+--------------+
| Retained earnings | | (62,579) | 38,974 |
+-----------------------------------------------+-------+--------------+--------------+
| | (16,722) | 120,386 |
+-----------------------------------------------+-------+--------------+--------------+
The accompanying notes to the Accounts are an integral part of this consolidated
balance sheet.
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 June 2009
+-----------------------------------------+------+----------+----------+
| | | |
+-----------------------------------------+------+---------------------+
| | | 2009 | 2008 |
+-----------------------------------------+------+----------+----------+
| | | GBP'000 | GBP'000 |
+-----------------------------------------+------+----------+----------+
| Operating activities (note 16) | | | |
+-----------------------------------------+------+----------+----------+
| Cash generated from/(used in) | | 12,454 | 30,998 |
| operations | | | |
+-----------------------------------------+------+----------+----------+
| Interest paid | | (5,322) | (5,304) |
+-----------------------------------------+------+----------+----------+
| Tax paid | | (435) | (4,833) |
+-----------------------------------------+------+----------+----------+
| Net cash generated from/(used in) | | 6,697 | 20,861 |
| operating activities | | | |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| Investing activities | | | |
+-----------------------------------------+------+----------+----------+
| Proceeds on disposal of property, plant | | 671 | 4,247 |
| and equipment | | | |
+-----------------------------------------+------+----------+----------+
| Purchases of property, plant and | | (6,372) | (6,476) |
| equipment | | | |
+-----------------------------------------+------+----------+----------+
| Purchases of businesses in prior and | | (7,985) | (29,538) |
| current years | | | |
+-----------------------------------------+------+----------+----------+
| Purchases of intangible assets | | (989) | (1,409) |
| (computer software) | | | |
+-----------------------------------------+------+----------+----------+
| Cash balances acquired with businesses | | - | 1,643 |
+-----------------------------------------+------+----------+----------+
| Dividends received | | - | - |
+-----------------------------------------+------+----------+----------+
| Net cash (used in)/generated from | | (14,675) | (31,533) |
| investing activities | | | |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| Financing activities | | | |
+-----------------------------------------+------+----------+----------+
| Net proceeds on issue of ordinary share | | 775 | 192 |
| capital | | | |
+-----------------------------------------+------+----------+----------+
| Equity dividends paid | | (3,251) | (4,364) |
+-----------------------------------------+------+----------+----------+
| Repayments of borrowings | | (94,341) | (1,242) |
+-----------------------------------------+------+----------+----------+
| Draw down of loan facilities | | 94,605 | 31,665 |
+-----------------------------------------+------+----------+----------+
| Repayments of obligations under finance | | (1,627) | (6,519) |
| leases | | | |
+-----------------------------------------+------+----------+----------+
| Purchase of own shares for Employee | | (776) | (622) |
| Benefit Trust | | | |
+-----------------------------------------+------+----------+----------+
| Net cash generated from/(used in) | | (4,615) | 19,110 |
| financing activities | | | |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| Net (decrease)/increase in cash and | | (12,593) | 8,438 |
| cash equivalents | | | |
+-----------------------------------------+------+----------+----------+
| Cash and cash equivalents at beginning | | 17,042 | 8,604 |
| of year | | | |
+-----------------------------------------+------+----------+----------+
| Cash and cash equivalents at end of | | 4,449 | 17,042 |
| year | | | |
+-----------------------------------------+------+----------+----------+
The accompanying notes to the Accounts are an integral part of this consolidated
cash flow statement.
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
+--------------------------------------------+-----------+---------+
| | |
+--------------------------------------------+---------------------+
| | 2009 | 2008 |
+--------------------------------------------+-----------+---------+
| | GBP'000 | GBP'000 |
+--------------------------------------------+-----------+---------+
| (Loss)/profit attributable to equity | (128,342) | 14,437 |
| shareholders | | |
+--------------------------------------------+-----------+---------+
| Net exchange adjustments offset in | (2,138) | 6,102 |
| reserves net of tax | | |
+--------------------------------------------+-----------+---------+
| Actuarial (losses)/gains on defined | (1,449) | 584 |
| benefit pension schemes | | |
+--------------------------------------------+-----------+---------+
| (Losses)/gains on cash flow hedges | (493) | 201 |
+--------------------------------------------+-----------+---------+
| Tax on items taken directly to equity | 214 | (525) |
+--------------------------------------------+-----------+---------+
| Total recognised income and expense for | (132,208) | 20,799 |
| the year | | |
+--------------------------------------------+-----------+---------+
The accompanying notes to the Accounts are an integral part of this consolidated
statement of recognised income and expense.
NOTES TO THE FINAL RESULTS
1. GENERAL INFORMATION
White Young Green plc is incorporated and domiciled in England, the address of
its registered office is Arndale Court, Headingley, Leeds, LS6 2UJ. The company
is listed on the London Stock Exchange.
The principal activity of the Group in the period under review was that of
consultant to the built, natural and social environment. The Group's revenue
derives from activities in Great Britain, Ireland and the Group's International
division.
The financial information, which comprises the Group income statement, Group
statement of recognised income and expense, Group balance sheet, Group cash flow
statement and related notes, is derived from the full Group financial statements
for the year ended 30 June 2009 and does not constitute full accounts within the
meaning of section 434 of the Companies Act 2006. This financial information has
been agreed with the auditors for release.
The Group Annual Report and Accounts for the year ended 30 June 2009 on which
the auditors have given an unqualified report (but which includes emphasis of
matter relating to going concern) and which does not contain a statement under
section 498 of the Companies Act 2006, will be delivered to the Registrar of
Companies in due course, and made available to shareholders from 10 November
2009.
2. BASIS OF PREPARATION
The accounts have been prepared in accordance with International Financial
Reporting Standards ("IFRS"), International Financial Reporting Interpretations
Committee ("IFRIC") interpretations endorsed by the European Union ("EU") and
those parts of the Companies Act 2006 applicable to companies reporting under
IFRS. These accounts have been prepared under the historical cost convention
with the exception of derivative financial instruments and share based payments
which are recognised at fair value. The Group's accounting policies have been
consistently applied to all the years presented, unless otherwise stated. The
Group has adopted IFRS8, operating segments, in the current financial year.
The preparation of accounts in conformity with generally accepted accounting
principles requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the accounts and the
reported amounts of revenues and expenses during the reporting period. Although
these estimates are based on management's best knowledge of the amount, event or
actions, actual results ultimately may differ from those estimates.
The Group has recorded a category for 'exceptional and other items' in the
income statement in 2009. In 2008, the Group did not record any exceptional
items and the 'other items' disclosed in 2008 represented the amortisation of
certain acquired intangible assets and research and development tax credits
relating to prior years. These other items have been excluded from the 2009
definition of exceptional items as they are recurring in nature.
Exceptional items are those that are both material and non-recurring and whose
significance is sufficient to warrant separate disclosure and identification
within the consolidated financial statements and are disclosed within their
relevant business segment within segmental reporting. Items that may give rise
to classification as exceptional items include, but are not limited to,
significant and material restructuring closures and reorganisation programmes,
asset impairments, and the profit or losses on the closure of offices.
3. RESTRUCTURING
As a result of the risk of potential future covenant breaches, the Company
announced in February 2009 that it had entered into negotiations with its main
lenders, Lloyds Banking Group plc, Fortis Bank UK Branch and The Royal Bank of
Scotland plc ('the Banks'). Since June 2009, the Banks have deferred testing of
the covenants, agreed on a monthly basis.
Since that time, the Company has been in extensive discussions with the Banks
and has considered various means of re-balancing its capital structure and
reducing the Company's level of net borrowings. The proposed restructuring
involves the conversion to equity of a proportion of the Group's bank borrowings
together with three year borrowing facilities. The Board believes that this debt
to equity conversion and the refinanced facilities would provide a material
strengthening of the Company's capital structure and financial position.
This proposed restructuring comprises:
* a conditional placing of new ordinary shares to the Banks in exchange for the
conversion of a proportion of the Company's outstanding bank borrowings. The new
ordinary shares subject to the placing to the Banks would represent, in
aggregate, approximately 60.5% of the enlarged issued share capital of the
Company;
* a conditional issue of unlisted preference shares, with the Banks being issued
preference shares in the form of 'A' preference shares and 'B' preference
shares;
* the gift by the Banks to the new employee benefit trust of the new 'B'
preference shares for the purpose of enabling senior executive management to
benefit from the new 'B' preference shares in due course;
* the new employee benefit trust acquiring new ordinary shares as would represent
approximately 24.5% of the enlarged issued share capital of the company;
* the refinanced facilities, including term debt and working capital facilities
and bonding facilities, that would be provided by the Banks;
* should the restructuring be approved by shareholders, the cancellation of the
admission of the ordinary shares to the Official List and to trading on the
London Stock Exchange's market for listed securities and to apply for admission
to trading on AIM; and
* as necessary, a conditional waiver of the requirements of Rule 9 of the City
Code on Takeovers and Mergers.
As part of the proposed banking facilities the Group would be required to meet
certain financial covenant tests which will be tested at quarterly intervals
over the term of the facilities.
Material uncertainties
The heads of terms for the proposed restructuring are not legally binding
although they have been approved by the credit committee of each Bank. Further,
the Banks have agreed to defer testing of certain financial covenants until the
day after the Extraordinary General Meeting relating to the proposed
restructuring, or 14 December 2009, whichever is the earlier.
Whilst the heads of terms have been approved by the credit committee of each
Bank, the refinanced facilities are not currently committed and there remains
the risk that the Banks could seek to renegotiate the agreed heads of terms or
the proposed covenants. Should any further negotiations with the Banks prove
unsuccessful then the Group may have insufficient liquidity shortly thereafter
and may be unable to satisfy its existing financial covenants and/or service its
existing borrowings.
The provision of the refinanced banking facilities is conditional on the
completion of the proposed restructuring (including the proposed conversion of
part of the existing debt into equity). This requires shareholder approval at an
Extraordinary General Meeting, by a majority of 75% of those shareholders
attending and voting (in person or by proxy). In the event that the necessary
approvals are not obtained and the relevant resolutions are not passed, the
refinanced banking facilities would not be made available and the Group would be
required to re-enter negotiations with the Banks. Should these further
negotiations prove unsuccessful then the Group would face being unable to
satisfy its financial covenants and/or service its existing borrowings.
The Board has concluded that the status of the heads of terms and the conditions
relating to the proposed restructuring, including the need for the requisite
shareholder approval, represent material uncertainties which may cast
significant doubt on the Group's ability to continue as a going concern.
However, after considering these uncertainties and in light of the recent
forecasts of the Group, the Board has a reasonable expectation that the Group
will be successful in finalising the proposed restructuring and for this reason
considers it to be appropriate to continue to adopt the going concern basis in
preparing the financial statements. The financial statements do not include
adjustments that would result if the Group was unable to continue as a going
concern.
4. SEGMENTAL INFORMATION
Business segments
IFRS 8 requires segment reporting to be based on the internal financial
information reported to the chief operating decision maker. The group's chief
operating decision maker is deemed to be the Executive Committee comprising Paul
Hamer (Chief Executive Officer), David Wilton (Group Finance Director), Graham
Olver (Group Services Director), Liz Zukowski (HR Director) and the managing
directors of the Business Units: John Jenkins (Engineering), Neil Parison
(International), Ray Moore (Ireland), David Crichton-Miller (Environment
Planning Transport) and Clive Anderson (Management Services). Its primary
responsibility is to manage the group's day to day operations and analyse
trading performance. The group's segments are detailed below and are those
segments reported in the group's management accounts used by the Executive
Committee as the primary means for analysing trading performance. The Executive
Committee assesses profit performance using profit before tax measured on a
basis consistent with the disclosure in the group accounts.
The Group's operations are managed and reported by Business Units as follows.
Engineering, Management Services and Environment Planning Transport are skill
based, operate mainly in Great Britain and address a range of different markets
and clients. There is no material reliance on specific clients or on types of
project and the Business Units are actively encouraged to make best use of their
own skills whilst actively promoting, where applicable, the other skills within
White Young Green plc, thereby maximising the opportunity to cross-sell.
The Business Unit in Ireland, which covers both Northern Ireland and the
Republic of Ireland, is set up to provide clients with skills in Engineering,
Management Services and Environment, Planning and Transport. In effect, it
replicates the organisational structure in Great Britain.
The International Business Unit was originally established on the back of
socio-economic service demand from major clients such as the EU, World Bank and
the UK Department for International Development. It has established in-country
operations in Poland, Russia, Romania, Bulgaria, Turkey, Abu-Dhabi, Kazakhstan
and South Africa and, in addition to its traditional socio economic service, now
provides technical services into those markets utilising the skills available
across the rest of the White Young Green plc business.
Segment consolidation is based on the same accounting principles as for the
Group as a whole. Inter-segment sales are charged at prevailing market prices.
The segment results for the year ended 30 June 2009 are as follows:
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| | | | Environment | | | | |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| | Engineering | Management | Planning | Ireland | International | Eliminations | Group |
| | | Services | Transport | | | | |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| | 2009 | 2009 | 2009 | 2009 | 2009 | 2009 | 2009 |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| Revenue | | | | | | | |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| Gross | 76,573 | 28,590 | 53,817 | 52,136 | 52,832 | (2,319) | 261,629 |
| revenue | | | | | | | |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| Inter-segment | (415) | (85) | (21) | (1,798) | - | 2,319 | - |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| External | 76,158 | 28,505 | 53,796 | 50,338 | 52,832 | - | 261,629 |
| gross | | | | | | | |
| revenue | | | | | | | |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| Operating | 2,079 | 3,246 | 6,334 | 3,771 | 1,550 | - | 16,980 |
| profit | | | | | | | |
| excluding | | | | | | | |
| exceptional | | | | | | | |
| and other | | | | | | | |
| items | | | | | | | |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| Exceptional | (37,279) | (7,473) | (10,790) | (62,692) | (22,400) | - | (140,634) |
| and other | | | | | | | |
| items | | | | | | | |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| Operating | (35,200) | (4,227) | (4,456) | (58,921) | (20,850) | - | (123,654) |
| loss | | | | | | | |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| Finance | | | | | | | (5,242) |
| costs | | | | | | | |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| Loss before | | | | | | | (128,896) |
| tax | | | | | | | |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| Tax | | | | | | | 554 |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| Loss | | | | | | | (128,342) |
| attributable | | | | | | | |
| to equity | | | | | | | |
| shareholders | | | | | | | |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| Other | | | | | | | |
| information | | | | | | | |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| Additions | 2,450 | 743 | 1,435 | 1,607 | 1,684 | - | 7,919 |
| to | | | | | | | |
| property, | | | | | | | |
| plant and | | | | | | | |
| equipment | | | | | | | |
| and | | | | | | | |
| intangible | | | | | | | |
| assets | | | | | | | |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
| Depreciation | 3,144 | 1,037 | 2,063 | 2,948 | 1,314 | - | 10,506 |
| and | | | | | | | |
| amortisation | | | | | | | |
+---------------+-------------+------------+--------------+----------+---------------+--------------+-----------+
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| | Engineering | Management | Environment | Ireland | International | Eliminations | Group |
| | | Services | Planning | | | | |
| | | | Transport | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| | 2009 | 2009 | 2009 | 2009 | 2009 | 2009 | 2009 |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Balance | | | | | | | |
| sheet | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Assets | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Segment | 27,673 | 24,531 | 48,023 | 42,701 | 43,498 | - | 186,426 |
| assets | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Unallocated | | | | | | | 5,427 |
| corporate | | | | | | | |
| assets | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Group | | | | | | | 191,853 |
| total | | | | | | | |
| assets | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Liabilities | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Segment | (30,194) | (8,270) | (13,555) | (22,799) | (37,969) | - | (112,787) |
| liabilities | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Unallocated | | | | | | | (95,788) |
| corporate | | | | | | | |
| liabilities | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Group | | | | | | | (208,575) |
| total | | | | | | | |
| liabilities | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
The segment results for the year ended 30 June 2008 are as follows:
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| | | | Environment | | | | |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| | Engineering | ManagementServices | Planning | Ireland | International | Eliminations | Group |
| | | | Transport | | | | |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| | 2008 | 2008 | 2008 | 2008 | 2008 | 2008 | 2008 |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| Revenue | | | | | | | |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| Gross | 97,459 | 35,373 | 55,791 | 53,646 | 45,506 | (5,667) | 282,108 |
| revenue | | | | | | | |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| Inter-segment | (2,668) | (821) | (518) | (1,660) | - | 5,667 | - |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| External | 94,791 | 34,552 | 55,273 | 51,986 | 45,506 | - | 282,108 |
| net revenue | | | | | | | |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| Operating | 5,277 | 4,238 | 7,921 | 6,878 | 2,082 | - | 26,396 |
| profit | | | | | | | |
| excluding | | | | | | | |
| exceptional | | | | | | | |
| and other | | | | | | | |
| items | | | | | | | |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| Exceptional | (802) | (478) | (1,280) | (1,506) | (128) | - | (4,194) |
| and other | | | | | | | |
| items | | | | | | | |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| Operating | 4,475 | 3,760 | 6,641 | 5,372 | 1,954 | - | 22,202 |
| profit | | | | | | | |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| Finance | | | | | | | (5,354) |
| costs | | | | | | | |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| Profit | | | | | | | 16,848 |
| before tax | | | | | | | |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| Tax | | | | | | | (2,411) |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| Profit | | | | | | | 14,437 |
| attributable | | | | | | | |
| to equity | | | | | | | |
| shareholders | | | | | | | |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| Other | | | | | | | |
| information | | | | | | | |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| Additions | 5,382 | 1,553 | 3,425 | 847 | 658 | | 11,865 |
| to | | | | | | | |
| property, | | | | | | | |
| plant and | | | | | | | |
| equipment | | | | | | | |
| and | | | | | | | |
| intangible | | | | | | | |
| assets | | | | | | | |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
| Depreciation | 3,308 | 954 | 2,105 | 2,890 | 644 | - | 9,901 |
| and | | | | | | | |
| amortisation | | | | | | | |
+---------------+-------------+--------------------+--------------+---------+---------------+--------------+---------+
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| | | Management | Environment | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| | Engineering | Services | Planning | Ireland | International | Eliminations | Group |
| | | | Transport | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| | 2008 | 2008 | 2008 | 2008 | 2008 | 2008 | 2008 |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Balance | | | | | | | |
| sheet | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Assets | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Segment | 62,876 | 33,132 | 57,673 | 91,722 | 47,526 | | 292,929 |
| assets | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Unallocated | | | | | | | 4,204 |
| corporate | | | | | | | |
| assets | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Group | | | | | | | 297,133 |
| total | | | | | | | |
| assets | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Liabilities | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Segment | (31,111) | (7,596) | (11,205) | (14,714) | (25,952) | | (90,578) |
| liabilities | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Unallocated | | | | | | | (86,169) |
| corporate | | | | | | | |
| liabilities | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
| Group | | | | | | | (176,747) |
| total | | | | | | | |
| liabilities | | | | | | | |
+-------------+-------------+------------+-------------+----------+---------------+--------------+-----------+
5. FINANCE COSTS
+----------------------------------------------------------+------------+------------+
| | 2009 | 2008 |
+----------------------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------------+------------+------------+
| Interest on bank loans, guarantees and overdrafts | 4,731 | 4,593 |
+----------------------------------------------------------+------------+------------+
| Interest on obligations under finance leases | 138 | 356 |
+----------------------------------------------------------+------------+------------+
| Interest on loan notes | 3 | 46 |
+----------------------------------------------------------+------------+------------+
| Interest on defined benefit scheme liabilities | 370 | 359 |
+----------------------------------------------------------+------------+------------+
| | 5,242 | 5,354 |
+----------------------------------------------------------+------------+------------+
6. EXCEPTIONAL AND OTHER ITEMS
+----------------------------------------------------------+------------+------------+
| | 2009 | 2008 |
+----------------------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------------+------------+------------+
| Employee termination costs | 8,968 | - |
+----------------------------------------------------------+------------+------------+
| Office closure costs | 20,602 | - |
+----------------------------------------------------------+------------+------------+
| Work in progress and trade receivables provisions | 20,547 | - |
+----------------------------------------------------------+------------+------------+
| Professional indemnity claim provisions | 5,650 | - |
+----------------------------------------------------------+------------+------------+
| Professional fees | 3,440 | - |
+----------------------------------------------------------+------------+------------+
| Impairment of goodwill | 77,184 | - |
+----------------------------------------------------------+------------+------------+
| Other restructuring costs | 2,013 | - |
+----------------------------------------------------------+------------+------------+
| Finance costs | 374 | - |
+----------------------------------------------------------+------------+------------+
| Exceptional items | 138,778 | - |
+----------------------------------------------------------+------------+------------+
| Amortisation of acquired intangible assets | 2,230 | 4,194 |
+----------------------------------------------------------+------------+------------+
| Exceptional and other items | 141,008 | 4,194 |
+----------------------------------------------------------+------------+------------+
White Young Green plc has incurred significant exceptional costs in the
financial year. These exceptional costs arose predominantly from the
restructuring of the Group, and relate to redundancies and office closure costs,
the write down of work in progress and trade receivables balances, prospective
offer costs, fees arising on the refinancing, the impairment of goodwill and
other general restructuring costs.
The Board has implemented measures to reduce headcount in the financial year.
These headcount reductions have been across the entire Group, but concentrated
in the Engineering and Irish Business Units.
White Young Green plc has announced the closure of 17 regional offices in the UK
and Republic of Ireland. A provision of GBP17.2m has been made as an exceptional
cost in respect of vacant leasehold charges primarily made up of rent, rates and
service charges payable by the Group over the remaining lease terms on vacated
properties. The Group is actively seeking to sub-let these properties. In
addition, the Group has provided GBP0.7m in respect of on-going cost obligations
in closed locations and GBP2.7m for asset write offs.
When the half year results were announced on 25 February 2009, the Group
reported an exceptional charge of GBP8m in respect of a provision against work
in progress and trade receivables following a review of such balances. At the
year end a further review was undertaken as part of the overall review of the
Business Unit balance sheets and the Board now considers it necessary to provide
a further GBP12.5m in respect of such balances. This review covered all
receivable balances and was undertaken in the context of current market
conditions and the Group restructuring. Where appropriate, efforts will be made
to recover as much of these balances as possible.
The group's professional indemnity claim provision has been assessed on the
likely scale of settlement payable by the group. The amounts classified as
exceptional items include those costs that cover the insurance deductible
payable on all outstanding claims.
The Group has incurred significant professional costs in connection with the
refinancing. These costs are treated as exceptional.
The Group has reviewed the value of the goodwill arising upon past acquisitions
carried on its balance sheets. Following this review, the Group has reduced the
value of goodwill carried on the balance sheet in respect of all the Business
Units. This impairment charge is an accounting matter and does not represent a
cash cost.
Amortisation of acquired intangibles was classified as 'Other items' on the
Income Statement last year. This year it has been included in exceptional and
'other' items.
7. TAX
+-------------------------------------------------------+--------------+--------------+
| | 2009 | 2008 |
+-------------------------------------------------------+--------------+--------------+
| | GBP'000 | GBP'000 |
+-------------------------------------------------------+--------------+--------------+
| Current tax: | | |
+-------------------------------------------------------+--------------+--------------+
| UK corporation tax on profits for | (2,206) | 3,479 |
| the year at 28% (2008: 29.5%) | | |
+-------------------------------------------------------+--------------+--------------+
| Adjustments in respect of prior | - | (2,081) |
| years | | |
+-------------------------------------------------------+--------------+--------------+
| Overseas tax on profits for the year | 335 | 1,289 |
+-------------------------------------------------------+--------------+--------------+
| | (1,871) | 2,687 |
+-------------------------------------------------------+--------------+--------------+
| Deferred tax: | | |
+-------------------------------------------------------+--------------+--------------+
| Movement in deferred tax | 1,317 | (276) |
+-------------------------------------------------------+--------------+--------------+
| | (554) | 2,411 |
+-------------------------------------------------------+--------------+--------------+
| Tax on items charged to equity: | | |
+-------------------------------------------------------+--------------+--------------+
| Deferred tax (charge)/credit | (192) | (361) |
| related to share-based payments | | |
+-------------------------------------------------------+--------------+--------------+
| Deferred tax (charge)/credit | 406 | (164) |
| related to the actuarial gains and | | |
| losses | | |
| on retirement benefit schemes | | |
+-------------------------------------------------------+--------------+--------------+
| | 214 | (525) |
+-------------------------------------------------------+--------------+--------------+
Tax for other jurisdictions is calculated at the rates prevailing in the
respective jurisdictions.
Factors Affecting the Current Tax Charge for the Year
The tax charge for the year is lower (2008: lower) than the standard rate of
corporation tax in the UK when applied to reported profit. The differences are
explained below:
+-------------------------------------------------------+-------------+--------------+
| | 2009 | 2008 |
+-------------------------------------------------------+-------------+--------------+
| | GBP'000 | GBP'000 |
+-------------------------------------------------------+-------------+--------------+
| (Loss)/profit before tax | (128,896) | 16,848 |
+-------------------------------------------------------+-------------+--------------+
| (Loss)/profit before tax multiplied by the standard | (36,089) | 4,970 |
| rate of UK corporation tax rate of 28% (2008: 29.5%) | | |
+-------------------------------------------------------+-------------+--------------+
| Expenses not deductible for tax purposes | 4,563 | 290 |
+-------------------------------------------------------+-------------+--------------+
| Non-deductible acquired assets amortisation | 17,526 | 1,237 |
+-------------------------------------------------------+-------------+--------------+
| Adjustments in respect of prior years | - | (2,081) |
+-------------------------------------------------------+-------------+--------------+
| Enhanced expenditure | (428) | - |
+-------------------------------------------------------+-------------+--------------+
| Fixed asset timing differences | 781 | - |
+-------------------------------------------------------+-------------+--------------+
| Losses carried forward | 9,706 | - |
+-------------------------------------------------------+-------------+--------------+
| Other temporary differences | (306) | (1,014) |
+-------------------------------------------------------+-------------+--------------+
| Effect of different tax rates of subsidiaries | 2,376 | (715) |
| operating in other jurisdictions | | |
+-------------------------------------------------------+-------------+--------------+
| Total current tax (credit)/charge | (1,871) | 2,687 |
+-------------------------------------------------------+-------------+--------------+
| Current year deferred tax - on amortisation of | (505) | (1,163) |
| acquired intangibles | | |
+-------------------------------------------------------+-------------+--------------+
| Current year deferred tax - other | 1,822 | 887 |
+-------------------------------------------------------+-------------+--------------+
| Total tax (credit)/charge | (554) | 2,411 |
+-------------------------------------------------------+-------------+--------------+
8. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is based on the
following data:
+--------------------------------------------------------------+-----------+----------+
| | 2009 | 2008 |
+--------------------------------------------------------------+-----------+----------+
| | GBP'000 | GBP'000 |
+--------------------------------------------------------------+-----------+----------+
| Earnings for the purposes of basic and diluted earnings per | (128,342) | 14,437 |
| share being profit for the year | | |
+--------------------------------------------------------------+-----------+----------+
| Adjustment relating to exceptional items | 137,542 | 1,636 |
+--------------------------------------------------------------+-----------+----------+
| Earnings for the purposes of basic and diluted adjusted | 9,200 | 16,073 |
| earnings per share | | |
+--------------------------------------------------------------+-----------+----------+
+--------------------------------------------------------------+------------+------------+
| | 2009 | 2008 |
+--------------------------------------------------------------+------------+------------+
| | Number | Number |
+--------------------------------------------------------------+------------+------------+
| Number of shares | | |
+--------------------------------------------------------------+------------+------------+
| Weighted average number of shares for basic earnings per | 52,169,867 | 50,902,193 |
| share | | |
+--------------------------------------------------------------+------------+------------+
| Effect of dilutive potential ordinary shares: | | |
+--------------------------------------------------------------+------------+------------+
| Share options | (92,318) | 112,460 |
+--------------------------------------------------------------+------------+------------+
| Shares to be issued in respect of | - | 1,892,929 |
| acquisitions | | |
+--------------------------------------------------------------+------------+------------+
| Weighted average number of shares for diluted earnings per | 52,077,549 | 52,907,582 |
| share | | |
+--------------------------------------------------------------+------------+------------+
| | | |
+--------------------------------------------------------------+------------+------------+
| Earnings per share | | |
+--------------------------------------------------------------+------------+------------+
| Basic | (246.0p) | 28.4p |
+--------------------------------------------------------------+------------+------------+
| Diluted | (246.4p) | 27.3p |
+--------------------------------------------------------------+------------+------------+
| | | |
+--------------------------------------------------------------+------------+------------+
| Adjusted earnings per share | | |
+--------------------------------------------------------------+------------+------------+
| Basic | 17.6p | 31.6p |
+--------------------------------------------------------------+------------+------------+
| Diluted | 17.7p | 30.4p |
+--------------------------------------------------------------+------------+------------+
9. DIVIDENDS
+-------------------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+-------------------------------------------------------------+----------+----------+
| | GBP'000 | GBP'000 |
+-------------------------------------------------------------+----------+----------+
| Amounts recognised as distributions to equity holders in | | |
| the year: | | |
+-------------------------------------------------------------+----------+----------+
| Final dividend for the year ended 30 June 2008 of 6.3p | 3,251 | 2,713 |
| (2007: 5.4p) per share | | |
+-------------------------------------------------------------+----------+----------+
| Interim dividend for the year ended 30 June 2009 of nil | - | 1,651 |
| (2008: 3.2p) per share | | |
+-------------------------------------------------------------+----------+----------+
| | 3,251 | 4,364 |
+-------------------------------------------------------------+----------+----------+
| Proposed final dividend for the year ended 30 June 2009 of | - | 3,251 |
| nil (2008: 6.3p) per share | | |
+-------------------------------------------------------------+----------+----------+
10. GOODWILL
+--------------------------------------------------------------------------+----------+
| | GBP'000 |
+--------------------------------------------------------------------------+----------+
| Cost | |
+--------------------------------------------------------------------------+----------+
| At 1 July 2007 | 81,122 |
+--------------------------------------------------------------------------+----------+
| Exchange differences | 4,991 |
+--------------------------------------------------------------------------+----------+
| Recognised on acquisition of businesses - current year | 29,409 |
+--------------------------------------------------------------------------+----------+
| Recognised on acquisition of businesses - prior year | 103 |
+--------------------------------------------------------------------------+----------+
| At 1 July 2008 | 115,625 |
+--------------------------------------------------------------------------+----------+
| Exchange differences | 3,220 |
+--------------------------------------------------------------------------+----------+
| Recognised on acquisition of businesses - prior year | 1,811 |
+--------------------------------------------------------------------------+----------+
| At 30 June 2009 | 120,656 |
+--------------------------------------------------------------------------+----------+
| | |
+--------------------------------------------------------------------------+----------+
| Accumulated impairment losses | |
+--------------------------------------------------------------------------+----------+
| At 1 July 2007, 1 July 2008 | - |
+--------------------------------------------------------------------------+----------+
| Impairment charge | (77,184) |
+--------------------------------------------------------------------------+----------+
| Accumulated impairment losses at 30 June 2009 | (77,184) |
+--------------------------------------------------------------------------+----------+
| | |
+--------------------------------------------------------------------------+----------+
| Net book value | |
+--------------------------------------------------------------------------+----------+
| At 30 June 2009 | 43,472 |
+--------------------------------------------------------------------------+----------+
| At 30 June 2008 | 115,625 |
+--------------------------------------------------------------------------+----------+
Goodwill is tested for impairment annually and whenever there are indications
that it may have suffered an impairment. Goodwill is considered impaired to the
extent that its carrying amount exceeds its recoverable amount, which is the
higher of the value in use and the fair value less costs to sell of the cash
generating unit (CGU) to which it is allocated. In the impairment tests of
goodwill performed in 2009, the recoverable amount was determined based on the
value in use calculations.
Management based the value in use calculations on cash flow forecasts derived
from the most recent three year financial plans approved by the Board, including
certain sensitivities in which the principal assumptions were those regarding
sales growth and changes in direct costs.
Cash flows for the years beyond the three year financial plans for the CGUs to
which significant amounts of goodwill were allocated were calculated as follows:
cashflows in the fourth and fifth years and those thereafter were projected to
grow at 2% per annum which does not exceed the long term growth rates in the
principal end markets in the UK, Republic of Ireland and Europe.
Management applied discount rates to the resulting cashflow projections that
reflect current market assessments of the time. Pre tax discount rates used in
the annual impairment were 14%
During the financial period, impairments totalling GBP77,184,000 were recognised
in relation to the goodwill allocated across all CGUs.
In all CGUs there has been a deterioration in the markets which caused the
impairment of GBP14,421,000 in International, GBP17,423,000 in Engineering,
GBP2,592,000 in EPT, GBP2,394,000 in Management Services and GBP40,354,000 in
Ireland.
Management has assessed the sensitivity of the recoverable amounts to key
assumptions to be as follows: a one percentage point increase in the pre-tax
discount rate of 14% would reduce the recoverable amount by GBP6.2m; a one
percentage point fall in operating margin across all BUs would reduce the
recoverable amount by GBP17.1m; and a one percentage point fall in the assumed
long term growth rate of 2% would reduce the recoverable amount by GBP4.5m.
11. WORK-IN-PROGRESS
+-------------------------------------------------------------+-------------------------+------------------------+
| | |
+-------------------------------------------------------------+--------------------------------------------------+
| | 2009 | 2008 |
+-------------------------------------------------------------+-------------------------+------------------------+
| | GBP000 | GBP000 |
+-------------------------------------------------------------+-------------------------+------------------------+
| Work-in-progress | 55,255 | 48,751 |
+-------------------------------------------------------------+-------------------------+------------------------+
| Provision | (14,066) | (710) |
+-------------------------------------------------------------+-------------------------+------------------------+
| Net work-in-progress | 41,189 | 48,041 |
+-------------------------------------------------------------+-------------------------+------------------------+
The value of work in progress comprises the costs incurred on a contract plus an
appropriate proportion of overheads and attributable profit. Profit is
recognised on a percentage completion basis when the outcome of a contract or
project can be reasonably foreseen. Provision is made in full for estimated
losses.
12. TRADE AND OTHER RECEIVABLES
+----------------------------------------------+-------------------+------------------+
| | |
+----------------------------------------------+--------------------------------------+
| | 2009 | 2008 |
+----------------------------------------------+-------------------+------------------+
| | GBP'000 | GBP'000 |
+----------------------------------------------+-------------------+------------------+
| Amounts falling due within one year | | |
+----------------------------------------------+-------------------+------------------+
| Amounts receivable on contracts | 66,627 | 76,897 |
+----------------------------------------------+-------------------+------------------+
| Less: provision for impairment of trade | (9,178) | (3,486) |
| receivables | | |
+----------------------------------------------+-------------------+------------------+
| Trade receivables - net | 57,449 | 73,411 |
+----------------------------------------------+-------------------+------------------+
| Prepayments and accrued income | 3,896 | 4,621 |
+----------------------------------------------+-------------------+------------------+
| Amounts owed by subsidiary undertakings | - | - |
+----------------------------------------------+-------------------+------------------+
| Other receivables | 2,731 | 3,589 |
+----------------------------------------------+-------------------+------------------+
| | 64,076 | 81,621 |
+----------------------------------------------+-------------------+------------------+
13. PROVISIONS, LIABILITIES AND OTHER CHARGES
+-----------------------------------------+----------+------------+-----------+----------+
| | |
+-----------------------------------------+----------------------------------------------+
| | Claims | Redundancy | Vacant | Total |
| | | | Leasehold | |
+-----------------------------------------+----------+------------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------------+----------+------------+-----------+----------+
| At June 2007 | 2,785 | - | - | 2,785 |
+-----------------------------------------+----------+------------+-----------+----------+
| Additional provisions | 1,896 | - | - | 1,896 |
+-----------------------------------------+----------+------------+-----------+----------+
| Utilised during the year | (1,001) | - | - | (1,001) |
+-----------------------------------------+----------+------------+-----------+----------+
| At June 2008 | 3,680 | - | - | 3,680 |
+-----------------------------------------+----------+------------+-----------+----------+
| Additional provisions | 8,626 | 8,968 | 17,210 | 34,804 |
+-----------------------------------------+----------+------------+-----------+----------+
| Utilised during the year | (2,731) | (5,697) | - | (8,428) |
+-----------------------------------------+----------+------------+-----------+----------+
| At June 2009 | 9,575 | 3,271 | 17,210 | 30,056 |
+-----------------------------------------+----------+------------+-----------+----------+
Professional indemnity claims
Provisions are made for current and estimated obligations in respect of claims
made by contractors and the general public relating to accident or other
insurable risks as a result of the business activities of the Group. These
include claims held by the Group's captive insurance company, Oakdale Insurance
Company Limited. In the prior year accounts the provision for professional
indemnity claims was presented within accruals as the liability was not
considered significant for separate disclosure.
Redundancy
Provision is made for current estimated future costs of redundancy and ex gratia
payments to be made where this has been communicated to those employees
concerned.
Vacant properties
The group has a number of vacant leasehold properties, with the majority of the
head leases expiring within the next five years. Provision has been made for the
residual lease commitments together with other outgoings, after taking into
account potential sub-tenant arrangements and assumptions relating to later
periods of vacancy.
14. FINANCIAL LIABILITIES
+-------------------------------------------------+------------------+-----------------+
| | |
+-------------------------------------------------+------------------------------------+
| | 2009 | 2008 |
+-------------------------------------------------+------------------+-----------------+
| | GBP'000 | GBP'000 |
+-------------------------------------------------+------------------+-----------------+
| Current | | |
+-------------------------------------------------+------------------+-----------------+
| Bank overdrafts | 6,447 | 385 |
+-------------------------------------------------+------------------+-----------------+
| Obligations under finance leases | 851 | 1,131 |
+-------------------------------------------------+------------------+-----------------+
| Loan notes | - | 240 |
+-------------------------------------------------+------------------+-----------------+
| | 7,298 | 1,756 |
+-------------------------------------------------+------------------+-----------------+
| Non-current | | |
+-------------------------------------------------+------------------+-----------------+
| Bank loans | 88,485 | 82,592 |
+-------------------------------------------------+------------------+-----------------+
| Obligations under finance leases | 461 | 1,282 |
+-------------------------------------------------+------------------+-----------------+
| | 88,946 | 83,874 |
+-------------------------------------------------+------------------+-----------------+
| | | |
+-------------------------------------------------+------------------+-----------------+
| Financial liabilities are repayable as follows: | | |
+-------------------------------------------------+------------------+-----------------+
| On demand or within one year | 7,298 | 1,756 |
+-------------------------------------------------+------------------+-----------------+
| In the second year | 431 | 807 |
+-------------------------------------------------+------------------+-----------------+
| In the third to fifth years inclusive | 88,515 | 83,067 |
+-------------------------------------------------+------------------+-----------------+
| | 96,244 | 85,630 |
+-------------------------------------------------+------------------+-----------------+
15. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
+----------------------------------------------------------+------------+------------+
| | |
+----------------------------------------------------------+-------------------------+
| | 2009 | 2008 |
+----------------------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------------+------------+------------+
| (Loss)/profit attributable to equity shareholders | (128,342) | 14,437 |
+----------------------------------------------------------+------------+------------+
| Net exchange adjustments offset in reserves net of tax | (2,138) | 6,102 |
+----------------------------------------------------------+------------+------------+
| Actuarial (losses)/gains on defined benefit pension | (1,449) | 584 |
| schemes | | |
+----------------------------------------------------------+------------+------------+
| (Loss)/gains on cash flow hedges | (493) | 201 |
+----------------------------------------------------------+------------+------------+
| Share-based payments | (2,424) | (242) |
+----------------------------------------------------------+------------+------------+
| New share capital issued, net of expenses | 775 | 15,264 |
+----------------------------------------------------------+------------+------------+
| Tax on items taken directly to equity | 214 | (525) |
+----------------------------------------------------------+------------+------------+
| Equity dividends paid | (3,251) | (4,364) |
+----------------------------------------------------------+------------+------------+
| Net (reduction from)/addition to shareholders' equity | (137,108) | 31,457 |
+----------------------------------------------------------+------------+------------+
| Equity attributable to equity shareholders at beginning | 120,386 | 88,929 |
| of year | | |
+----------------------------------------------------------+------------+------------+
| (Deficit)/equity attributable to equity shareholders at | (16,722) | 120,386 |
| end of year | | |
+----------------------------------------------------------+------------+------------+
16. CASH GENERATED FROM OPERATIONS
+--------------------------------------------+-----------+---------+
| | |
+--------------------------------------------+---------------------+
| | 2009 | 2008 |
+--------------------------------------------+-----------+---------+
| | GBP'000 | GBP'000 |
+--------------------------------------------+-----------+---------+
| (Loss)/profit from operations | (123,654) | 22,202 |
+--------------------------------------------+-----------+---------+
| Adjustments for: | | |
+--------------------------------------------+-----------+---------+
| Depreciation of | 6,977 | 4,652 |
| property, plant and | | |
| equipment | | |
+--------------------------------------------+-----------+---------+
| Amortisation of | 3,529 | 5,249 |
| intangible assets | | |
+--------------------------------------------+-----------+---------+
| Impairment of | 77,184 | - |
| goodwill/investments | | |
+--------------------------------------------+-----------+---------+
| (Profit)/loss on | 201 | (858) |
| disposal of property, | | |
| plant and equipment | | |
+--------------------------------------------+-----------+---------+
| Share options | (1,648) | 1,214 |
| (credit)/charge | | |
+--------------------------------------------+-----------+---------+
| Operating cash flows before movements in | (37,411) | 32,459 |
| working capital | | |
+--------------------------------------------+-----------+---------+
| Decrease/(increase) in | 8,818 | (4,666) |
| inventories | | |
+--------------------------------------------+-----------+---------+
| Decrease/(increase) in | 22,267 | (5,648) |
| receivables | | |
+--------------------------------------------+-----------+---------+
| Increase in payables | 18,780 | 8,853 |
+--------------------------------------------+-----------+---------+
| Cash generated from/(used in) operations | 12,454 | 30,998 |
+--------------------------------------------+-----------+---------+
| Interest paid | (5,322) | (5,304) |
+--------------------------------------------+-----------+---------+
| Tax paid | (435) | (4,833) |
+--------------------------------------------+-----------+---------+
| Net cash generated from/(used in) | 6,697 | 20,861 |
| operating activities | | |
+--------------------------------------------+-----------+---------+
17. ANALYSIS OF CHANGES IN NET DEBT
+--------------------------------+----------+----------+--------------+----------+----------+
| | At | | | Other | At |
+--------------------------------+----------+----------+--------------+----------+----------+
| | 1 July | Cash | | non-cash | 30 June |
+--------------------------------+----------+----------+--------------+----------+----------+
| | 2008 | flows | Acquisitions | items | 2009 |
+--------------------------------+----------+----------+--------------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+----------+----------+--------------+----------+----------+
| Cash and cash equivalents | 17,427 | (6,531) | - | - | 10,896 |
+--------------------------------+----------+----------+--------------+----------+----------+
| Bank overdrafts | (385) | (6,062) | - | - | (6,447) |
+--------------------------------+----------+----------+--------------+----------+----------+
| Bank loans due after one year | (82,592) | (504) | - | (5,389) | (88,485) |
+--------------------------------+----------+----------+--------------+----------+----------+
| Loan notes due within one year | (240) | 240 | - | - | - |
+--------------------------------+----------+----------+--------------+----------+----------+
| Finance leases and hire | (2,413) | 1,627 | - | (526) | (1,312) |
| purchase contracts | | | | | |
+--------------------------------+----------+----------+--------------+----------+----------+
| | (68,203) | (11,230) | - | (5,915) | (85,348) |
+--------------------------------+----------+----------+--------------+----------+----------+
| Add back cash in restricted | (3,412) | 52 | - | - | (3,360) |
| access accounts | | | | | |
+--------------------------------+----------+----------+--------------+----------+----------+
| | (71,615) | (11,178) | - | (5,915) | (88,708) |
+--------------------------------+----------+----------+--------------+----------+----------+
The net debt has been restated to show the Oakdale and restricted WYG
International balances.
Other non-cash movements represent currency exchange differences and finance
lease creditor movements.
18. RELATED PARTY TRANSACTIONS
There have been no changes in the nature of related party transactions as
described in the 2008 Annual Report and Accounts and there have been no new
related party transactions disclosed in the 2009 Annual Report and Accounts
which have had a material effect on the financial position or performance of the
group in the year ended 30 June 2009.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
In accordance with Rule 4.1.12 of the Disclosure and Transparency Rules, the
following responsibility statement is given by each of the directors: namely
Mike McTighe, Non Executive Chairman; Paul Hamer, Chief Executive Officer; David
Wilton, Group Finance Director; Graham Olver, Group Services Director and
Company Secretary; Robert Barr, Non Executive Director and John Richardson, Non
Executive Director. The directors are responsible for preparing the Annual
Report, the Directors' Remuneration Report and the accounts in accordance with
applicable law and regulations.
Company law requires the directors to prepare accounts for each financial year.
Under that law the directors have prepared the Group and Parent Company accounts
in accordance with International Financial Reporting Standards ("IFRS") as
adopted by the European Union. Under Company law the directors must not approve
the accounts unless they are satisfied that they give a true and fair view of
the state of affairs of the Company and the Group and of the profit or loss of
the Group for that period.
In preparing those accounts, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable IFRSs as adopted by the European Union have
been followed, subject to any material departures disclosed and explained in the
accounts; and
- prepare the accounts on the going concern basis, unless it is
inappropriate to presume that the Group will continue in business.
Each of the directors, whose names and functions are listed above, confirm that
to the best of their knowledge, the Group financial statements, prepared in
accordance with IFRS as adopted by the European Union, give a true and fair view
of the assets, liabilities, financial position and profit of the Group; and the
Directors' Report includes a fair review of the development and performance of
the business and the position of the Group, together with a description of the
principal risks and uncertainties that it faces.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and the
Group and to enable them to ensure that the accounts and the Directors'
Remuneration Report comply with the Companies Act 2006 and, as regards the Group
accounts, Article 4 of the IAS Regulation. They are also responsible for
safeguarding the assets of the Company and the Group and hence for taking
reasonable steps for the prevention and detection of fraud and other
irregularities.
The Annual Report and Accounts will be published on the Group's website. The
maintenance and integrity of the Group's website is the responsibility of the
directors. The work carried out by the auditors does not include consideration
of these matters. Legislation in the UK governing the preparation and
dissemination of accounts may differ from legislation in other jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR DXBDGUBDGGCC
White Young (LSE:WHY)
Gráfica de Acción Histórica
De Oct 2024 a Nov 2024
White Young (LSE:WHY)
Gráfica de Acción Histórica
De Nov 2023 a Nov 2024
