WYG shares dive after warning of 'substantially lower' profits
Shares in technical consultancy firm WYG Group went into freefall on Friday after it warned operating profit were now likely to come in "substantially lower" than market expectations, which had been inflated by a bullish summer update.
FTSE AIM All-Share
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WYG
54.50p
15:59 09/07/19
WYG said that operating profit for the full year would be in the range of £3.5-4m, a marked decline on the £7.2m posted in the previous trading year.
The AIM-listed firm moved to reassure investors in August that it was on track for a "significant recovery" in the second half of the year, thanks to a £144m order book, but a slower-than-expected start to several big contracts earlier in 2017 created a significant amount of catch-up work for the firm.
WYG also noted that net debt was likely to rise somewhere in the vicinity of £6-7m, up from the £2.5m debt position the group was in as of 31 March.
Douglas McCormick, chief executive officer of WYG, said, "Although it is very disappointing to be making a further announcement revising expectations of WYG's near-term performance, the board is confident that the underlying business is robust and that, supported by a strong order book, we are taking the correct steps to return to a growth trajectory in the medium term."
WYG's international development business was said to be performing "broadly in line" with its previously revised expectations, but pointed out that its consultancy services wing had continued to experience "lower trading volumes than anticipated" as a result of the loss or delay of the aforementioned projects.
As of 0840 GMT, shares had dived 32.84% to 45.00p.