Shares of Leeds-based WYG, the AIM-listed project management consultancy, fell more than 20% after it said in a trading update that “a combination of programme deferrals on existing contracts and some delays in the confirmation of new contracts has led to weaker than anticipated profit performance.”
Ahead of the group’s financial year end on March 31, WYG said it expects revenue for the year to exceed £150 million, representing year-on-year growth of 13%, in line with market expectations, but it has revised its expectation of operating profit to “a figure approaching” £9 million.
“Although revenue during the fourth quarter, traditionally the group’s strongest trading period, is expected to be higher than in the same period last year, a combination of programme deferrals on existing contracts and some delays in the confirmation of new contracts has led to weaker than anticipated profit performance,” said WYG.
“Frustratingly, the group’s higher margin service lines have seen a greater incidence of project delays.
“This, together with the investment we have made in building our UK capacity in anticipation of even higher activity levels that have not materialised, is expected to result in UK profitability for the year being lower than in 2016.”
WYG shares fell more than 20% to around 100p, giving it a stock market value of roughly £70 million.
WYG chief executive Paul Hamer said: “Whilst our profit performance in the UK will not be as strong as we expected, growth across the group and particularly the performance of our international operations provides tangible evidence that the group’s strategy to build a more broadly based, resilient and balanced business is starting to bear fruit.”